Notes to the Interim Report & Accounts
(unaudited)
16 Contingent liabilities
John Crane, Inc. ('JCI'), a subsidiary of the Company, is one of many co-defendants 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.
JCI has resisted every case in which it has been named and will continue its robust defence of all asbestos-related claims based upon this 'safe product' defence. As a result of its defence policy, JCI has been dismissed before trial from cases involving approximately 156,000 claims over the last 29 years. JCI is currently a defendant in cases involving approximately 138,000 claims. Despite this large number, JCI has had final judgments against it, after appeals, in only 67 cases, amounting to awards of some US$60.5m over the 29 year period.
Whilst this represents a very low proportion of claims that has historically resulted in final judgment against JCI, the incidence of such judgments in the future cannot be meaningfully estimated and the scale of future awards is accordingly unquantifiable and therefore no provision is made for any future awards. As explained in note 15, a provision for the legal costs of defending asbestos claims has been established.
In common with many other enterprises of similar size, the Company and its subsidiaries are from time to time engaged in litigation in respect of a variety of commercial issues.