Document QMMMJ49dBNzo8GmVZ3Yw5yZpE

FILE NAME Insurance Industry INS DATE 1991 DOC INS007 DOCUMENT DESCRIPTION Draft of Medical Journal Article - Insurance Reinsurance and Underwriting Names Liability for Asbestos Related Diseases with Cover Letter FRIERN HOSPITALHOSPITAL Mr. Barry Castleman 1722 Linden Avenue Baltimore Baltimore MD 21217 Friern Barnet Road London N11 3BP 01-368 1288 Ext Our ref Your ref Date 16th October 1991 Dear Mr. Castleman Thank you very much indeed for your kindness in sending me copies which I look forward to studying and also details book which I have ordered the photo- of your I am attending a conference on the topic in a day or two's time and have sent in some questions as per the enclosed draft article which has been provisionally accepted for publication by Medicine Science and the Law A much reduced version should come out next month in the ALM Newsletter and to yours to the British I have also sent off a letter in Journal of Industrial Medicine response Yours sincerely Malwen Well Dr. Malcolm P.I. Weller Consultant and Honorary Senior Lecturer Enc Insurance Reinsurance and Underwriting Names Asbestos Related Diseases Liability for Hampstead Health Authority Insurance Reinsurance and Underwriting Names Liability for Asbestos Related Diseases Introduction The association between asbestos fibre inhalation and lung disease has been known for a long time and Pliny the Elder and Strabo described sickness in slaves who worked with asbestos The modern history of the association and the serious cancer complications are outlined Twenty seven years ago encompassing the average latency of five to ten years for asbestosis to develop American legal safeguards based on inadequate sampling procedures specified maximal average levels which were 25 higher than the British during which the peak exposure which is the critical factor could often exceed by official measurements these average levels by over 400 times Scientists and indus- trialists were on record as appreciating that these levels were too high for reasonable safeguard As the term effects became better appreciated with lower exposure levels leading to greater longevity the association with cancers of the lungs the lining of the lungs and the abdomen became apparent Hueper writing in 1951 stressed that the actual connection between asbestosis and lung cancer appears very likely Hueper's views had been expressed earlier Hueper 1943 in a paper that was considered by an executive of the Mandofville Mandofville Corporation now Manville the largest - American asbestosis company Gardner 1946 The same concerns were expressed slightly earlier again in Canada Norway and France and a little later in Italy Desmeules et al 1941 Macklin and Macklin 1940 Wolff 1940 Lecoeur 1942 Mottura and Faggioano 1949 There is evidence that American manufacturers were negligent in failing to protect their workforce from even the specified maximal exposure or to inform them of the gravity of risk to which they were subjected The result has been a flood of litigation claiming damages to compensate victims under the general principles of liability in tort instead of the previously used more limited and modest compensation provisions of the Workmen's Compensation Acts The high cost of litigation results in only 39 of a successful claim eventually being paid to victims who may die before settlement The same issues are repeatedly considered by Courts and the ensuing costs are sharply exemplified by Picher Industries Inc now in bankruptcy proceedings whose litigation and attorneys costs in 1989 for approximately 137,000 claims pending against it were 119.7 million Since 1982 10 other major asbestos companies have filed for bankruptcy due to asbestos claims The Court rulings which cannot be appealed have lead to wide- spread criticism In essence there has been a shift to strict product liability to third parties for a manufacturer once his product has entered the chain of commerce and an opening up of general liability insurance policies many years after they were written to cover claims which at that time had not been contemplated The entire population has become potential claimants critics assert to compensate retrospectively for inadequate protective legislation practice and health care Yet it is impossible to insure the entire population since it is impossible to quantify the risk a prerequisite to setting premium rates The history of the recognition of the problem of asbestosis and associated malignancies and the implementation of protective industrial techniques are informative and relevant to the fact that the global results of Lloyds of London are in heavy deficit and worse is believed to follow British underwriting names have been driven to bankruptcy some having debts of 750,000 on a standard share in one beleaguered syndicate There are central issues to insurers and reinsurers liablity that merit further study Medical Issues Asbestos is a combination of silicates of magnesium and iron It is a versatile