See also: History of Asbestos Mining in South Africa
The Asbestos Relief Trust arose out of an out of court settlement agreement between various companies that had owned asbestos mines/mills in various provinces of South Africa, and several claimants who were ill with asbestos related diseases (ARD).
Summons were initially issued out of the High Court of South Africa, Witwatersrand Local Division in December 2001 on behalf of two plaintiffs, Visser and Dippenaar, represented by Richard Spoor of the law firm Ntuli Noble & Spoor of Nelspruit, against the Griqualand Exploration and Finance Company (Gefco). The claimants were claiming damages arising from occupational or environmental exposure to asbestos.
These summons were followed by several other summonses in 2002 against Gefco, General Mining Corporation (Gencor), Msauli, African Chrysotile Asbestos Limited (ACA) and Hanova Mining Holdings.
During the progress of the case, in about September 2002, Gencor announced that it would seek authorization at a general meeting of its shareholders to unbundle. In October 2002 an application opposing the unbundling was brought by several claimants. The aim of this application was to prevent Gencor from unbundling for fear that if it did this it would have a detrimental affect on their case (as Gencor was one of the defendants). If the claimants were successful they wanted to ensure that Gencor had the money to pay them out.
At the same time as this case was progressing several thousand South African claimants were in the process of concluding an action against a British company, Cape PLC, for damages arising from their employment at South African asbestos mines owned by this company. These mines were also mainly located in the Northern Cape and Mpumalanga/Limpopo provinces.
Due to the nature of mining and labour practices in South Africa at the time many of these Cape PLC claimants, represented by Leigh Day Solicitors of London, had also worked at Gencor/Gefco owned mines.
In the same month (October) an application was heard in the High Court of Justice of England, Queen’s Bench Division, for the summons in the Cape PLC case to be amended to include Gencor as a defendant. This was granted and subsequently an intervention application (in November) was brought in South Africa on behalf of the Cape PLC claimants to also intervene in the unbundling application brought by the Gencor claimants.
Essentially the Cape PLC claimants also wanted to secure some monies from Gencor should their action against them be successful.
The consequence of the unbundling application was that a settlement was reached with Gencor, Gefco, ACA, Msauli and Hanova Mining Limited on behalf of the claimants in the South African case and other interested parties, and the unbundling went ahead. The Trust was formed as a result of this agreement with its main purpose to compensate current and future potential claimants who worked for one of these companies or their subsidiaries, and who had an ARD.
At the same time the Cape PLC claimants also reached an agreement with Gencor whereby Gencor would contribute an amount to the total settlement amount that they had already agreed in their settlement negotiations with Cape PLC, which would cover any compensation that Cape PLC claimants with Gencor/Gefco exposure could claim against these latter companies.
A consequence of this agreement is that the Trust cannot pay any compensation to Cape PLC claimants, as Gencor had already contributed to the monies that they received. A list of these claimants was attached to the Settlement Agreement and before the Trust accepts any application, it checks whether that person appears on the “Cape List”.
The Settlement Agreement was signed in March 2003 and the Trust registered in the same month. There was however a condition in the Agreement which meant that the Trust was really only able to begin operating from end June 2003, which was that the Gencor unbundling would be completed by 30 June 2003.
For the first 6 months of the Trust coming into being (from June 2003) the Trust was not allowed to make any payments other than interim payments that were made on the basis of their urgency – all to asbestos cancer claimants. This was done to allow the Trust enough time to establish and prepare itself to receive and pay out claims.