LONDON (Alliance News) - Industrial services company Cape PLC on Wednesday said it has increased the provision on its books to cover industrial disease claims following recent judgements made in the UK.
Cape said a Court Approved Scheme of Arrangement was created in 2006 to administer the settlement of valid claims made against the company related to historic asbestos activities. Cape said over GBP30.0 million had been paid to those who became ill or to their dependants since the scheme was set up.
However, the scheme and Cape are now subject to new developments and types of claim, one of which has been filed by insurer Aviva seeking to establish contribution and indemnity claims against the company. The claims related to employee liability settlements made in response to claims Aviva underwrote for a liquidated Cape subsidiary covering the period from 1956 to 1966.
Court hearings on the new claims have been held, and the judgements made were mixed, with some going in Cape's favour and some not. Cape is seeking to appeal some aspects of the litigation but said it will make a GBP9.7 million increase to the provision held against these industrial disease claims.
Due to this increase in the provision, Cape said it intends to make a further GBP9.0 million payment by the end of 2016 to the ring-fenced scheme to meet its funding requirements.
The judgements received are separate from a second type of claim being jointly pursued by Aviva and RSA Insurance in respect of historical and current payments made by the insurers as providers of employee liability insurance. Cape said it continues to believe these claims are "without merit" and is "vigorously" defending itself.
Shares in Cape were down 4.7% to 188.00 pence Wednesday.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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