Asbestos Victims Support Groups’
Forum (
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An
agreement has been reached in
principle which would allocate £375m to T&N asbestos claimants and the
T&N Pension Fund: £33m to asbestos claimants and £250m to the Pension Fund.
Additional money may be available from the Hercules re-insurance policy for
asbestos claimants.
The
agreement in principle would provide a dividend of about 24p for asbestos
claimants and it has been estimated that members of the T&N pension scheme
might lose 25% of the net value of their pension
entitlement.
This Administrators, Kroll, caution
that “we must temper our delight at
today’s news”, because the agreement has not yet been sanctioned by the
Court. However,
for many asbestos claimants who receive only a 24p dividend this can hardly be
an occasion for delight.
A critical issue for asbestos claimants is the effect of recovery of benefits and the effect of any payment made by the Workers Compensation Unit. We have summarised below the two main sources of payments to T&N asbestos claimants.
Who does it
apply to?
All T&N claimants will be entitled to a dividend from
the £33m allocation, which will provide a dividend of about 24p in the pound.
What about
recovery of benefits?
It is likely that similar
arrangements to those proposed for payment to claimants covered by employers’
liability insurance (EL) will apply to the payment of a 24p dividend. The
Compensation Recovery Unit (CRU) is likely to have the status of creditor, but
will only be able to recover benefits paid to claimants at the pro-rata rate of
about 24p in the pound. The recovery will NOT be made from the claimants’ dividend, however, any CRU recovery will reduce the total
amount available to pay a dividend to claimants.
Workers
Compensation Payment?
Presently, the proposed
arrangements for EL payments include credit for payments made to claimants under
the Workers’ Compensation Act. This would seriously affect claimants’ dividend
and claimants’ solicitors are objecting to this provision in the EL insurance
arrangements.
When will the
dividend be paid?
The dividend will be paid only if the Court agrees the arrangements. We do not know when that will be.
Payments for
Claimants covered by Insurance
As we explained in our
newsletter in August 2004, the insurers, Royal & SunAlliance and Lloyds Syndicate, have come to an agreement
with the Administrators on payments to T&N claimants who are covered by
their insurance. This payment will be made in addition to the 24p dividend from
the general fund.
How much will
be paid?
The expected dividend could
be 60p -70p in the pound.
Who does the
agreement apply to?
Only those claimants who
worked for T&N after 1969 will be covered by this agreement.
Account will be taken of any
exposure before 1969, (1972 for asbestosis) and compensation will be reduced
proportionately, except for mesothelioma and lung cancer, which will NOT be
subject to apportionment.
When will the payment be made?
It is hoped that payment will
be made early in 2006.
What about recovery of benefits?
As explained, CRU will be entitled to recovery from the fund on a pro-rata basis, which will not affect the proposed level of dividend. Credit will be given for Workers Compensation payments, which will affect the dividend.