Controversy over compensation for victims of asbestos

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Compensation for people suffering illness as a result of asbestos exposure at work has been in the headlines in 2003, with disagreement over the level of compensation to be paid by a newly created Fund for the Compensation of Asbestos Victims (FIVA). The Fund aims to provide full compensation to asbestos victims, following an asbestos-related early retirement scheme introduced in 1999. In 2003 it adopted a scale of compensation payments much lower than awards made by the courts, bringing protests from trade unions and victims' organisations.

The use of asbestos was banned in France as recently as 1997, but its effects persist. According to the National Institute for Health and Medical Research (Institut national de la santé et de la recherche médicale, INSERM), there are now 800 cases of mesothelioma (a specific form of lung cancer related to asbestos) and 1,200 of asbestos-related bronchial-pulmonary cancers per year, and these figures are rising. Estimates place deaths from these forms of cancer at between 100,000 and 150,000 by 2020.

Asbestos-related early retirement scheme

As an initial stage in compensating people affected by asbestos at work, the social security funding law for 1999 (adopted in December 1998) established an 'early retirement scheme for asbestos workers' (cessation anticipée d’activité des travailleurs de l’amiant, CAATA), which is open :

  • from the age of 50 to people with an asbestos-related illness officially-recognised as an occupational illness; and
  • from the age of 50 at the earliest to past and present employees exposed to asbestos in specific workplaces, occupations and ports and at specific periods - in the production and processing of materials containing asbestos, asbestos flocking and lagging (specific workplaces), shipbuilding and repairs (specific occupations), and professional dockers and port staff involved in handling cargo (specific ports). Retirement age is calculated by subtracting one third of the exposure period from 60.

Some industries in which asbestos was heavily used (eg garages, forges and foundries, steel, ceramics and electrical household equipment), as well as maintenance staff, are still excluded from the scheme.

The benefit under the early retirement scheme is worth 65% of previous gross pay, and is payable until the recipient can retire on a full pension. It is paid out by the Asbestos Workers Early Retirement Fund (Fonds de cessation anticipée d'activité des travailleurs de l’amiante, FCAATA), created in 1999. This fund is financed through a state contribution and a payment from the work-related accident and occupational illness sections of the National Employed Workers' Sickness Insurance Fund (Caisse nationale d'assurance maladie des travailleurs salariés, CNAMTS). It is managed by a board comprised of state representatives, those organisations with seats on the CNAMTS work-related accidents and occupational illness committee and leading figures in the area.

Compensation fund established

Since the mid-1990s, there has been an increase in the number of court case aimed at establishing employers’ 'inexcusable negligence' in exposing their workers to asbestos and thus obtaining full compensation for damages suffered (FR0204105F). However, these procedures are time-consuming, complex and costly, with the majority of the asbestos-related cancer victims dying before their conclusion and, furthermore, inexcusable negligence actions are not open to either non-waged victims or civil servants.

In this context, a Fund for the Compensation of Asbestos Victims (Fonds d’indemnisation des victimes de l’amiante, FIVA) was set up under the social security funding law for 2001 (FR0011104F), with the aim of ensuring full compensation for the damages related to asbestos exposure, whether occupational or otherwise, experienced by employees and their next-of-kin. A full compensation allowance is paid out as a top-up to any payment made by, among others, the social security schemes. FIVA allows victims to avoid court proceedings. Each victim receives a compensation proposal for all the areas of harm recognised by the courts. If the victim accepts the proposal, rights to a court case are waived in favour of FIVA. The latter may then sue the person(s) responsible, especially in the case of employers, for inexcusable negligence. FIVA is funded mainly by a state contribution and a payment from the social security schemes for work-related accident and occupational illness. FIVA’s budget, which is approved on an annual basis, is theoretically unlimited.

FIVA’s board was established only in April 2002. It has 22 members, made up of:

  • five representatives of the state;
  • eight representatives of organisations with seats on the CNAMTS work-related accidents and occupational illness committee. This means, in principle, the Movement of French Enterprises (Mouvement des entreprises de France, MEDEF), the General Confederation of Small and Medium-sized Enterprises (Confédération générale des petites et moyennes entreprises, CGPME) and the Craftwork Employers' Association (Union professionnelle artisanale, UPA) on the employers’ side. On the trade union side, the organisations are the General Confederation of Labour (Confédération générale du travail, CGT), the French Democratic Confederation of Labour (Confédération française démocratique du travail, CFDT), the General Confederation of Labour-Force ouvrière (Confédération générale du travail-Force ouvrière, CGT-FO), the French Christian Workers' Confederation (Confédération française des travailleurs chrétiens, CFTC) and the French Confederation of Professional and Managerial Staff-General Confederation of Professional and Managerial Staff (Confédération française de l'encadrement-Confédération générale des cadres, CFE-CGC);
  • four suitably-qualified figures, including the director of CNAMTS and a member of the General Social Affairs Inspectorate (Inspection générale des affaires sociales, IGAS);
  • four members nominated by national non-governmental organisations (NGOs) supporting the victims of asbestos-related illness; and
  • a judge, who chairs the board.

