- Asbestos-related litigation has been very active in France and represents a billion-dollar issue
- Recent case law has increased the financial risk related to asbestos by accepting the compensation of new heads of claims such as "anxiety damage"
- A recent statute was adopted to extend the time-limitation period for the submission of asbestos-related claims by the victims
- The national fund in charge of paying compensation to the victim – the FIVA – has made clear in its latest annual report that it will increase its subrogation effort against the victims' employers and their insurers
Asbestos has been widely use until the mid- 1970s. It however appeared that it was at the origin of a number of severe diseases.
The use of asbestos was gradually restricted and ultimately totally banned in France in 19971. Since then, the number of asbestosrelated disputes has exploded in France.
In order to deal with the large number of asbestos victims in France, a law dated 23 December 2000 has set up an asbestos victims’ compensation fund: the Fonds d’Indemnisation des Victimes de l’Amiante – FIVA.2
As a result, direct victims, irrespective of how they were exposed (through their work or the environment), or indirect victims (heirs and beneficiaries) can recover compensation for their injuries and losses from that fund, in addition to the benefits already received under the Social Security regimes.
Once FIVA has compensated the victims, it can initiate a subrogation recourse against the victims' employer and their insurers.
The victims are generally people who have been exposed to asbestos during the course of their work and who are covered by the occupational disease regime.
Asbestos victims may recover compensation in addition to pensions served by the Social Security (e.g. increased pension, and damages for personal harm such as pain and suffering, aesthetic damage and loss of amenity) and their heirs and beneficiaries may claim damages for their emotional distress if it is established that the disease was caused by inexcusable negligence on the part of the victim’s employer.3
Insurers’ exposure to the asbestos problem is severe since insurance coverage against inexcusable negligence of the employer, which was prohibited since 1946, has been permitted by a law of 27 January 1987 (now article L.452-4 of the Social Security Code).
Morever, the French Supreme Court, the Cour de Cassation, adopted a wide definition of the inexcusable negligence of the employer in asbestos-related cases in order to offer large compensation to the victims.
On 28 February 2002, the French Supreme Court handed down thirty judgments holding that “by virtue of the contract of employment with his employee, the employer has an absolute duty of safety to the employee, including with respect to occupational diseases contracted by the employee due to products made or used by the company; . . . breach of that duty qualifies as inexcusable negligence, within the meaning of Article L.451-1 of the Social Security Code, when the employer was or should have been aware of the danger to which the employee was exposed and did not take the necessary measures to protect him from it.”4
Since then, a finding of inexcusable negligence on the part of the employer is made almost systematically in matters relating to asbestos contamination.
Courts have increased the amount of damages that can be recovered as a result of exposure to asbestos
French courts have always placed themselves on the side of the victim.
The French Supreme Court and, very recently, the French Constitutional Court have further improved the legal means and the extent of compensation for victims or their heirs and beneficiaries.
First, the employer’s liability has been extended to third parties: the employer is liable when the employee’s kith and kin have been contaminated by asbestos dust5. Second, as a result of the judgments handed down on 28 February 2002, the heirs and beneficiaries of a deceased victim are entitled to sue for damages not only for “the emotional distress suffered by them personally because of the [victim’s] death” but also for the “victim’s personal emotional distress arising from his disease.”
Third, in a series of rulings made on 11 May 2010, the French Supreme Court recognised the existence of “anxiety damage” for employees that had worked for a company making or processing asbestos or materials containing asbestos. The French Supreme Court held that such employees “were, through the fault of the employer, in a permanent state of anxiety, faced with the risk of developing an asbestos-related disease at any time, and had to undergo regular medical tests and examinations likely to fuel that anxiety.”6
Employees can therefore claim compensation for "anxiety" and stress even though they did not developed bodily injury.
The French Constitutional Court joined in in extending the victim's right to compensation
The heads of compensable damage have been extended by the French Constitutional Court: victims may now claim for heads of damage other than those provided for in Article L.452-3 of the Social Security Code.7 In other words, the list of heads of damage enumerated in that article (pain and suffering, aesthetic damage, loss of amenity, and harm arising from loss or reduction of opportunities for job promotion) is no longer restrictive.
Victims may now seek compensation for any additional damage not indemnified by the Social Security.
The French Parliament adopted a law extending the time limitation applying to asbestos-related claims
In the Act of the financing of the Social Security published on 21 December 2010, the French Parliament extended the time limitation to file claims for asbestos related disease.8 Since then, the victims can file a claim within 10 years from the first day of the year following that of the discovery of the disease. The victims' heir can, on their side, file a claim for their personal moral damage within 10 years from the death of the victim.
The FIVA has made clear that it will increase its subrogation efforts against employers and their insurers
The systematic payment of compensation by the FIVA raises a funding problem, which could be lessened by pursuing the subrogation remedies available to them.
So far, because of a lack of human and financial resources, subrogation recoveries have been far short of the amounts paid.
In its latest annual report, the FIVA however indicated that it has set up a team of lawyers to sharply increase its subrogation recourses against employers and their insurers in a bid to save the public purse.
Facts and figures
- Since its creation in 2000, the FIVA has paid over 2.4 billion in compensation to asbestos victims (including €359m in 2009 alone)
- The FIVA made compensation offers to more than 51.000 victims or their heirs since it was set up
- In 2009, 891 victims filed their claims directly with French Courts. 13.4% of the asbestos victims made their claims in court rather that before the FIVA
- Subrogation recourses by the FIVA against employers and insurers represented €20m in 2008 and 2009. In 2009, the FIVA entertained 626 subrogation recourses. They are due to increase sharply
- Given the wide definition of the inexcusable negligence of the employer, these subrogation recourses are successful in over 80% of the cases, leaving most of the asbestos litigation cost to asbestos manufacturers and users and their insurers