substance which is incombustable is capable of being woven into fabrics and can be impregnated with a variety of substances It is used in the manufacture of mattresses brake- linings proofing material electrical insulation jacketing boilers and steam pipes and in building products It was used for heat insulation in 1866 and asbestos cement was introduced a few years later There are three main types of which the blue variety crocidolite is the most toxic All three types are strong with crocidolite being inferior in tensile strength only to steel wire Amosite is a naturally long fibre an important variable in the relative industrial risk whereas white asbestos chrysolite which constitutes some 93 % of the world production is a very short fibre and less dangerous When the insoluble fibres are inhaled they remain in the body and cause progressive damage Asbestosis a term first used in 1924 by Cook in a paper published in the British Medical Journal is a slow insidious progressive replacement of lung tissue by fibrous tissue incited by the destructive asbestos fibres The reserve capacity of the lungs allows the development of the disorder over many years without severe symptoms until the damage is well advanced The pathological changes in the lungs throws a strain on the heart which has to pump blood through the damaged lungs and leads to congestive heart failure 1927 According to Dreesen et al whose ations Public Health Bulletin No. 1938 241 report and influenced recommend- subsequent American legislation in cases uncomplicated by infection asbes- tosis progresses by discernable stages similar to silicosis generally The increasing replacement of functional lung tissue by fibrous tissue results in shortness of breath cough weakness and chest pain which tends to impair working efficiency As the disease progresses further the sufferer does not appear well usually being considerably underweight and appearing tired and listless The surviving functional lung areas generally the apices become distended emphysema and the pathways to them dilated bronchiectasis and brochiolectasis facilitating infection At this stage detection of the condition by the traditional clinical methods of inspection palpation percussion and auscultation is generally possible ray changes are more sensitive to early pathology and progress from an exaggeration of the normal linear markings to granular changes caused by a fine fibrosis within the tissue spaces aptly described by Merewether 1933 as ground glass a term often used subsequently The radiological changes are characteristically more apparent in the bases of the lung unlike the pneumoconioses induced by other silicates with the exception of mica Later workers have emphasised characteristic patches plaques of radiographically opaque material on the lining of lung and thoracic cavity pleural surfaces A dry and non productive cough is common Later severe paroxysms of coughing may produce highly tenacious sputum sometimes streaked with blood There is a blue tinge to the lips cyanosis indicating inadequate oxygenation in the latter stages of the disease Reduced chest expansion and so called clubbing of the finger tips and curving of the finger nails pathognomonic of lung and cardiac disease are present in these cases The asbestos fibres migrate to other tissues where too they exert pathogenic effects particularly the induction of cancers probably at least in part by binding carcinogenic substances such as the products of tobacco smoke so that smokers are at much greater hazard 1 The combined hazard is more than add- itive so that the risk of lung cancer from asbestos exposure uncomplicated by smoking is increased some five times over the expected rate and the increased risk from smoking is probably elevated eleven times but the combined effect of persistent asbestos exposure and smoking is an increased risk of lung cancer 53 times Hammond above the 1966 levels prevailingin the general population ne Stopping smoking can considerably lower the risk of lung cancer among those previously exposed to asbestos and this is an issue that touches on contributory negligence that I believe has been little explored Two asbestos defendants have taken action against the tobacco industry in complaints filled in Bell v Manville Corp. No. C 80-3936 RFP U.S. Distric Court for the Northern District of Carolina and Robbins v Johns- Manville Corporation No. C 319-073 Superior Court of the State of California for the County of Los Angeles] Footnote 1 Any durable fibre with a length greater than five microns and a diameter less than three microns can induce cancers in experimental animals Stanton and Wrench 1972 and the volcanic fibre in Karain in Cappadocia 1 with these characteristics does so in man Baris 1980 The long latency between exposure and latant disease which may be as long as 40 years for some asbestos related diseases creates difficulties in defining a relationship and a long tail insurance claims Knowledge of the adverse effects has been