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Cape/Gencor lawsuits (re So. Africa)
Author: Business & Human Rights Resource Centre, Published on: 18 February 2014
In 1997, a group of five South Africans suffering from asbestos-related disease (ARD) brought suit against Cape PLC in the English High Court seeking compensation for their injuries from Cape’s asbestos mining and milling activity in South Africa. The plaintiffs, former Cape workers and individuals living in the vicinity of Cape’s operations, alleged that Cape exposed its workers to 30 times the British legal limit of asbestos dust without adequate protective gear and that asbestos related injuries were suffered by those living near Cape’s asbestos operations. After the claim was filed, Cape applied to stay these claims on forum non conveniens grounds, arguing that the case should be tried in South Africa. At the beginning of 1998, Cape’s application was granted by the trial court, but the Court of Appeals later reversed the lower court’s decision. In 1999, another 2000 claims were commenced against Cape in England for ARD based on Cape’s activity in South Africa. Cape reapplied to stay these new claims, in addition to those filed in 1997, and Cape’s application was granted. On appeal, the Court of Appeals affirmed the lower court’s ruling. The plaintiffs then appealed to the UK House of Lords, and in 2000 the Law Lords held that the case should be allowed to continue in the English High Court. The Law Lords found that South African courts would not be a viable alternative forum because legal aid in South Africa had been withdrawn for personal injury claims and no reasonable likelihood existed for the plaintiffs to acquire effective legal representation on a contingency fee basis for a case of such complexity. After the House of Lords decision, more claimants joined the case, and by 2001 there were approximately 7500 claimants. In 2001, Cape agreed to a £21 million out-of-court settlement with the plaintiffs, but the company encountered financial problems in August 2002 and did not meet the agreed settlement terms. Therefore, the litigation recommenced in September 2002, and Gencor Ltd. was joined as a defendant in the case. Gencor is a South African company which took over some of Cape’s South African asbestos operations when Cape left the country in 1979.
In 2003, the plaintiffs, Cape and Gencor reached a settlement agreement. There were three parts to the settlement. First, Gencor established and now administers a £35 million trust in South Africa (the trust is to compensate ARD victims in South Africa who were not represented by Leigh Day & Co.). Second, Cape settled with its 7500 claimants for £7.5 million. Third, Gencor settled with the 7500 claimants for approximately £3 million.
- [PDF] “Cape plc: South African Mineworkers' Quest for Justice”, Richard Meeran [counsel for plaintiffs], International Journal of Occupational Environmental Health, Jul/Sep 2003
- Action for Southern Africa: “Cape Caves in on South African Asbestos Case”, 13 Mar 2003
- Cape PLC: Cape Annual Report 2003 [scroll to page 47, item 26(ii) for discussion of 2003 settlement]
- Leigh Day & Co. (plaintiffs’ counsel): South African Asbestos Victims Finally Get Their Money, 30 Jun 2003
- Thompsons Solicitors (counsel for claimants suing Gencor): Landmark Settlement Brings Justice for Thousands of SA Former Asbestos Miners, 13 Mar 2003
- UK House of Lords: Judgments - Schalk Willem Burger Lubbe (Suing as Administrator of the Estate of Rachel Jacoba Lubbe) and 4 Others and Cape Plc. and Related Appeals, 20 July 2000 [House of Lords decision]