Insights / Environmental liability

Pollution and PFAS Claims

Pollution and PFAS Claims Overview

PFAS, known as "forever chemicals," have led to lawsuits initially targeting big manufacturers like 3M and DuPont. Now, these lawsuits are extending to downstream players such as restaurants and food suppliers, focusing on pollution and personal injury claims.

Determining causation is challenging because PFAS is ubiquitous, and the science is still developing without a clear "signature disease" like asbestos.

Regional Updates: Netherlands and UK

In the Netherlands, PFAS contamination has become a significant issue. Since 2023, court rulings have deemed emissions unlawful, leading to lawsuits from fishermen and the Dutch state against 3M for polluting the Western Scheldt.

In the UK, early group claims are emerging in North Yorkshire related to firefighting foam. However, the situation is still in its early stages, with regulations lagging behind the extensive PFAS chemical landscape.

Industry Impact and Trends

Beyond the chemical giants, various industries, including carpets, plastics, and even companies like Amazon, are being implicated in PFAS lawsuits. Examples include pizza boxes and wristbands, along with false advertising claims over "organic" labels.

Coverage disputes are intensifying as older insurance policies lack pollution exclusions, leaving insurers to determine liability and the timing of injuries.

Canada and US Developments

In Canada, the situation is complicated by ownership changes and policy confusion, making it difficult to determine insurance coverage. This could delay liability discussions for years, reminiscent of tobacco litigation.

The US is deeply entangled in PFAS issues, with multidistrict litigation ongoing. With 98% of people having PFAS in their blood, the scale of litigation is expected to surpass asbestos, involving numerous targets and billion-dollar settlements.

Litigation Funding Insights

Litigation funding is a substantial $39 billion industry, with funders quickly investing in lawsuits. However, the lack of transparency raises concerns about who is profiting, such as hedge funds or foreign entities.

The UK and Canada are also experiencing growth in litigation funding, particularly in class actions. However, challenges include Supreme Court rulings and high-interest loans that significantly reduce settlement amounts.

Social Inflation Concerns

The US is experiencing "social inflation," where anti-corporate sentiments lead to exorbitant jury awards, such as the $2 billion verdict against Johnson & Johnson. This trend is increasing settlement costs even in defensible cases.

While the UK has not reached this level, it is moving towards significant environmental and consumer class actions. Canada is anticipating a conservative shift that may reduce claim values amid trade challenges.