accumulating and it is relevant to outline some aspects of the literature on the subject Growing Insight Into The Hazards In the Annual report of 1898 of women inspectors of factories HMSO 170 the microscopic appearance of sharp glass jagged asbestos fibres was described and the effects have been found to be injurious as might have been expected Auribault reported on numerous deaths in a French asbestos spinning and weaving mill between 1890 and 1895 publishing his findings in the Bulletin of Work Inspectors In Dangerous Trades edited by T. Oliver published by Dutton in New York in 1902 Anderson included asbestos amongst the dusts long known as injurious to man Scapa reviewed 30 asbestos workers who attended his clinic between 1894-1906 in his address to the 18th International Medical Congress in Rome the proceedings of which were published in 1908 and found rapidly progressive tuberculosis TB to be common A case of pulmonary fibrosis was reported by Murray in 1907 to the Committee on Industrial Hygiene in England with a history of 14 years work with asbestos Series of cases of asbestosis were subsequently described by a variety of observers including Pancoast 1918 Pancoast and Pendergrass 1926 Cooke 1924 1927 who had earlier coined the term Wood 1929 1930 Haddow 1929 Simson Lynch and Smith 1935 Ellman 1933 Merewether 1933-1934 Lanza et al 1935 Donnelly 1936 McPheeters 1936 and Shull 1936 More definitive studies were conducted by the Pennsylvania Department of Labor and Industry in 1935 and the U.S. Public Health Service and the North Carolina State Board of Health in 1937. The U.S. Public Health Service fully documented the significant risk involved in asbestos textile factories in a report by Dreesen et al in 1938 discussed earlier and urged elimination of hazardous exposure There is no cure and the utmost care should therefore be taken to minimise inhalation The situation was recognised early in the UK initially in 1917 when The British Factory Department ordered improved ventilation and later with more stringent obligations on manufacturers to control and suppress asbestos dust established under the Asbestos Industry Regulations of 1931. At this time world production was in the region of 340,000 tons In 1947 the American Conference of Governmental Industrial Hygienists a official body responsible for making recommendations concerning industrial hygiene issued guidelines suggesting threshold limits of 5 million particles per cubic foot of air probably influenced by the recommendations of the Public Health Service nine years earlier Dreesen et al 1938 Disquiet continued and % of all deaths among insulation workers were held to be due to asbestosis The New England Journal of Medicine published an editorial in 1965 vol 272 pp 590-591 insisting that certain industrial operations using asbestos can be made safe by engineering control In other operations this may be so difficult that substitution of a safer material must be considered In 1968 the American Conference of Governmental Industrial Hygienists reduced their recommended exposure levels to 2 million particles per cubic foot of air but serious doubt exists that even the earlier less stringent standards were observed In one key case Borel v Fiberboard et al Sept. 10 1973 discussed further a worker described to the Court how despite his earnest attempts to limit exposure his clothes were stiff with asbestos fibres at the end of a working day Cancer and Asbestos Exposure Malignancies are associated with asbestosis In 1942 and 1943 Gloyne published abstracts of German papers linking asbestos with plural cancer as well as lung cancer Gloyne 1943 1944 These abstracts were reprinted alongside others making similar points in the American Journal of Industrial Hygiene and Toxico- logy and the Industrial Hygiene Digest a journal which was circulated to Manderville and other asbestos companies who were members of the Industrial Hygiene Foundation In 1949 Merewether the Chief Inspector of Factories published his annual report and his finding of lung cancer in 13.2 of cases of asbestosis but in only 1.3 of cases of silicosis Following his publication of abstracts of German papers Gloyne published his own findings in the Lancet in 1951 of lung cancer in 14.1 of necropsies on subjects with asbestosis against 6.9 in silicates The increased risk of the lung cancer run by asbestos workers was confirmed epidemiologically in the mid 1950s in Britain Doll 1955 Epidemiological studies were hampered in America because necropsies were rare and illegal in some states In 1960 the previously rare tumour pleural mesothelioma was found to occur relatively frequently in South African asbestos workers and many subsequent studies have demonstrated a relationship between asbestos and this tumour and also an abdominal tumour peritoneal mesothelioma eg Newhouse and Thompson 1965 Knowledge of the condition and the complications were widely 10 disseminated in generalist journals such as the Lancet the British Medical Journal and the