An asbestos settlement of $500 million on the part of the nation’s largest property and casualty carriers has been overturned on appeal by a New York judge. The settlement, which was intended to resolve some 600,000 asbestos claims against Johns-Manville, a company insured by Travelers, was originally sought in 2004 and granted in 2006. The settlement would have made $445 million available to the claimants while providing nearly $60 million for the coverage of legal fees, and would have barred all future asbestos claims against Travelers. That settlement has now been overturned by a federal appeals court. In making his decision, the appellate judge determined that the court making the original decision on granting the settlement did not in fact have proper jurisdiction in the matter. As a result, Travelers could be open to new lawsuits by asbestos victims. Lawyers for the Minneapolis-based insurance company are now evaluating the recent ruling for the purpose of deciding whether or not to pursue further action to restore the terms of the settlement.
Representatives of Travelers have stated that the company has no intention of increasing the amount it has in reserve for settling asbestos claims, nor any immediate plans to challenge the appeal. Company spokespersons also said that they did not expect the recent appeal to affect company profits; in fact, on the day following the ruling, shares of Travelers were trading on the NYSE at approximately one percent higher than the day before. Regarding the appeal and overturning of the settlement, a company representative made the following statement: “[Traveler’s Casualty and Company] would have preferred the finality afforded by the settlements and related injunction… however, the asbestos litigation environment has improved generally over the past several years. As a result, Travelers’ current outlook for the … litigation is more favorable than it was when Travelers entered into the settlements. If the Second Circuit’s decision becomes final, the settlements will become voided and Travelers intends to litigate the direct action cases vigorously.”