A paper company received a writ alleging asbestos exposure at a paper mill which they owned near Blackburn. The claim was for a fatal Mesothelioma and was valued at £ 400,000. The client had evidence to confirm that the claimant worked at the mill, and there appeared good evidence of exposure. The client’s solicitors had advised them to settle on the best possible terms.
We advised the client not to make any offer or to admit liability. Though they owned the building, this would not directly make them responsible for the claim, liability for which would most probably rest with the original employers (who may have a natural successor).
InSolutions suggested that to be on the safe side they trace their historic Employers’ Liability (EL) coverage. Instead the client, through their solicitors, entered pleadings to accept liability.
At the same time, we completed the full corporate history and established that the client never owned the company which ran the mill during the period of the claimant’s employment, and that when the mill closed it was actually owned by one of the client’s major competitors.
At this point the client’s corporate lawyers become involved, and on our advice, appointed a claims management company. The client also dispensed with the services of their existing lawyers, and the new lawyers appointed to act on their behalf instructed a barrister to attempt a change of plea.
It subsequently transpired that regardless of ownership of the company, when purchasing the mill the client had obtained a full indemnity (against all past liabilities) from the vendors. The courts refused the change of plea on the “balance of prejudice” argument and the clients were left to fund a claim valued at £ 400,000 plus legal fees.
With literally a day to go before the claim went to trial, InSolutions traced the mill’s EL coverage to Lloyd’s, who at the door of the court agreed to take over control of the claim and provide full settlement. However, because they did not understand their liabilities the clients still faced an unnecessary bill for £ 20,000 legal costs, and, had the EL cover not been traced, would have had to fund the claim in excess of £ 400,000 (even though they had no legal liability).
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