The UK’s Asbestos Working Party (AWP) has published its revised projection of the cost to employers’ liability insurers of the UK’s asbestos liability problem. The AWP has modelled “alternative scenarios” that suggest the cost of future claims will be between about £5 billion and over £20 billion for the period 2009 to 2050. Within that range, the most likely cost is stated to be £11.3 billion. The AWP’s previous estimate was £4.7 billion, given in 2004.
The report, stressing the uncertainty inherent in the projections, states that there is insufficient evidence on which to base a single best estimate of the future cost and sets out “a range of best estimates”.
The vast majority of the cost (over 90%) is attributable to future claims from victims of mesothelioma. The AWP has relied upon revised modelling indicating an increase in the likely UK death rate for mesothelioma; that rate is among the worst in the world. However, the main factor in the significant increase in the projected cost is a material change in the proportion of mesothelioma deaths that result in a claim being passed to insurers. Since 2003, that rate has nearly doubled – now 61% of deaths produce a claim on insurance.
The projection does not include any amount in respect of pleural plaques. This condition is not actionable in England and Wales; Scotland has enacted legislation to reinstate the right to compensation.
