Asbestos compensation case that could stop the scan van

The insurance industry is challenging a legal action that it fears will have far-reaching consequences. Jon Robins reports

The appearance of the scan van on our streets could become the latest symbol of the compensation culture. Like most controversial litigation innovations it comes from America, where lawyers have long been paying for mobile x-ray clinics to tour shopping and community centres in search of workers to screen and recruit to asbestos-related lawsuits. The British Government and insurance industry are backing a test case that started yesterday in the High Court in Manchester and which could close down claims by people with pleural plaques, a calcification of the lungs that can be caused by asbestos. If the action is successful, it could mean the decommissioning of the scan van almost as soon as it has left the gagage. In America, worried-well claimants are said to account for three quarters of all asbestos compensation claims.

Dominic Clayden is director of technical claims at Norwich Union, which with Zurich and the Department of Trade and Industry is challenging the cases of ten people with pleural plaques. Pleural plaques can be an indicator of exposure to asbestos, he says. However, they aren't a disease and they don't cause symptoms. He adds that they do not develop into any other condition such as lung cancer or mesothelioma, the invariably terminal cancer of the lining of the lungs caused by asbestos. Plaques indicate that an individual has possibly been exposed to asbestos, Clayden says, but also sand quartz minerals or even talcum powder. The important distinction to make is that it is the exposure to asbestos that may lead to another condition, not the plaques themselves.

Claimant lawyers regard this latest challenge as yet another cynical attempt by the insurance industry to strike out a legitimate class of legal action. Anthony Coombs, the partner at the Manchester firm John Pickering & Partners, whose clients' cases are being challenged, says: The big issue here is that if someone is diagnosed with plaques time starts running against them for limitation purposes. You then have three years to bring an action for any type of asbestos-related disease.

The clock starts ticking.

Patients who have plaques diagnosed usually begin to worry about the risk of cancer and sometimes develop psychiatric illness, Coombs says. Compensation has been paid to people with plaques for the past twenty years. A typical award is £5,000, with the right to return to court if a serious illness develops, or £10,000 as a full and final settlement. Several of the men whose cases will be considered next week have worked in shipbuilding. According to Coombs, a lagger who worked with asbestos has a one in ten risk of developing mesothelioma. which he says has wiped out a generation of men. John Pickering & Partners specialises in asbestos-related claims and represents 200 people with pleural plaques. Does Coombs have a scan van? No, he says, I drive a Toyota.

He says that most sufferers are not identified in this way and they would always to have their condition checked by a chest physician. But these mobile scanning units do exist. He blames their arrival on non-lawyer claims companies that sell cases on to solicitors. We always send them away, he says.

They are very dubious people.

Norwich Union argues that medical evidence is on its side. Clayden says that the American Journal of Industrial Medicine, the British Journal of Industrial Medicine and other publications have come to the same clinical conclusion. The test case will determine whether our legal system should give compensation for conditions with no symptoms and no impairment to quality of life. Coombs argues that the insurance industry tried to change the law two years ago in the Fairchild ruling on a technical challenge - and it is trying again. This case is the other end of the spectrum, he says. In Fairchild, insurance companies argued that mesothelioma was not due to any single asbestos exposure if the victim had more than one source of exposure. Research was published last week by an actuaries' working party which claims that the total future UK cost of asbestos-related diseases was between £8 billion and £20 billion. Asbestos is not yesterday's problem its effects will continue to affect insurance companies and healthcare providers in the West for decades to come, says Julian Lowe, who chaired the working party. He reckons that lawyers, and their scan vans, are adding to the costs.

Claimant lawyers are sceptical about the report and its rather convenient timing. The actuaries' last report into the compensation culture, which found that the cost of compensation was roughly £10 billion in 2002, also proved highly controversial. It was dismissed by David Marshall, then president of the Association of Personal Injury Lawyers, as cynical mischief-making. In particular, he took issue with the inclusion of the cost of the BSE crisis, which he said distorted the picture. In fact Lowe, who is actuarial director at Norwich Union, believes that next week's challenge has little bearing on the economic impact of asbestos-related claims. The bulk of costs are to do with issues other than pleural plaques, he says. They represent 5-10 per cent of the total costs. The issue makes only one of the 200 pages in his report. He says that the timing of the report is coincidental and that the research is independent from the insurance industry.

However, the insurers are clear that what ultimately happens in this week's challenge will have an impact on all of us through our insurance premiums. If we are going to see an increase in the bounds of what is compensable, says Dominic Clayden. Insurers need to rate today for claims that will arise out of this year. This puts pressure on premiums because they are going to be more cautious.