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UK Asbestos Compensation Bill Explained

Introduced in November of 2005 and approved in July 2006, the UK Asbestos Compensation Bill is coming into law in 2007. Similar to the FAIR bill proposed in United States it seeks to regulate the claims process and protect corporations.

The following breaks down the bill’s possible impact and how it may lead to changes in American law.

In the first part of the bill a court will need to consider whether finding a defendant liable will prevent or impede “desirable activity.” It does not go on to specify the meaning of desirable but the presence of the terms indicate a subtle protection against corporations. Judges will have to determine a company’s desirable activity and that alone will lead to numerous challenges from both sides. In fact the idea of desirable activity often relates to civic venues like parks where compensation for a sensational event could disrupt the normal use of others.

While a large number of corporations have certainly collapsed due to the weight of asbestos litigation it is a dangerous slope to weigh personal health against corporate health.

An amendment tacked onto the bill eliminates the ability for a defendant (only with mesothelioma) in a multi-party suit to collect a full share from one party if the other parties don’t exist or cannot pay.

It is a plain corporate defense because payouts for mesothelioma are often larger than other asbestos related ailments (lung cancer, asbestosis).

The second part seeks to end the practice of “claim farming” which has become a problem in recent years. Think of a claim farm as a high load mutual fund, you put money in and depending on the load percentage could lose a significant amount initial costs. Furthermore you end up paying other fees as well and make a minimal gain.

While this is an obvious hyperbole, it has become standard fare for claim management companies which often swindle deserving victims of large sums of cash. Cases must now be handled by approved legal entities.

The problem with “claim farming” does not exist to the same extent in the United States but if the FAIR bill does eventually become law, it would need to be addressed.