sain t-gobain annu al report 2008 annual report

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In addition, as of December 31, 2008, 110 suits based on inexcusable
fault had been filed by current or former employees of
12 other French companies in the Group (excluding
Saint-Gobain Desjonquères and Saint-Gobain Vetrotex, which
have been sold), in particular involving circumstances where
equipment containing asbestos had been used to protect
against heat from furnaces.
At December 31, 2008, eight lawsuits had been abandoned
following the decision by the employees concerned to seek
compensation from the French Asbestos Victims
Compensation Fund (FIVA).
At that date, 64 lawsuits had been completed. In 12 of these
cases, the employer was held liable for inexcusable fault.
However, these rulings did not have any financial impact on
the companies concerned.
For the 38 suits outstanding at December 31, 2008, arguments
were being prepared by the French Social Security authorities
in four cases, 22 were pending before the Social Security
courts, ten before the Courts of Appeal and two before the
French Court of Cassation.
Asbestos-related litigation in the United States
In the United States, several companies that once manufactured
products containing asbestos such as asbestos-cement
pipes, roofing products, specialized insulation or gaskets, are
facing legal action from persons other than the employees or
former employees of the companies. The claims are based on
alleged exposure to the products, although in many instances
the claimants cannot demonstrate any specific exposure to
one or more products, or any specific illness or physical
disability. The vast majority of these claims are made simultaneously
against many other non-Group entities which 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 which had seen the greatest numbers of
claims in the previous years. This decline 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
settled out of court 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 the
State of 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 these claims
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 Certain-
Teed. 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 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 to €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 Certain-
Teed, including claims settled prior to 2008 but only paid out
in 2008, and those fully resolved and paid in 2008, 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.
Saint-Gobain – Financial Report 2008