New England Journal of Medicine and reviews and abstracts were often reported on both sides of the Atlantic in broadly based accounts and abstracts of meetings and seminars such as the conference entitled Biological Effects of Asbestos held by the New York Academy of Sciences on October 19-21 1964 published in the Annals of the New York Academy of Sciences with abstracts in the Proceedings of the Royal Society of Medicine in England There was a steady stream of publica- tions in specialist journals devoted to industrial health and respiratory medicine at a rate of about 30-40 papers a year during the 1960s when world production of asbestos had climbed to around 3 million tons per annum the Trades Union Congress asked the Dr. R. Murray representing ea Section of Occupational Medicine of the Royal Society of Medicine in 1966 whether it was certain that the proportion of asbestos being used in \ | manufacturing processes justified the risks of asbestosis bronchial \ | use carcinoma and mesothelioma which were entailed by its | \ \ The scientific knowledge of the time was matched by the insight of industrialists In 1964 Mr. C.G. Addlingley of British Belting and Asbestos Ltd. Cleckheaton stated we do not believe there is any safe limit w e are always striving to get right down to zero there is no scientific basis for that limit 5mppcf whatever John Wells of U.S. Rubber Co. Newnan Ga repeated these views our own conclusion as we began seeing 11 what was happening in our own process was that the only safe amount of asbestos dust was zero and that the efforts in terms of achieving that lay basically in engineering and secondly in education But as far as a safe level of asbestos dust is concerned there is no safe level The safe level is nil and anything above the safe level represents certain risks A 1970 Senate Report on the Occupational Safety and Health Act stated that Because nothing has been done about the hazards of asbestos 2 0,000 out of 50,000 workers who have entered one asbestos trade alone - insulation work - are likely to die of asbestosis lung cancer or mesothelioma Nor is the potential hazard confined to these workers since it is estimated that as many as 3.5 million workers are exposed to some extent to asbestos fibers as are many more in the general population In 1978 the U.S. Department of Health Education and Welfare estimated that between eight and 11 million workers were exposed since World War 11. The Commercial Union Insurance Companies estimated that 13 million workers have been exposed since the 1940s Special Project 1983 Initial American Legal Requirements Despite the clear indications of serious industrial hazard workman's compensation laws long remained defective in the US and the legal requirements were inadequate to ensure the health of asbestosis workers Hueper 1965 12 As mentioned above in the review of the chronology of publications on this issue levels of 5.0 million particles per cubic foot of air for daily eight hour exposure was adopted by the American Conference of Governmental Industrial Hygienists in 1947 and reaffirmed in their conference of 1964 These levels were established on the basis of abdominal intraperitoneal injections into guinea pigs which may be regarded tentatively as the threshold value for asbestos dust exposure until better data are available Other evidence using the same experimental technique showed that this level was only applicable to short fibre asbestos observations and the levels were vigorous criticised as being inadequately stringent for humans For example Shall 1965 in a conference convened by the New York Academy of Science pointed out that the industrial plants studied manufactured textiles and the sampling procedure impinger collection in ethyl alcohol and distilled water included stone cotton and other dust particles and gave only a very indirect measure of the risk of asbestosis because of the relative importance of long fibres whereas the studies had predominantly been on supplies of the short fibre chysolite from Canada The sampling of subjects was biased the numbers very small and the controls inadequate The study was conducted for a mere five years in 333 of the 511 employees investigated more than half of 13 whom were under 30 the lowest average age of any group studied by the Public Health Service at that time for comparison the average age was 37.8 in the foundry industry The sick were missing and the dead were buried The 76 controls used for comparison were office workers in the same factories who were known also to have been exposed to asbestos dust so great is the toxicity that merely living in the vicinity of asbestos processing eg Wagner Sleggs and Marchand 1960 Wagner 1963 or handling the clothes of those who work in the factory eg Hourihane Lessof and Richardson 1966 can lead to asbestosis Further criticisms included the fact that the exhaust ventilation systems were not standardised and were inappropriate for scientific study The dust count is conceived as an average