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A landmark decision by Britain's high court has opened the doors of the English courts to foreign plaintiffs injured by the overseas operations of British companies and their subsidiaries.
A House of Lords ruling on July 20 authorized 3,000 South African asbestos victims to continue their case in the UK courts against British asbestos maker Cape Plc.
From the start of the legal proceedings in the United Kingdom, Cape has desperately sought to move the case to South Africa, even to the extent of offering the Centre for Applied Legal Studies in Johannesburg 2.5 million rands (about US$360,000) to represent the victims in South Africa.
But in a unanimous judgment in the case, Schalk Willem Burger Lubbe et al., the House of Lords sided with the asbestos victims. If the case were moved to South Africa, the five Law Lords found, "the probability is that the plaintiffs would have no means of obtaining the professional representation and the expert evidence which would be essential if these claims were to be justly decided. This would amount to a denial of justice."
The verdict in the Lubbe case is a stunning reversal of fortune for Cape, a multinational conglomerate domiciled and incorporated in England, with annual sales revenues of $384 million and net assets of $86 million.
Cape has, in the past, succeeded in exploiting jurisdictional issues to its advantage. A product liability lawsuit brought by U.S. workers against NAAC, Cape's North American marketing subsidiary, failed in 1988 because the English Court of Appeal refused to enforce a $15.6 million default judgment issued by a U.S. District Court in Tyler, Texas.
In the U.S. case, Cape refused to submit to a foreign court's jurisdiction; in the South African case it "agreed to submit to the jurisdiction of the South African court in respect of the claims."
The strategy behind the company's change of tack is obvious: Cape had little to lose by appearing in South Africa, where legal aid for personal injury cases is unobtainable and lawyers would be unlikely to fund such complex and time-consuming cases on a contingency basis. The company had everything to lose in the UK forum: legal aid had been awarded and the firms of Leigh, Day & Co. and John Pickering & Associates, experienced in class actions and asbestos litigation, were representing the Lubbe claimants.
The progress of the Lubbe case was closely monitored by lawyers from T&N Ltd., the current incarnation of Turner & Newall Ltd., an enterprise which dominated the UK asbestos industry and, at times, rivaled the U.S. asbestos giant Johns-Manville.
After the ruling, lawyers from Leigh, Day announced that hundreds of asbestos cases from Swaziland, Zimbabwe and India, which had been dormant during the Cape appeal, will now move "ahead with speed towards trial" in the United Kingdom.
Other British multinationals may ultimately find themselves defending their actions in UK courts, as well. "The House of Lords' decision is a victory for justice and has signaled a new era both in terms of legal accountability of multinationals and the protection of human rights by the English courts," says Richard Meeran, the English solicitor representing the majority of the Cape plaintiffs.
THE JURISDICTIONAL STRUGGLE
Winning their jurisdictional dispute has been a long, uphill climb for the Lubbe plaintiffs, who faced immense obstacles, including jurisdictional problems and evidentiary difficulties. Initially denied permission to proceed in 1997, the five plaintiffs in the case subsequently won the right to sue in England on appeal. On December 16, 1998, the House of Lords confirmed that the cases of Rachel Lubbe et al. could proceed.
One month later, plaintiffs' lawyers sought to enlarge the group of plaintiffs to include Hendrik Afrika, Cupido Adams and 1,537 others suffering from diseases allegedly related to occupational or environmental exposure.
Cape responded by seeking to stay proceedings "so that the claims could be returned to South Africa as a group action." This maneuver succeeded.
"The operation of asbestos mines and mills in South Africa appears to have caused widespread injury, suffering and death over many years," found Mr. Justice Buckley in a July 30, 1999 decision. "An inquiry into the circumstances including local standards, conditions, regulations and state of knowledge of the parties and, if appropriate, assessment of damages to compensate the South African victims are overwhelmingly matters in which the South African jurisdiction has far greater interests."
As the plaintiffs appealed to the UK's highest court, the South African government took the unusual step of making a submission directly to the Lords.
"The allegations against Cape did not take place in a legitimate legal system and the new South African Government cannot afford to determine every wrong of the old regime through its judicial system," the South African government noted in its submission to the Lords. "The discriminatory health and safety laws, which left South African workers unprotected, or significantly, underrepresented, against known risks as a matter of South African law were against the law of humanity."
One year after the case had been directed to South African courts, the House of Lords agreed with South Africa and the Lubbe plaintiffs, and ordered the case to proceed in the UK courts.
Thabo Makweya, the environment minister from South Africa's Northern Cape province, is delighted with the result. "We can't allow the multinational companies to get away with murder," he says. The South African government is now working with the lawyers and campaigners "to ensure that the speediest resolution of this case is found," Makweya adds.
"We see this as vindication after three years of legal wrangling," says Aditi Sharma of Action for Southern Africa, the UK successor organization to the Anti-Apartheid Movement. "We will now begin the battle for compensation itself, and will continue to pressure shareholders, consumers and clients so that Cape delivers compensation as speedily as possible."
SOUTH AFRICA'S ASBESTOS LEGACY
Cape, formerly the UK's second biggest asbestos group, and its subsidiaries had mining, milling and manufacturing operations in the South African provinces of the Northern Cape, the Northern Province and Gauteng. Cape Asbestos Company Limited was incorporated in England in 1893.
According to an official government report of 1915, "the history of the asbestos industry in the Cape has been ... practically that of the Cape Asbestos Company." For over 50 years, Cape's crocidolite (blue asbestos) mine at Koegas and mill at Prieska in the Northern Cape Province provided employment for local residents. In 1925, Cape acquired the Penge amosite mine and mill in the Northern Transvaal. The company's factory in Benoni, near Johannesburg, manufactured asbestos products from 1940.
