Statement re asbestos issues
Smiths Group PLC
14 December 2001
Statement by Smiths Group on asbestos-related issues
Recognising recent publicity surrounding certain other companies'
asbestos-related litigation in the US, Smiths Group plc wishes to clarify its
own position and to explain why it continues to believe that the group has no
material liability in this respect.
A US subsidiary of Smiths Group, John Crane, Inc. ('John Crane'), is one of
many co-defendants in numerous law suits pending in the US in which plaintiffs
are claiming damages arising from exposure to or use of products containing
asbestos.
The John Crane products generally referred to in these cases are industrial
gasket and packing products in which the asbestos was encapsulated in binders
and fillers. Tests conducted on behalf of John Crane have found that the
products were safe because the asbestos fibres were encapsulated in such a
manner that there would have been no release of any harmful amount of
respirable fibres into the atmosphere. John Crane ceased manufacturing
products containing asbestos in 1985.
With the benefit of this 'safe product' defence, John Crane believes that the
cases are without merit and has resisted every case in which it is named. This
distinguishes John Crane from the majority of defendants, who have not
followed its practice of vigorously resisting every claim. All material costs
of defending these claims are fully met by insurance.
As a result of this policy, John Crane has been dismissed before trial from
cases involving approximately 71,000 claimants over more than the last 20
years. John Crane is currently a defendant in cases involving approximately
140,000 claims, of which approximately 30,000 have been filed so far this
year, which represents an acceleration in filings that has also been
experienced by other companies. Despite these large numbers of claims, John
Crane has had final judgements against it, after appeals, in only 14 cases,
amounting to awards of some $10 million, over that 20 year period. These
awards, the related interest and all material defence costs have been met in
full by John Crane's insurance.
John Crane intends to continue the robust defence of asbestos-related claims.
Smiths Group believes that the total insurance available to John Crane is
sufficient to meet the awards and material costs arising from current and
other anticipated cases. Accordingly, Smiths Group continues to hold the view
that the litigation has not required, and does not require, any provision to
be made in the group's accounts, which are audited by PricewaterhouseCoopers,
and does not represent a material contingent liability. An update on this
subject will appear in the annual accounts in future.
-Ends-
Russell Plumley
Tel: 020 8457 8203
russell.plumley@smiths-group.com
Latest directors dealings
- 55 minutes ago Galliford Try
- 1 hour ago Galliford Try
- 1 hour ago Centrica
- 1 hour ago Smith & Nephew
- 2 hours ago Greencoat UK Wind