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The shape of things to come.

Sometimes it seems like the insurance market has become the casualty insurance market. Most of the problems, interesting developments, legislative and regulatory matters, etc., in insurance appear to revolve around or seem to be aimed at some aspect of casualty insurance.

For example, it is beginning to look as though there will be a European Community-wide waste management policy in the not-too-distant future. Already, the EC Commission has published a revised proposal for a directive on civil liability for damage caused by waste, with a view to it being implemented by 1992.

The revised directive's aims reflect the EC Treaty's view on environmental policy: The environment should be protected by preventative action; environmental damage should be rectified at the source; and, most important in the context of the latest revisions to the directive, the polluter should pay. This last principle is why the latest draft of the directive includes a requirement that liability under the directive must be covered by insurance or some equivalent financial security. So, the polluter should pay" policy in the future will read the "polluter's insurer should pay."

The EC Commission is not merely giving a new and nasty twist to the treaty's "polluter should pay" principle. The idea is to overcome distortions in competition resulting from differing national liability laws in the EC and raise waste-disposal techniques.

Producers of waste-other than nuclear and oil pollution-will be held strictly liable for any damage they cause by its disposal. Moreover, the proposal extends to waste importers who are in control of waste when danger occurs-if the original producers cannot be identified-and are the final waste disposers.

All contingencies seem to have been considered. Waste producers will not escape even by giving the noxious substances to specialist waste-disposal companies.

The category of exposures covered by the directive are death or injury; property damage; and environmental damage, which suggests that environmental-protection groups might have a basis for civil actions under the new directive.

Some flexibility is allowed to member countries in deciding various aspects including what remedies will be available, but national legislation must allow injunctions to prevent more damage, and to order cleanups and compensation for damage and plaintiffs' costs.

Meanwhile, it is becoming clear that an export of American origin-structured settlements-has settled comfortably in the UK. It is so much a part of the UK's personal injury system that solicitors who do not inform their clients of the availability of structured settlements as an alternative to the conventional lump sum may, in the future, find themselves facing professional negligence actions. Such was the warning given by the secretary to the Association of Personal Injury Lawyers when the issue was discussed recently at a structured settlements conference.

The justification for the growing obsession with casualty matters is, of course, the ever-expanding range and size of casualty claims.

For instance, investigations are likely to start soon as to whether emissions from the Teeside plants of two large UK companies-ICI and British Steel-are capable of causing asthma. Epidemiological experts will also attempt to discover whether children in the area are being affected and, if so, to what extent.

Martin Day, a lawyer acting on behalf of 26 children from 15 families who have been granted legal-aid certificates with nil contributions, will have to wait about four months to determine from these preliminary investigations whether there is enough evidence to warrant continuing.

It is known that there is an abnormally high rate of asthma among children in the area. Some streets have an asthma victim in every household. The question is why?" British Steel and ICI both deny that there is any evidence that links emissions from their plants with the local incidence of respiratory illness.

Mr. Day, who is also involved in actions against the UK's Sellafield nuclear plant on behalf of children with leukemia, accepts that this case will be long and difficult. Even if it is possible to prove that emissions caused the asthma, the court still must be convinced that the companies should have foreseen the harm but failed to meet the government-set standards of the day.

In short, in the UK, it is still necessary to establish negligence. Mr. Day favors the introduction of strict liability in all pollution cases, which may arise one day but will not affect his case. The times, however, are a-changing. Chris F. Best is editor of Foresight, a London-based insurance and risk management journal published by Risk and Insurance Group Ltd.
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Title Annotation:London Perspective
Author:Best, Chris F.
Publication:Risk Management
Article Type:Column
Date:Nov 1, 1991
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