ASBESTOS-related claims will cost Britains private and public sectors up to £20 billion over the next 30 years, it was revealed yesterday.
Insurers face a bill of up to £10 billion for compensation and legal fees, while companies will be forced to pay out as much as £6 billion and the Government up to £4 billion.
Actuaries used previously secret records on asbestos-related deaths held by the Health and Safety Executive (HSE) and information on insurance claims to calculate the most accurate estimate yet of Britains asbestos bill.
However, the Governments liability could be much greater because many of the companies facing legal action, such as shipbuilding groups, have since collapsed. Turner & Newell, the engineering group and one of the UKs biggest manufacturers of asbestos, is in administration.
Julian Lowe, who headed the study for the Actuarial Profession, the professional body for actuaries, said he expected between 80,000 and 200,000 new asbestos-related insurance claims in the next 30 years. Insurers received 12,370 claims last year.
Asbestos is certainly not yesterdays problem, Mr Lowe said.
But some of Britains largest insurers hope that a test case due to be heard in the Manchester High Court on November 8 will limit their rocketing liabilities.
Norwich Union (NU) and Zurich, which potentially face a huge number of claims, will bring the case in collaboration with the Department of Trade and Industry (DTI), in an attempt to cut compensation payments to sufferers of pleural plaques, a harmless calcification of the lungs that can be caused by asbestos exposure but does not cause any symptoms.
Mr Lowe said there was a danger that British insurers would be hit by a flood of claims from the worried well people who have pleural plaques and are concerned they may develop mesothelioma, a type of lung cancer.
In the US, worried-well litigants account for three quarters of all asbestos compensation claims.
Mr Lowe claimed that ambulance-chasing lawyers had begun taking scan vans vehicles equipped with X-ray equipment to UK towns that formerly had asbestos industries to find people with pleural plaques, in order to encourage them to sue.
In the High Court next week, insurers will contest 11 pleural plaques cases. Dominic Clayden, director of technical claims at NU, said they would argue that unless the compensation paid to the worried well was capped or scrapped altogether insurance costs would rise.
If we cant get clarity on this and get to the point where the courts make us pay compensation on asymptomatic conditions, that will in the long term have an upward effect on premiums, he said.
Asbestos, which used to be known as white gold or the magic mineral, was widely used between 1950 and 1980 and was not completely banned until 1999.
ASBESTOS IN THE US
$70bn: amount spent on settling asbestos claims
$275bn: estimated cost of asbestos claims
100m: number of Americans exposed to asbestos at work
730,000: number of Americans that have filed asbestos claims since the early 1980s.
70: number of companies that have filed for Chapter 11 bankruptcy because of asbestos compensation payments