but in practice this average often encompasses an enormous range up to 211 million particles per cubic foot of air mppef being recorded and peak levels are probably highly significant because they overwhelm all defence mechanisms with huge lung retentions The unsatisfactory protective provisions did not eliminate any moral obligation upon employers or commercial prudence from insurers to ensure minimisation of risk particularly in respect of long fibre and blue asbestos and special precautions for the particularly vulnerable population of smoking workers or their elimination from the workforce Certainly some companies were alive to the problem Hoffman 1918 pointed out the probable hazards of asbestos dust and persuaded the Prudential Insurance 14 Company of Boston to discontinue issuing policies to asbestos workers Later an epidemiological survey of asbestos workers was initiated by the Metropolitan Life Insurance Company of New York Lanza McConnell and Fehnel 1936 The majority of industrialists were not responsive to the wide- spread knowledge in the public domain to take proper precautions to safeguard adequately the health of employers Evidence was adduced that during the period 1936-1969 no American manufacturer of asbestos containing products ever warned contractors or insul- ation workers of the dangers associated with inhaling dust or informing them of the American Conference of Governmental Indus- trial Hygienists's threshold limit values Borel v Fiberboard et al Sept. 10 1973 Further Evidence of Hazard Evidence of serious hazard continued to accumulate In a survey conducted of 115 deaths amongst asbestosis workers over the years 1931-1949 the mean age of death was 46.5 years At that time tuberculosis TB claimed many but pulmonary carcinoma affected 14.8 and abdominal malignancies 6.0 Wyers 1949 Following his published report in 1960 at the International Congress on Occupational Health in 1963 Wagner reported on more than 120 cases seen since 1956 Wagner 1963 The extreme toxicity of the virulent dust is so great that more than half the cases he described never worked in the asbestos indus ry but 15 simply lived near the mines and mills As suggested by this observation in Wagner's series tumours were found after comparatively low doses probably because the survival from compromised lung and cardiac performance was longer in this group TB was becoming increasingly uncommon and the overwhelming exposures seen in earlier days was largely avoided thus survival was increasing and the incidence of cancers was becoming more apparent Accordingly in a later series of 71 deaths spanning 1957-1964 pulmonary carcinoma had risen to 36.6 and primary malignancies of the lining of the abdomen the peritoneum had risen from % in Myers 1949 report to 18.3 Smithers 1965 In a survey published in 1965 of 1522 men working in the insulation industry it was concluded that asbestosis and its complications are significant hazards among insulation workers in the United States at this time 339 out of 392 workers in the industry followed up for 20 years had asbestosis Lung cancer was 7 times higher and gastrointestinal cancer 3 times increased Selikoff 1965 Selikof had emphasised the association in the preceding year in a publication in the widely read Journal of the American Medical Association Selikof et al 1964 and emphasised that his data do not give an indication of incidence since he had studied a group of men in the insulation trade with only intermittent exposure to materials containing limited amounts of asbestos in a trade with a short working week working in 16 variable conditions including the open air with results relating to the relatively recent past In the same paper he and his colleagues drew attention to the hazard of environmental exposure reviewing five papers from South Africa Britain and Finland Tighteneing of American Legal Requirements In 1968 the American Conference of Governmental Industrial Hygienists revised their guidelines suggesting threshold limits of 2 million particles per cubic foot of air instead of 5 million Discussion In American law a seller has a responsibility to inform users and consumers of dangers which the seller either knows or should know at the time the product is sold Manufacturers failure to provide such warnings renders them liable to damages It is estimated Einthoven and Kronick 1991 that despite nearly 15 of the gross national product being spent on health 40 million American citizens have no more than Third World care Against the difficulty the average citizen has in obtaining care for chronic disorders with inadequate benefits from public assistance programs and the workmen's compensation system which would generally result in a disability pension based on a percentage of weekly income claimants have turned to the tort 17 litigation system in increasing numbers with up to 25,000 plaintiffs claiming off more than 260 defendants in 1981 The tide I continues to rise unabated and has not begun to crest Summary of the Report