sain t-gobain annu al report 2008 annual report

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or any specific illness or physical disability. The vast majority
of these claims are made simultaneously against many other
non-Group entities that have been manufacturers, distributors,
installers or users of products containing asbestos.
Developments in 2008
After three years marked by high numbers of claims filed
against CertainTeed (60,000 in 2001, 67,000 in 2002,
and 62,000 in 2003, compared with 19,000 in 2000),
new claims filed fell to 18,000 in 2004, and subsequently
dropped to 17,000 in 2005, to 7,000 in 2006, to 6,000 in 2007
and to about 5,000 in 2008. This decline was felt over the last
four years in most States, particularly in those that had seen
the greatest numbers of claims in the previous years. It reflects
State court rulings as well as changes in local legislation
in various States to introduce stricter medical criteria
for new claims.
Almost all of the claims against CertainTeed are settled out
of court. Approximately 8,000 of the pending claims were
resolved in 2008, compared with 54,000 in 2003, 20,000
in 2004 and in 2005, 12,000 in 2006 and 8,000 in 2007.
In addition, approximately 3,000 claims (mainly in New York)
were transferred to “inactive dockets” further to court rulings.
Taking into account the 74,000 outstanding claims at the end
of 2007 and the new claims having arisen during the year,
as well as claims settled or placed in inactive docket,
some 68,000 claims were outstanding at December 31, 2008.
A large number of these pending claims were filed more
than five years ago by individuals without any significant
asbestos-related impairment, and it is likely that many of them
ultimately will be dismissed.
Impact on the Group’s accounts
The Group recorded a €75 million charge in 2008 to cover
future developments in relation to claims involving
CertainTeed. This amount is slightly lower than the €90
million recorded in 2007, the €95 million recorded in 2006,
the €100 million recorded in 2005, the €108 million recorded
in 2004, and the €100 million recorded in both 2002 and 2003.
At December 31, 2008, the Group reserve for asbestos-related
claims against CertainTeed in the United States amounted
to €361 million, (USD 502 million), compared with €321 million
(USD 473 million) at December 31, 2007 and €342 million
(USD 451 million) at December 31, 2006.
Cash flow impact
Compensation paid in respect of these claims against
CertainTeed, including claims settled in prior years but only
paid out in 2008, and those fully resolved and paid during
the year, and compensation paid (net of insurance) in 2008
by other Group businesses in connection with asbestos-related
litigation, amounted to €48 million (USD 71 million), compared
to €53 million (USD 73 million) in 2007, and €67 million
(USD 84 million) in 2006
Outlook for 2009
No significant developments have been observed during
the past few months, in terms of either new claims
or compensation paid.
In Brazil, former Group employees suffering
from asbestos-related occupational illness are offered
either exclusively financial compensation or lifetime medical
assistance combined with financial compensation.
Only a small number of asbestos-related lawsuits
were outstanding at December 31, 2008, and they do not
represent a material risk for the companies concerned.
Ruling by the European Commission following
the investigation into the construction glass
and automotive glass industries
In November 2007 and 2008, the European Commission
issued its decisions concerning, respectively, the construction
glass industry and the automotive glass industry.
*
In the November 28, 2007 decision concerning its investigation
into construction glass manufacturers, the European
Commission held that Saint-Gobain Glass France had violated
Article 81 of the Treaty of Rome and fined the company
€133.9 million. Compagnie de Saint-Gobain was named
as being jointly and severally liable for the payment of this
amount. Compagnie de Saint-Gobain and Saint-Gobain Glass
France decided not to appeal this decision and the fine
was paid on March 3, 2008.
In the November 12, 2008 decision concerning
its investigation into automotive glass manufacturers,
the European Commission held that Saint-Gobain Glass
France, Saint-Gobain Sekurit France and Saint-Gobain Sekurit
Deutschland GmbH had violated Article 81 of the Treaty
of Rome and fined them €896 million. Compagnie
de Saint-Gobain was named as being jointly and severally
liable for the payment of this amount.
The companies concerned believe the fine is excessive
and disproportionate, and have appealed the decision before
the Court of First Instance of the European Communities.
The European Commission has granted them a stay
of payment until the appeal has been heard, in exchange for
a bond covering the €896 million fine and the related interest,
Saint-Gobain - 2008 Annual Report