A Briefing document for Trade Unions - March 2003
Background
In May 2002 Thompsons were approached by the South African law firm Ntuli Noble Spoor to work with them and the mining unions in obtaining compensation for the victims of asbestos dust exposure from the South African asbestos mining industry and the activities of Gencor in particular.
Gencor, now a shell company, was involved in the South Africa mining industry between the mid 1960s and 1980s when it owned, managed and controlled Gefco and Msauli.
None of these companies so far as we are aware carried liability insurance for the consequences of asbestos exposure and claims for damages on behalf of injured persons against their employers are rare.
Victims of exposure include not only those who have worked in the mines but those who have lived in an environment polluted by the mines.
The campaign
Thompsons agreed to be responsible for the funding of the project and to bring our considerable experience in dealing with such claims for damages within the UK jurisdiction.
An office was set up in the Kuruman in the Northern Province which is in the middle of Gefco’s former mining activities. Over 4,000 claims were registered on behalf of former workers as well as those who have lived in the vicinity of the mines and became ill from the pollution of the environment. Many claims were registered on behalf of those who have died already as a result of asbestos exposure.
We also established an office in Johannesburg in order to litigate the claims through the South African court system.
We made it our priority to establish close liaison with both the National Union of Mineworkers and the National Union of Metalworkers in South Africa, as they were the principle unions involved.
The unbundling application
In taking the action against Gencor we had to move fast. The company planned to “unbundle” its remaining assets by transferring them to its shareholders, and announced that it would do so shortly after we began registering claims. Were unbundling to take place there would be no money left to compensate any victims. The claims were in danger of becoming worthless overnight.
We applied to the High Court in Johannesburg to seek to prevent the unbundling on the basis that Gencor would be unable to meet its liabilities. But Gencor used every conceivable argument in court, including that evidence of the damaging effects of asbestos exposure were grossly overstated and that that there were many other factors which caused distress in the former mining industries which could not be attributed to exposure to asbestos dust causing illness.
Negotiations and settlement
At the conclusion of the hearing it was clear that Gencor’s victims would be unlikely to persuade the court that they had claims of sufficient value to prevent the unbundling in its entirety.
However, Gencor was prepared to consider settlement and we entered into negotiations, the result of which has been the creation of a settlement of approximately £35 million.
The Asbestos Relief Trust
The Trust will provide a framework for the compensation of asbestos victims over the course of the next 20 to 30 years. It will be administered by five trustees who will be independent of the lawyers and the companies involved. Because two of the trustees are appointed by the victims’ lawyers we have decided that one of those them should be in the gift of the National Union of Mineworkers of South Africa.
The Trust provides compensation for the following groups of victims:
- Those who suffer asbestos related disease as a consequence of exposure whilst employed in Gefco or Msauli mines.
- Those who suffer from asbestos related disease who have been exposed to asbestos as a consequence of their residence at or in the vicinity of those mines.
- The families or personal representatives of people who have died as a result of the above two classes of exposure.
- Compensation will be paid to victims who suffer asbestos related diseases which actually cause illness. The Trust will not pay compensation to victims of asymptomatic pleural plaques, though should people become ill in the future they will be entitled to pursue an application at that stage.
- The amount of compensation which will be paid will be determined by the Trust in the light of its assessment of the potential number of claims and the amount of money available to it. Thompsons legal fees of just 2.75% of the total trust fund have already been deducted so there will be no further deductions from victims’ compensation.
- The Trust can pay the costs of claimants’ legal advisers in pursuing claims if it considers it appropriate. It can seek to regulate the circumstances in which payment is made to ensure that lawyers do not end up ripping claimants off.
- 10% of the Trust’s income from investments can be used in community based projects for the relief of hardship caused by exposure to asbestos dust.
- Gencor have insisted on retaining R40m of the total settlement to use to pay any environmental rehabilitation claims brought against it, including from Government in the next 3 years.
- Any money remaining in the Trust when it is wound up will be given to charities working for the relief of hardship in communities affected by asbestos.
The future
This settlement and the establishment of the Asbestos Relief Trust is a landmark in the interests of working people in South Africa. That said the amount of money retained is a drop in the ocean compared to the profits that have been made by mining companies and others on the backs of largely black South African workers who have had to endure appalling working conditions and appalling illnesses.
Thankfully, asbestos is no longer mined in South Africa. However, the prevalence of disease in other mining industries including coal and most importantly gold mining is of great concern. The incidents of pneumoconiosis and silicosis in these mining sectors is a scandal of even greater proportions than the asbestos legacy.
Thompsons is in discussion with the South African trades unions about future projects which may be built upon the experience obtained from the Gencor litigation.