of the Judicial Conference 1991 Predictions have been made of 200,000 asbestos disease deaths before the year 2000 and as many as 265,000 by the year 2015 MacAvoy et al 1982 American Courts have responded with awards against insurers for asbestos related risks with interpretations of the original policy wordings which stretch credulity and call in question the quality of justice which seems tainted by considerations of social engineering In essence there has been a shift to strict product liability to third parties for a manufacturer once his product has entered the chain of commerce and an opening up of general liability policies seemingly to compensate retrospect- ively for inadequate protective labour health legislation practice and health care The trials are complex and expensive In the Cimino v Raymark Industries trial in the Eastern District of Texas Civil Action No. 86-0456 CA E.D. Tex during the pendency the court signed 373 pretrial and trial orders there are 529 pages of docket sheets and over 3,000 depositions were taken The trial transcript contained 25,348 pages 271 expert and 292 fact witnessess testified and 6,176 exhibits consisting of 577 pages were received in evidence 58 lawyers participated in the 18 133 days of trial during which 488 of the original plaintiffs died and at least seven of the defendants had declared bankrupcy In a smaller case Reeves v American Export Isbrabdsten N. Dist of Ohio Civil Action Nos C86-2330 C86-821 C86-2559 C86-4601 involving only four plaintiffs the smallest number of lawyers in the courtroom at any one time during the trial was 41 and the maximum 58. There were 100 lawyers listed as counsel of record in the Brooklyn Navy Yard asbestos trial in the Southern District of New York Against these figures it is hardly surprising that the costs of litigation exceed victims recovery by nearly two to one and future claimants may lose altogether because of exhaustion of assets The picture is not a pretty one Decisions concerning thousands of deaths millions of injuries and billions of dollars are entangled in a litigation system whose strengths have increasingly been overshadowed by its weakness Hensler et al 1985 Underwriters twenty or more years ago apparently did not perceive any great risks from asbestos related claims Premiums were low and reserves inadequate This was despite the fact that knowledge was available in the medical literature including Journals of Industrial Medicine Proceedings of International Conferences on Asbestos related diseases and in the General Medical Journals despite the presence of legislation governing exposure levels because of the perception of the problem by Governments in America and Britain and despite the knowledge of 19 industrialists and at least some insurance companies Never- theless they had no reason to expect that their policies were going to be interpreted to mean that they were insuring the entire population Now the insurance industry is suddenly called upon to to cover incurred and anticipated liability on the interpreted meaning of the original wording The U.S. Judicial Conference Ad Hoc Committee on Asbestos Litigation 1991 lately reported that it believes it to be inevitable that unless Congress acts to formulate a national solution with the present rate of dissi- pation of the funds of defendant producers due to transaction costs large verdicts and multiple punitive damage awards all resources for payment of these claims will be exhausted in a few years An essay focussed on a particular industrial hazard may well seem to advance that problem to a more prominent position than is merited Historically other industrial hazards preoccupied scientific and commercial interests amongst the lung diseases tuberculosis coal miners pneumoconiosis and the general problem of silicosis for a long time eclipsed the specific silicosis problems of asbestosis Bladder cancer in the chemical industry and skin cancer in the cotton industry competed for peoples time and attention Nevertheless it is reasonable to expect that those concerned with mining or processing asbestos should have been alert to the growing body of medical opinion that first 20 tentatively and then authoratively established links between asbestos fibre inhalation and serious diseases In 1964 Selikof considered that his alarming results were tempered by the fact that they were obtained in an era when industry has been aware of potential asbestos hazard Similarly one would expect that underwriters would take some interest in literature pertinent to the risks they are covering Intelligence gathering in medicine is greatly facilitated by the excellent Index Medicus and it is simple to consult this publication for a comprehensive annual survey of the world literature Journals of Industrial Medicine might reasonably be consulted by the medical staff of major concerns and one at least is known to have been subscribed to by several asbestos producers It is impossible to draw a sharp line in time to say when a