This month, Saraya and James attended the CII lunchtime lecture in Bradford. This covered Disease and Latent Liability claims, and was delivered expertly by Alison Moss and Tracey Hulme from Hill Dickinson.
The presentation dealt with Disease related claims, such as Mesothelioma, respiratory issues, knee litigation and other health related illnesses, many occurring as a result of poor working conditions in the 1950’s and 1960’s. We learned how following mergers and acquisitions, companies are frequently unable to trace details of historic insurance arrangements. In some cases, the original company to which the legacy claim relates, may now be dormant with no financial assets. It is then the Solicitor’s challenge to build a case and gather evidence, using innovative solutions to minimise or even extinguish a business’ potential liability. Alison and Tracey told us a fascinating story about a well-known textile manufacturer that was unable to find any historic insurance records relating to legacy insurance claims. Commendably, they were able to locate the author of a book on the history of the company, who also happened to be in possession of board meeting minutes from the 1950’s, which included details of the firm’s insurance arrangements! This allowed them to build a case against a potentially liable insurer.
The lecturers provided many other detailed examples of how being able to build an historic insurance timeline, together with relevant insurer information, has aided companies in securing a higher selling price, as buyers have been able to measure all potential risks and enter into an agreement with their ‘eyes wide open.’
In 2000, new regulations were implemented to protect employees who are part of a TUPE transfer when their original company is sold. Pre 2000, any parent companies following a TUPE transfer were not liable for any historic losses - this has now changed and apparently, it is catching out many companies. Hill Dickinson are expecting another surge in Disease claims between 2016 and 2020 and expect these legacy claims to continue coming out of the woodwork for at least another decade.
We learned how Hill Dickinson works proactively to protect its clients against legacy Disease claims. The business advises to try and settle any claims expediently and then legally dissolve any dormant companies within a parent group. Their advice is to try and avoid the acquisition of any company without the historic insurance records, and to ensure that indemnities for specific losses are included within the business contract.