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You are in: Home Page | About Thompsons | Information and Resources | Briefings and Responses | Litigation in South Africa againat GENCOR, GEFCO and MSAULI

March 2003

Litigation in South Africa Against GENCOR, GEFCO & MSAULI

A Briefing document for Trade Unions

Background

In May 2002 Thompsons were approached by the South African law firm Ntuli Noble Spoor to work with them and the mining unions in obtaining compensation for the victims of asbestos dust exposure from the South African asbestos mining industry and the activities of Gencor in particular.

Gencor, now a shell company, was involved in the South Africa mining industry between the mid 1960s and 1980s when it owned, managed and controlled Gefco and Msauli.

None of these companies so far as we are aware carried liability insurance for the consequences of asbestos exposure and claims for damages on behalf of injured persons against their employers are rare.

Victims of exposure include not only those who have worked in the mines but those who have lived in an environment polluted by the mines.

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The campaign

Thompsons agreed to be responsible for the funding of the project and to bring our considerable experience in dealing with such claims for damages within the UK jurisdiction.

An office was set up in the Kuruman in the Northern Province which is in the middle of Gefco’s former mining activities. Over 4,000 claims were registered on behalf of former workers as well as those who have lived in the vicinity of the mines and became ill from the pollution of the environment.  Many claims were registered on behalf of those who have died already as a result of asbestos exposure.

We also established an office in Johannesburg in order to litigate the claims through the South African court system.

We made it our priority to establish close liaison with both the National Union of Mineworkers and the National Union of Metalworkers in South Africa, as they were the principle unions involved.

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The unbundling application

In taking the action against Gencor we had to move fast. The company planned to “unbundle” its remaining assets by transferring them to its shareholders, and announced that it would do so shortly after we began registering claims. Were unbundling to take place there would be no money left to compensate any victims. The claims were in danger of becoming worthless overnight.

We applied to the High Court in Johannesburg to seek to prevent the unbundling on the basis that Gencor would be unable to meet its liabilities. But Gencor used every conceivable argument in court, including that evidence of the damaging effects of asbestos exposure were grossly overstated and that that there were many other factors which caused distress in the former mining industries which could not be attributed to exposure to asbestos dust causing illness.

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Negotiations and settlement

At the conclusion of the hearing it was clear that Gencor’s victims would be unlikely to persuade the court that they had claims of sufficient value to prevent the unbundling in its entirety.

However, Gencor was prepared to consider settlement and we entered into negotiations, the result of which has been the creation of a settlement of approximately £35 million.

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The Asbestos Relief Trust

The Trust will provide a framework for the compensation of asbestos victims over the course of the next 20 to 30 years. It will be administered by five trustees who will be independent of the lawyers and the companies involved. Because two of the trustees are appointed by the victims’ lawyers we have decided that one of those them should be in the gift of the National Union of Mineworkers of South Africa.

The Trust provides compensation for the following groups of victims:

The future

This settlement and the establishment of the Asbestos Relief Trust is a landmark in the interests of working people in South Africa.  That said the amount of money retained is a drop in the ocean compared to the profits that have been made by mining companies and others on the backs of largely black South African workers who have had to endure appalling working conditions and appalling illnesses.

Thankfully, asbestos is no longer mined in South Africa. However, the prevalence of disease in other mining industries including coal and most importantly gold mining is of great concern.  The incidents of pneumoconiosis and silicosis in these mining sectors is a scandal of even greater proportions than the asbestos legacy.

Thompsons is in discussion with the South African trades unions about future projects which may be built upon the experience obtained from the Gencor litigation.

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Further details of the South Africa asbestos campaign can be found at

www.asbestosclaims.co.za

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