particular viewpoint has become ingrained in the consciousness of those intimately concerned with the issue What is clear however from a reading of the major journals and abstracting services is that a Nelsonian eye seems to have long been turned towards the mounting evidence of industrial hazard In his evidence to the Court Dr. Clark Cooper an expert witness for the defence in Borel v Fiberboard et al 1973 testified as follows Q The state of knowledge in the 1930's lets say in your opinion was asbestosis as a disease known about and recognized as a danger caused by inhaling asbestos dust A. Yes 21 Q. And would you say that would have been rather common knowledge in the 1930's A. Yes I would say that The answer to that would be yes clearly indicating that the hazard was appreciated One of the criticisms made by the Appeal Judges in Borel v Fibre- board was that manufacturers did no research into the hazard no manufacturer ever tested the effect of their products on the workers using them It would appear that their behaviour was more reprehensible than this and it would seem that they actually sponsored research albeit properly on animals and then supressed publication of the unfavourable outcome Brodeur 1985 Huncharek 1990 Castleman 1990 Legal safeguards which sluggishly responded to the scientific understanding seem to have been outrageously flouted This is the view of the Courts that have indignantly awarded punitive damages to claimants very nearly 5billion dollars between 1980 and 1982 Rand Corporation 1984 In an asbestos case tried in the U.S. Virgin Islands in the Autumn of 1990 the verdict in- cluded a 25 million punitive damage award to one plaintiff against one defendant The total verdict was 26.3 million see Washington Post B1 B4 November 29th 1990 22 The American Government accepted its culpability in the Naval shipyards during World War 11 when the war effort condoned unsafe practices of PPG Industries and Corning Glass Works Distric Court for the Eastern District of Texas 1978 It seems ironic that insurers should be called upon to pay punitive damage awards that arise because manufacturers flouted appropriate safe- guards and hazarded mens lives for commercial gain and worse that they seemed to suppress proper research findings that went against their perceived interests of Brodeur 1985 Huncharek 1990 Castleman 1991 thus seriously jeopardising their claims by breaching the principle of utmost good faith implicit in all insurance contracts in the light of information obtained through legal discovery proceedings in hundreds of asbestos law- suits it is undeniable that leaders of the asbestos industry conspired to misinform both the public and the scientific commun- ity about the dangers of asbestosis Huncharek 1990 It is doubly unreasonable that reinsurers should be called upon to meet the negligence of the primary insurers when they failed to ensure that their commercial interests were reasonably protected and themselves failed to heed the readily available knowledge of industrial hazard Most of all it is remarkable that Lloyds names should be held personally liable when so many on whom they rely appear to have failed in their duties of care 23 To exemplify the cavalier attitude to safety in the key case Borel v Fiberboard et al Sept. 10 1973 Borel was diagnosed as suffering from asbestosis by a doctor employed by an insurance company Borel protested that basic safety equipment like masks initially were not available and then had to be specially requested and were intolerable for prolonged wear He stated that his clothes were stiff with asbestos dust at the end of each working day when legal ventilation requirements limited dust exposure to levels where this would have been impossible Commercially it would have been prudent to have insisted on the manufacturer adopting the necessary safety procedures and to have excluded Mr. Borel from further cover as it would have been prudent to have excluded all other employees so affected and particularly all those who were smokers Borel pitifully but convincingly stated that he did not know what asbestosis was and the Court concluded that the manufacturer's warnings were totally inadequate It is debatable whether reinsurers on the other side of the Atlantic should be held liable if proper precautions failed to be taken because the original insurers were negligent in their duty However until the Outhwaite syndicate recently protested its reinsurance liabilites on the basis of inadequate disclosure such matters have never been addressed Outstanding questions regarding names liability are i if manufacturers well knew the inevitable consequence of 24 not complying with legal safeguards and yet failed to do so should claims have been made on insurers since the outcome could not be regarded as fortuitous Indeed recent American judgements in relation to pollution claims the Shell Oil trial in California and the Diamond Shamrock trial in New Jersey reinforce the concept that a fortuitous outcome is a central