Although the corporate structure of the defendant's group was changed in 1948, the plaintiffs allege that control of the South African operations was exerted by the parent company which "knowing (so it is said) that exposure to asbestos was gravely injurious to health, failed to take proper steps to ensure that proper working practices were followed and proper safety precautions observed throughout the group. In this way, it is alleged, the defendant breached a duty of care which it owed to those working for its subsidiaries or living in the area of their operations (with the result that the plaintiffs thereby suffered personal injury and loss)."
Cupido Adams knows about Cape's working conditions. Like one in seven people from his hometown of Prieska, he has asbestosis. In his 72 years, he has watched his wife, parents and brothers die of the same disease.
The fact that he is ill comes as no surprise to Adams; he remembers all too clearly working with the deadly dust all day and every day. In the absence of protective gloves, he handled and sorted asbestos with his bare hands.
"The dust was everywhere," he says. "It lay up to an inch thick. There were no warnings, nothing. Children played in it. I lived half a kilometer from the factory but in order to drink I had to scrape a layer of asbestos off the top of my water jug."
In 1979, when Cape sold its South African operations and left its former workers to fend for themselves, no settlement was made, no trust set up, no medical scheme was put in place. Cape has not paid one rand in compensation to any of its South African workers even though it has made substantial payments to UK workers.
The company has not contributed to South African efforts to decontaminate the asbestos dumps, industrial sites and derelict mines it left behind. Levels of environmental pollution in some regions are colossal; 82 asbestos dumps in the Northern Cape have been identified.
Hendrik Naude, an official in the Department of Minerals and Energy, estimates that R100 million more will be needed to rehabilitate asbestos dumps. "I have no idea where we are going to get the money from; we are competing for money with essential sectors like housing, education and health," he says. Estimates that it will take 15 years to finish the task are unacceptable, he says. "This is too long ... every day that we wait is a day that someone may be exposed to danger."
All of this seems a far cry from the company's promises during its heyday.
In 1953, a publication issued on the occasion of Cape's Diamond Jubilee predicted a glowing future for its workforce. "Cape's achievement is no more and no less than the total contribution of every member of the company over these 60 years," it said. "Recognizing this fact [we] have seen to it that the first to benefit from prosperity, when it came, were the employees in mine and factory, laboratory and office, at home and abroad." The text stressed the "magnificent work done by the men and women in our mining establishments."
CAPE'S UK FACTORIES
At its peak, Cape's operations were worldwide and large enough to make it a major player in the asbestos industry. In the mid-1970s, the company boasted that it was "one of the principal producers of crocidolite and the world's chief producer of amosite asbestos." Cape and its subsidiaries had holdings in South Africa, Italy, France and Germany.
At Cape's facilities in London, Hebden Bridge, Uxbridge, Manchester, Glasgow, Newcastle, Liverpool, Belfast and the Isle of White, asbestos from its South African mines was turned into a wide range of products including asbestos yarn and cloth, millboard, webbing, insulation mattresses, pre-formed thermal insulation, sprayed asbestos thermal and acoustic insulation, filtration materials, asbestos cement flat sheets, corrugated sheets, pipes, molded products, slabs, packings and rope lagging.
Evidence has long existed that Cape's attitude to health and safety in its UK operations could be lax, even by the standards of the day. For example, the company's operations at its Barking, East London factory were considered to be particularly "dirty" (i.e. dusty), despite emerging evidence of the health consequences of asbestos exposure.
Extracts from 1929 reports by C. Leonard Williams, the medical officer of health for Barking Town Urban District Council, are illuminating: "the presence of asbestos dust in the lungs produces a definite disability � decreasing the expectation of life � that the conditions under which certain of these cases have been working have been such as to permit the inhalation of asbestos dust, with consequent pulmonary disability." That year, Williams reported three cases of asbestosis from the Barking factory.
Sixteen years later, he sadly reported, "I am firmly of the opinion [that] it [asbestos] is a deadly and dangerous commodity, and that unless those who are charged with the responsibility of safeguarding the health of the people in the industry can give positive assurances that they have now after all these years removed every possible danger, the processing of asbestos, except so far as its products are essential to the national economy, should be barred."
In 1965, a paper published in the British Journal of Industrial Medicine by M.L. Newhouse and H. Thompson documented the relationship between environmental exposure to asbestos and mesothelioma. "Mesothelioma of the Pleura and Peritoneum Following Exposure to Asbestos in the London Area" concluded that "among those with no evidence of occupational or domestic exposures, 30.6 percent of the mesothelioma patients and 7.6 percent of the in-patients with other diseases lived within half a mile of an asbestos factory." This factory belonged to Cape.
Long after information in the UK erased any doubts concerning asbestos hazards, Cape's South African workers continued to receive occupational and environmental exposures which have resulted in the levels of death and disease now being witnessed.
This double standard has generated a fury among health and safety campaigners and made the outcome of the jurisdictional dispute in the Cape case so critical.
"Globalization of the world economy must be accompanied by globalization of human rights," says Ngoaka Ramatlhodi, premier of the Northern Province, home to many of the asbestos plaintiffs.
The House of Lords' decision, Ramatlhodi and others hope, may perhaps herald a time when discredited processes and methods of production can no longer be transferred from industrialized to developing countries.
Laurie Kazen-Allen is the editor of the British Asbestos Newsletter, which has reported on asbestos issues for years.
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