Asbestos ruling goes in favour of payouts

Judge rules £7,000 maximum compensation to those making full settlement - Insurers consider appeal

Thousands of workers who have been exposed to asbestos were given new hope of compensation yesterday, as a high court judge ruled that insurers would have to pay out to those who have developed "pleural plaques" on their lungs if they had suffered from anxiety as a result.

Thousands of workers who have been exposed to asbestos were given new hope of compensation yesterday, as a high court judge ruled that insurers would have to pay out to those who have developed "pleural plaques" on their lungs if they had suffered from anxiety as a result.

The landmark ruling is a blow to the insurance industry, which was hoping to avoid having to pay any claims for pleural plaques. Asbestos-related claims are expected to cost the UK insurance industry up to £10bn over the next 40 years - of which pleural plaques will account for up to £1bn.

Medical evidence has shown that the development of pleural plaques - a small hardening on the side of the lung - does not have any detrimental effect on people's health, unlike most other asbestos-related conditions, some of which can be fatal.

However, delivering his judgment in Newcastle's high court yesterday, Mr Justice Holland said compensation payments should still be made in many of these cases, due to the psychological damage caused by the fear of contracting a worse asbestos-related illness.

But the insurers won a partial victory in the guidelines for compensation, with Mr Holland recommending that a maximum of £7,000 be paid to those who were willing to take full and final settlement. Previously, insurers had been expected to pay up to £20,000.

For those who accept a partial settlement, allowing them to return for more money if they contract one of the more serious diseases - such as Asbestosis, Mesothelioma or lung cancer - the judge recommended a maximum payment of £4,000 be made.

The low compensation limits mean the cost of pleural plaque claims to the UK insurance industry is likely to fall at the lower end of the £200m to £1.4bn range. This is likely to be spread over the next 10 years.

Norwich Union, which with Zurich was one of two insurers defending in the test case, said it was considering whether to appeal. It had already applied for "leave to appeal", to keep its options open. The initial ruling will not set a precedent until it has been tested through the appeal courts.

Dominic Clayton, the asbestos claims manager for NU, said: "Our position has always been that this is an issue that needed testing. In terms of final settlements, there's been a significant reduction in compensation payments, and so we feel totally vindicated in taking this case."

Amicus, which represented the 11 workers involved in the case, said it was delighted with the ruling, which will ensure thousands of workers are eligible for compensation. Derek Simpson, the Amicus general secretary, said: "This judgment is good law and good news for thousands of workers. Amicus and its lawyers will continue to ensure that workers suffering from asbestos-related injuries due to the failure of employers to protect them have the right to compensation.

"Amicus is receiving hundreds of calls a week in response to the union stepping up its campaign to compensate asbestos claims and fight the claims-handling agency. The union has created a database detailing cases of asbestos exposure. The database will be used to ensure union members suffering from asbestos-related diseases have a better chance of winning their legal case than other claimants do."

Both sides remain united in their fight against claims-handling agencies, known as claims farmers, which set up outside factories and give workers a free lung X-ray in a "scan van". If evidence of pleural plaques is found, they help fight their case, and keep a large proportion of the compensation secured.

Compensation at last for this former boiler engineer

Kenneth Johnston, a 58-year-old former boiler engineer, was regularly exposed to asbestos during his everyday work for almost 10 years in the 1970s and 1980s. But it was not until five years ago that he visited his GP complaining of shortness of breath and was found to have a thickening on the lining of his lungs.

Although the chances of him developing one of the more serious asbestos-related illnesses were remote, doctors said he had a one-in-50 chance of him contracting mesothelioma, and a one-in-20 chance of getting lung cancer.

Mr Johnston received £4,000 in compensation yesterday and kept the option to make a further claim if he contracts a more serious illness. Victims of mesothelioma are paid compensation of about £100,000; those with lung cancer caused by asbestos exposure get a similar amount.

Although the compensation for so-called "pleural plaques" is small in relation to the stress and worry they cause, unions and action groups representing claimants breathed a sigh of relief at yesterday's verdict. Many thousands more now stand to compensated as a result of the successful defence by Mr Johnston and the 10 other claimants.