requirement of a viable insurance contract ii if manufacturers failed to disclose information in their possession germane to the risk whether they have breached the fundamental requirement of utmost good faith and prejudiced their contracts of insurance iii whether primary insurers were liable for illegal industrial practices and properly paying awards of punitive damages iv whether primary insurers sought to minimise their risk by insisting on prudent industrial practices and if they did not whether they exercised due diligence v whether insurers or reinsurers sought to stratify the known risks e.g by raising the premium for smokers and workers with already established lung disease or 25 excluding them from their policies Envoi It has long been known that workers with nickel carbonyl nickel refiners arsenic weed killers haematite quarry workers and persons working with chromates all have a high incidence of lung cancer and it is obvious that such workers too require very carefully controlled working environments Malcolm P.I. Weller 26 References American Conference of Governmental Industrial Hygienists 1964 Threshold Limit Values for 1964. American Conference of Governmental Industrial Hygienists Cincinnati Ohio Baris Y.I. 1980 The clinical and radiological aspects of 185 cases of malignant pleural mesothelioma In Wagner J.C. ed Biological effects of mineral fibres Vol 12 Lyon International Agency for Research on Cancer 937-47 Castleman B.I. 1991 Asbestos and cancer history and public policy British Journal of Industrial Medicine 48 427-432 Doll R. 1955 Mortality from lung cancer in asbestos workers British Journal of Industrial Medicine vol.12 pp 81-86 Desmeules R. Rousseau L. Giroux M. Sirois A. 1941 Asbestosis and pulmonary cancers Laval Medicina 49 14-27 Dreessen et al 1938 A study of Asbestosis in the asbestos textile industry Public Health Bulletin No. 241 Einthoven A.C. and Kronick R. 1991 Universal health insurance through incentives reform Journal of the American Medical Association vol 265 pp 2532-2536 Ellman P. 1933 Pulmonary asbestosis its clinical radiological and pathological features and associated risk of 27 tuberculosis infection pp 165-183 Journal of Industrial Hygiene vol 15 Gardener L.U. 1943 Letter to V. Brown and attached outline of proposed monograph on asbestosis 24 February cited Castleman 1991 Gloyne S.R. 1943 Abstract of Nordmann M. and Sorge A. Lung cancer from asbestos dust in animal experiments Z. Krebsfortsch 1941 51 168-82 in Bulletin of Hygiene 1943 651 Gloyne S.R. 1944 Abstract of of Wedler H.W. Lung cancer in asbestosis patients Deutches Archiv fur Klinischen Medizin 1943 191 189-209 in Bulletin of Hygiene 19 362 Haddow A.C. 1929 in Report of Annual Meeting of British Medical Assoiation Manchester 1929. Lancet 2 230-231 Hammond E.C. 1966 Asbestos exposure cigarette smoking and death rates Annals of the New York Academy of Sciences vol 330 pp 473-490 Hensler et al 1985 Asbestos in the Courts The Challenge of Mass Toxic Torts iii Foreward Institute for Civil Justice of the Rand Corporation Hoffman F.L. 1918 Mortality from Respiratory Disease in Dusty Trades Bulletin of U.S. Bureau of Labor Statistics No. 231 Industrial Accident Hygiene Service No. 17 U.S. Bureau of 28 Labour Washington D.C. Hourihane D. O'B Lessof L. and Richardson P.C. 1966 Hyaline and calcified pleural plaques as an index of exposure to asbestos A study of radiological and pathological features of 100 cases with the consideration of epidemiology British Medical Journal vol 1 pp 1069-1074 Heuper W.C. 1943 Cancer in relation to occupation and environ- ment Bulletin of the American Society for the Control of Cancer 25 63-9 Hueper W.C. 1965 Occupational and nonoccupational exposure to asbestos Annals of the New York Academy of Sciences vol 131 pp 184-195 Huncharek M. 1990 Asbestos a chronology of its origins and health effects British Journal of Industrial Medicine 47 845 Judicial Conference Ad Hoc Committee on Asbestos Litigation 1991 Summary of the Report Agenda 23 March Kilvuoto R. 1960 Pleural calcification as roentgenologic sign of occupational endemic anthrophyllite Acta Radiol Suppl 194 1-67 Lanza A.J. McConnell W.J. & Fehnel J.W. 1935 Effects of the inhalation of asbestos dust on the lungs of asbestos workers Public Health Report vol 50 pp 1-12 Reprint no 1665 29 Lecoeur J. 1942 The study of occupational cancer Medicale 50 415-18 Presse MacAvoy P. et al Related Diseases 1982 The Economic Consequences of AsbestosYale University School of Organization and Management Working Paper No. 27 January Macklin M.T. and Macklin C.C. 1940 Does chronic irritation cause primary carcinoma of the human lung Archives of Pathology 30 924-55 McCaughey W.T.E. Wade O.L. and Elmes P.C. 1962 Exposure to asbestos dust and diffuse pleural mesotheliomas British Medical Journal 1397 Merewether E.R.A. & Price C.W. 1930 Report on effeccts of asbestos dust on the lungs and dust suppression in the absestos industry H.M. 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