Cape plc Industrial Disease Claim - Litigation Update (6652E)
July 20 2016 - 2:00AM
UK Regulatory
TIDMCIU
RNS Number : 6652E
Cape plc
20 July 2016
News Release
20 July 2016
Industrial Disease Claim ("IDC") - Litigation Update
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
In 2006 a Court Approved Scheme of Arrangement ("Scheme") was
established to administer the settlement of valid claims against
Cape relating to its historical asbestos activities, whilst at the
same time protecting the company from the potential threat of
insolvency. The Scheme has operated very effectively; Cape has met
its obligations to fund the Scheme and valid claims have been paid
out without reduction. To date, over GBP30m has been paid to those
who have become ill or to their dependents.
As previously disclosed, Cape and the Scheme are subject to new
developments and new types of claim as legal precedent in the area
of industrial disease claims continues to evolve. Aviva has brought
one such new type of claim, seeking to establish contribution and
indemnity claims ("Insurer EL Claims") from Cape towards employee
liability settlements that it has made in response to policies that
Aviva underwrote for a liquidated Cape subsidiary during the period
1956 to 1966 and for which Aviva has already benefited from the
associated insurance premiums.
There has been a sequence of court hearings culminating in a
determinant judgment on 19(th) July 2016, with some issues found in
favour of Cape and some against. Cape is seeking leave to appeal a
number of aspects of this litigation. Nevertheless the Board
believes it to be prudent to increase the provision held against
industrial disease claims by GBP9.7m to take account of the current
judgment. This provision represents the Board's best estimate,
based on the current information available to it, of both the
liability relating to the Insurer EL Claims currently being brought
by Aviva and the discounted present value of potential future
claims of a similar nature, using the same actuarial and economic
assumptions as disclosed in the 2015 Report and Accounts (Note
28).
Given the increase in the provision, and subject to the outcome
of any appeal, the Company currently intends to make an additional
payment of approximately GBP9m by 31(st) December 2016 into the
ring-fenced Scheme Fund in order to meet the funding requirements
of the Scheme. This will permit the Company to continue to make
dividend payments without recourse to the Scheme trustees.
This judgment is separate from a second type of new claim being
pursued jointly by Aviva and RSA in respect of historical and
current payments made by them in their capacity as providers of
employer liability insurance in relation to claims by employees and
former employees of third-party companies arising from
asbestos-related diseases ("Insurer PL Claims"). The Board
continues to believe that these Insurer PL claims are without
merit, are being vigorously defended and no provision has been
made. Further details have been previously disclosed in the 2015
Report and Accounts (Note 35).
Details of the Cape Scheme have been filed with the Registrar of
Companies and can also be found on the Cape plc website
http://www.capeplc.com/corporate-responsibility/asbestos-scheme-of-arrangement.aspx.
A summary of the key aspects of the Scheme can be found in the 2015
Annual Report and Accounts (Note 36).
About Cape:
Cape (www.capeplc.com), which is premium listed on the main
market of the London Stock Exchange, is an international leader in
the provision of critical industrial services principally to the
energy and natural resources sectors. Our multi-disciplinary
service offering includes access systems, insulation, specialist
coatings, passive fire protection, refractory linings,
environmental services, oil and gas storage tanks and heat
exchanger replacement and refurbishment. Cape employs over 16,000
people working across 21 countries and in 2015 reported adjusted
revenue of GBP711.4 million.
- End -
Conference call
The Group will host a conference call for analysts and investors
at 8am today, Wednesday 20(th) July.
The participant dial in details are as follows:
UK +44 (0)208 118 1016
Conference Code: 4809558386
Enquiries
Cape plc
Joe Oatley, Chief Executive +44 (0) 1895 459 979
Michael Speakman, Chief Financial Officer +44 (0) 1895 459 979
Ronan Tyrrell, Interim Head of Investor Relations +44 (0) 1895 459 979
Buchanan
Bobby Morse, Ben Romney, Chris Judd +44 (0) 207 466 5000
This information is provided by RNS
The company news service from the London Stock Exchange
END
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