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You are in: Home Page | News Desk | News Story

20th October 2006

Debate over whether asbestos bill should be paid in full

Administrators' Fees of £70m for negotiating compensation for asbestos victims

Houghton and Washington East MP, Fraser Kemp, has called for a full debate on the issue to look at whether the administrators should take a cut in their fees.

Kroll, the administrators acting on behalf of Federal Mogul (the US parent company of Turner and Newall), and their lawyers, are set to be paid the full amount of their bill despite only a percentage of compensation being paid to asbestos victims.

Exposed to asbestos at work

As administrators, Kroll was put in charge of negotiating a compensation scheme for employees who had been exposed to asbestos while working for companies of the parent firm Federal Mogul.

Federal Mogul went into administration in 2001, freezing all compensation payments. At the time Federal Mogul faced claims in Britain estimated at up to £340m.

Many of the workers went on to develop diseases like mesothelioma and around 100 have died while waiting for their compensation.

A compensation deal was agreed earlier this year, with a pot of £69m put aside for claims. This month claims were restarted for the first time in five years.

Under the deal some mesothelioma victims with claims worth £100,000 will only receive £20,000.

Kroll has charged around £40m for their fees and their legal and professional advisors are set to receive a further £30m.

It is understood the bill will be paid in full.

Mr Kemp tabled the following early day motion:

“That this House recognises that the legal company which handled the administration of Federal Mogul is claiming £70 million in fees; notes that this is £1 million more than the fund set up to compensate workers and families who contracted asbestosis in its UK factories; recalls that these workers and their families finally agreed a compensation deal earlier this year; further notes that these victims accepted an offer of 20 pence in the pound, meaning they will get just one fifth of the original value of their claim; calls on the Lord Chancellor to consider whether it is time to put a cap on administration's financial claims; and further notes the contrast with the victims' solicitors, Thompsons, who acted as unpaid volunteers on the creditors' committee.”

Ian McFall, head of the asbestos team at Thompson Solicitors, who are advising hundreds of claimants, said: “I would welcome an open debate on this matter. I gave my time as an unpaid volunteer on the creditors committee to argue that victims in should receive the best possible compensation deal.

“For those families who have suffered, it will be hard to accept that they may get only 20% while the administrators and their lawyers will be paid their bill of £70m in full.”

Compensation Claim Advice

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Thompsons Solicitors are experts in all personal injury matters. We will be able to advise you whether or not you have a valid claim for compensation. Our specialist personal injury lawyers will be happy to talk you through the process of making a claim in plain English and will be happy to answer any questions or queries you may have. If you do have a valid personal injury compensation claim and you decide to instruct Thompsons Solicitors to deal with the matter for you, we will recover our legal fees from the person responsible for your injury, ensuring that the entire procedure is cost-free for you. Telephone us now on 08000 224 224 or complete one of our online personal injury compensation claim forms.