However, in October 2001 MEDEF and CGPME withdrew from the boards of the national social security funds, including that of CNAMTS, to protest against the way in which the statutory 35-hour week was being funded (FR0012109N and FR0111104N). They were thus absent from FIVA’s board when it was set up.

Disagreement over compensation payment scale

With regard to the amount of compensation to be paid out by FIVA, the views of state and employers' representatives differed from those of NGOs and trade unions. The government representatives prioritised solutions minimising the amount of compensation. They advocated the adoption of a compensation scale established by the insurance companies and widely thought to be unfavourable to the victims, instead of the usual social security scale, which was backed (though with amendments) by the unions and NGOs. The NGO and union representatives agreed to a set of joint proposals.

On 22 November 2002, the board agreed on the FIVA 'medical scale' (which assigns a level of incapacity to each victim) on the basis of proposals from the NGOs and unions. However, the proposal from the NGOs and unions for the 'compensation scale' (a specific amount for each physical, economic and personal harm suffered), based on the averages of awards made by courts in asbestos cases, was not agreed, with the state representatives suggesting much lower sums.

On 12 December 2002, the Ministry of Social Affairs used a decree to provide for the participation of MEDEF and CGPME on FIVA’s board. The board meeting on 20 December, which was to vote on the compensation sums to be awarded, was unable to reach a majority decision on either of the two plans tabled. On 20 January 2003, the day before the next board meeting, the chair proposed a compromise, which was rejected by the five trade unions and the National Association for the Defence of Asbestos Victims (Association nationale de défense des victimes de l’amiante, ANDEVA), the principal victims’ organisation. On 21 January 2003, however, the board passed by 11 votes to 10 a compensation scale much lower than the average of the sums awarded by the courts. Thus 65-year olds with mesothelioma should receive EUR 100,000, while unions and NGOs were asking for EUR 170,000, and the courts awarding an average of EUR 200,000 to EUR 220,000. People suffering from patches on their lungs will receive EUR 13,900, compared with the EUR 24,400 claimed by the unions and NGOs.

Reactions

The trade unions and NGOs reacted vehemently and unanimously to the board's decision, deeming the compensation rates adopted to be deeply inadequate. They argued that the appointment of MEDEF and CGPME representatives had been illegal and aimed solely at obtaining a majority in order to obtain poor rates of compensation. Unions and NGOs filed motions seeking to overturn the decision with the Council of State (Conseil d'Etat) and the Paris administrative court. The unions protested not so much at the presence of the employers as the fact that they are participating in FIVA although they are still boycotting the other sickness insurance bodies.

In the absence of negotiations, unions and NGOs have condemned what they label a 'takeover by force'. For ANDEVA, the scales adopted by FIVA are half the average sums received in the courts, and a quarter of the maximum amounts. It fears that the courts will now fall into line with these lower amounts. ANDEVA has therefore called on those victims that can do so to continue to initiate inexcusable negligence cases in the courts, and on those who opt for FIVA to file systematically appeals for the level of compensation to be raised.

The social affairs minister, François Fillon, however, feels that the scale adopted involves high levels of compensation and concentrates efforts on the most serious damages. He stressed that the scale is only indicative, and that damages will be tailored to individual cases.

Commentary

In 2003, asbestos - through occupational illness payments, FIVA, and the FCAATA scheme - will account for an estimated 13%-15% of the total expenditure of the work-related accidents and occupational illness social security funds (estimated at EUR 8.7 billion as of 2003). This is a serious source of imbalance.

The asbestos tragedy has shown the limits and inappropriateness of the legislation relating to work-related accidents and occupational illness. Victims of work-related exposure are the only ones to be compensated on a flat-rate basis, on the basis of principles established by an 1898 law. A reform is now indispensable for establishing full compensation, as well as obliging employers to instigate genuine preventative policies. Other similar cases are now surfacing, involving glycol ethers, ceramic powders, phyto-sanitary products and bitumen fumes (FR0009189N). (Annie Jolivet, IRES)

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