The Lloyd's Risk Blog » Liability

Pollution—an enduring tragedy

Garry Booth — Wed, 19 Aug 2009 15:47:32 +0000

The High Court has decided that Corby Borough Council was negligent in its clean-up of a former steel works in the town, which may have led to birth defects in 16 children. Deformities to hands and feet were the result of mothers being exposed to a ‘soup of toxic materials’ between 1985 and 1999, the court was told.

The council said it was ‘disappointed’ at the ruling, maintaining that there had been no link between the birth defects and the reclamation work. Corby says it will appeal against the High Court ruling and start mediation with the families and claimants involved in the case (BBC news, 19 August).

Simon Johnson, director at Lloyd’s broker Aon, said that the Corby litigation could stimulate more legal action particularly affecting councils that have invested in regeneration and built on brownfield sites. “Most worrying, defence and other costs could run into millions of pounds and may not be insured,” he commented.

In recent years industrial pollution issues have been dominated by global climate change or other environmental concerns. But as the Corby case shows, pollution incidents can end in human tragedy. The misery is often prolonged as legal disputes take years to unwind.

In fact this year is the 25th anniversary of the Bhopal disaster. Poison gas leaked from the pesticide factory operated by Union Carbide killing thousands and injuring many more. In 1989, Union Carbide agreed to pay $470m in compensation.

But like pollutants, the repercussions cannot be easily washed away: in Bhopal 100,000 people say they are chronically ill as a result of the accident. And this month an Indian court reissued its arrest warrant for Warren Anderson (BBC news, 31 July), who was the head of Union Carbide when the accident happened.

Big Brother is watching you….sneeze

Trevor Maynard — Wed, 03 Dec 2008 16:40:43 +0000

Scientists are planning a “big brother” style experiment to test some theories about the transmission of the flu. They will infect a number of individuals and then expose them to a variety of social situations to see how the flu is transmitted.

I found it particularly interesting to see they are focusing on the debate over whether the flu is transmitted via airborne particles or surfaces.

This is an interesting question, not least because if surfaces can act to transmit the flu it opens up other routes for legal liability challenge.

Our pandemic report considers the following scenario:

“A catering company is responsible for the food for a particular global airline. It is discovered that the pandemic can be spread on packaging and after a review the global explosion of the pandemic is tracked back to a sick individual in the company whose health procedures were inadequate. Is the company responsible?”

The proposed Big Brother research may help to answer the question of whether packaging could spread the flu, and therefore help us to anticipate possible legal challenges in future.

Novel materials, novel risks

Trevor Maynard — Thu, 13 Nov 2008 09:05:33 +0000

Another report (released yesterday) has yet again highlighted the uncertainties in the risks of nanotechnologies and nano-materials. These materials are already in the consumer market and show promise to provide great benefit to society and consumers.

However, some scientists believe that some nano-materials may cause health or environmental impacts. The Royal Commission report on novel materials has made an urgent call to bridge the knowledge gap of the potential environmental and health impacts of nanotechnologies in a systematic and strategic way. They say “we strongly recommend a more directed, more coordinated and larger response led by the Research Councils to address the critical research needs…”.

There is also a call to amend regulations, such as REACH, so that they can be effectively applied to nano-materials. This is very much in line with the report published by Lloyd’s Emerging Risks team on Nanotechnology.

Our report proposed some systemic failure scenarios, a theme also recommended by the Royal Commission who call for “Evaluation of methodologies for predicting the likely fate and effects of nano-materials based on their physical and chemical properties as well as their novel properties, and where possible, the development of exposure scenarios.”

If the Commission’s governance recommendations are followed there will be considerably more clarity around responsibilities.

For example they call for DEFRA to require mandatory reporting where food contains nano-particles; they also suggest that companies should have a legal duty to report any suspicion that a material presents a risk to the public or the environment.

Such clarity can only be useful to insurers providing liability cover given that companies are operating in an increasingly litigious world, as highlighted by the Lloyd’s 360 report “Directors in the dock“.

It will be fascinating to follow this debate as it progresses.