sain t-gobain annu al report 2008 annual report

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, 10 before the Courts of Appeal and two before the
Supreme Court.
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 their employees
or former employees. 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 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
CertainTeed recorded a €75 million charge in 2008 to cover
future developments in relation to asbestos claims.
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 reserve for asbestos-related claims
in the United States recorded in CertainTeed’s accounts
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 Certain-
Teed, 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.
NOTES THE PARENT COMPANY FINANCIAL STATMENTS
211
Saint-Gobain – Financial Report 2008