US class action sought in chemical case
UK insurers will have to pay out millions in compensation claims if potential class actions brought against US manufacturers of a wood preservative are successful.
It is alleged that chromated copper arsenate (CCA), which is used to treat wooden playground equipment, increases the cancer rate of children who have prolonged exposure to it.
A recent attempt to bring a class action against three leading CCA manufacturers in Louisiana failed.
But this has not deterred other plaintiffs who are now attempting to bring class actions in New Jersey and Texas.
A leading US lawyer said if class actions were successful, the wood preservative manufacturing industry could end up paying millions in compensation.
Some US manufacturers of CCA, such as Chemical Specialties Inc (CSI), are covered by UK insurers. Royal & Sun Alliance (R&SA), Zurich, New Hampshire, AXA and CGU have insured CSI "for all sums which CSI shall become legally liable to pay as damages or compensation consequent upon personal injury or property damage".
CSI is currently suing its legal expenses insurers, including R&SA, Zurich, New Hampshire, AXA and CGU in a $4.7m (£2.5m) dispute relating to defending claims relating to CCA.
CSI said the insurers had agreed to indemnify the company against legal costs.
R&SA would not comment on the case.
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