Hopes that the courts would clear up confusion about the liability of UK companies for harm alleged to have been caused by their operations to communities abroad have been dashed by an out-of-court settlement in a high-profile case.
The case, taken against UK-based Cape plc by South African miners suffering from asbestos-related diseases, was due to have started in the High Court in London in April, and would have helped to clarify whether UK companies could be sued in respect of their operations overseas.
However, Cape has reached an agreement with 7500 South African miners and their families to pay £21million ($30m) into a trust fund for them. As a result the case will no longer go ahead.
The fund will be administered by five trustees: two nominated by the South African government, one by Cape and two by the claimants’ lawyers. They will make payments to those who can show they have suffered from asbestos-related disease as a result of working at, or living in the vicinity of, one of Cape’s former operations in South Africa.
The claims related to asbestos mining during the apartheid period in South Africa. Cape, which has been based in the UK for 100 years, closed its operations in South Africa in 1979, and argued that it was not responsible for the actions of its former subsidiaries.
Richard Meeran, a solicitor at Leigh Day, the UK legal firm representing the miners, said the setting of a legal precedent on the issue of corporate liability had to take second place to getting money for the claimants.
‘The problem for us was that Cape’s financial position is such that it would go into liquidation if it lost the trial,’ he said. ‘In those circumstances, the only real achievement might have been to set a legal precedent with the victims receiving virtually nothing.’
Meeran claimed the payout represented ‘a salutary warning to multinationals’. But he praised the newly-appointed chairman of Cape, Paul Sellars, ‘without whose intervention this case would probably have continued on a downwards spiral for all concerned’.