Chester Street Insurance, formerly Iron Trades Holdings, a leading insurer in the shipbuilding and manufacturing sector, folded in January under a deluge of asbestos-related claims.
Ian McFall of solicitor Thompsons – one of the firms acting on behalf of claimants who came forward in a campaign by general union the GMB – warned: 'I fear that if the insurance industry has not been carefully regulated, there could be a recurrence of this situation.
'The majority of cases where people have been exposed in schools, hospitals and municipal buildings are cases for the future. The problem is that there may not be the resources necessary to fund the claims in these cases.'
Chester Street's collapse will lead to delayed payouts for thousands of people who have developed asbestos-related diseases after working in shipbuilding and heavy industry.
'Fortunately, it did not handle many of the local authority cases,' said McFall. 'The local authorities tended to self-insure.'
Provisional liquidator Pricewaterhouse-Coopers has stepped in to try and stop Chester Street from going bust. It is pushing for the insurer to pay part of the compensation bill, while insurance sector emergency fund the Policyholders Protection Board pays the rest.
But McFall says this does not go far enough as the PPB will only pay out in cases since 1972. He claims most cases occurred before this time – in many cases the employer no longer exists.
McFall believes the estimated £200 million value of Chester Street is not enough to meet the liability of future claims made against it.
'It needs £60 million to meet its existing claims and the remaining £140 million is inadequate to meet the volume of claims that will be brought over the next 20 years.'
McFall said Thompsons was 'more determined than ever' to pursue claims unearthed in the GMB's recent campaign, in which members of the public could come forward and have their work and health history mapped free of charge.
Source
The Facilities Business
