Notes to the accounts
25 Contingent liabilities and commitments
John Crane, Inc.
As stated in note 23, John Crane, Inc. “JCI”) is involved in numerous law suits pending in the United States in which plaintiffs are claiming damages arising from exposure to, or use of, products containing asbestos. The JCI products generally referred to in these cases are ones in which the asbestos fibres were encapsulated in such a manner that, according to tests conducted on behalf of JCI, the products were safe. JCI ceased manufacturing products containing asbestos in 1985.
Provision has been made for the cost of adverse judgements expected to occur. The Group anticipates that asbestos litigation will continue beyond the period covered by this provision; however, because of the uncertainty surrounding the outcome of litigation beyond this period, the cost of adverse judgments cannot be reliably estimated.
Other contingent liabilities and commitments
At 31 July 2008, contingent liabilities, comprising bonds and guarantees arising in the normal course of business, amounted to £75m (2007: £88m).
The Group is currently co-operating with the relevant authorities in investigating certain allegations of improper business conduct. Based on the work completed to date, these are not expected to give rise to any material financial exposure.
The Parent Company has arranged two letters of credit to support the Group’s pension plans, one for £100.0m and one for £50.0m. At 31 July 2008, total usage of the two facilities was £124.9m (2007: £132.8m).