This article was originally published in Insurance Day, November 2023.
Consumers are becoming increasingly prepared to hold large corporations accountable for their actions. A recent rise in PFAS-related claims led in the EU has raised questions as to whether the UK can expect to face similar litigation.
Growing concerns about the potential environmental and health risks linked to perfluoroalkyl and polyfluoroalkyl (PFAS) substances has led to an increase in lawsuits globally, particularly in the US where thousands of PFAS-related civil lawsuits have been filed.
A recent, notable rise in claims filed in the EU is now raising questions as to whether the UK can expect to face PFAS litigation.
PFAS, which are found in a variety of products including cosmetics, cookware and firefighting foam, are commonly referred to as “forever chemicals” because of their persistent environmental presence, with some reported to take more than 1,000 years to degrade.
In the US, claims – including class actions – have been filed against household names in the chemicals, beverage and cosmetics industries for losses alleged to have been caused by the presence of PFAS within their products and packaging. Compensation is often claimed in respect of personal injury and medical monitoring costs based on exposure to PFAS.
Claims have also been filed in respect of diminished property values because of the presence of PFAS in soil and water systems, and for the costs of remediating water and soil where PFAS have been detected.
In August, a number of multinational manufacturing companies were granted preliminary approvals for multibillion-dollar settlements of lawsuits arising from the alleged contamination of water systems caused by firefighting foam. Settlement funds will go towards filtering out PFAS from drinking water supplies across several US states.
Meanwhile in the EU in September, a class action lawsuit was led in the Hague, the Netherlands, against a US chemicals company and its parent company on behalf of 2,700 claimants. The lawsuit alleges PFAS contamination of soil, air and surface water from 1962 until now.
In separate proceedings, the same company was recently found liable for environmental damage caused by PFAS from 1984 to 1998, with the Rotterdam court ruling it should have better informed the towns of PFAS contamination.
The Netherlands has become a hotspot for collective actions because of its established class action framework, combined with global law firms having established Dutch offices to advance large-scale environmental litigation.
In contrast, in late 2022, a Swedish court ruled in favour of a chemicals company, finding high levels of PFAS in claimants’ bloodstreams does not constitute a physical injury. The decision demonstrates the importance of proving factual causation to establish liability.
In Australia in May, the Australian Federal Government settled a class action lawsuit in the sum of A$132.7 million. The lawsuit was brought on behalf of 30,000 claimants and concerned allegations of PFAS contamination from firefighting foam.
In terms of the outlook for the UK, there are no PFAS-related claims in the UK at present although the potential for litigation cannot be ruled out as consumers become increasingly prepared to hold corporations accountable for their actions. This is exemplified by recent high-profile environmental group litigation brought in the UK courts. Ongoing regulatory scrutiny may also encourage future claims.
PFAS claims could be brought on a number of grounds, ranging from statutory nuisance in respect of any allegations of environmental damage, to product liability where the presence of PFAS substances is alleged to render a product unsafe.
It is possible businesses may also be at risk of “greenwashing” litigation arising from allegations of misrepresentation or misinformation, for example, if a product containing PFAS has been promoted as “eco- friendly”.
Establishing legal causation and wrongdoing may, however, prove a significant roadblock. First, it may not be possible to trace the origin of PFAS in rivers or other public sources where PFAS have been present for several decades and where there are several entities who may be responsible, but some no longer exist.
Second, the discharge of industrial effluent may be permitted under certain statutory regimes.
Finally, only two PFAS chemicals (perfluorooctane sulfonate and perfluorooctanoic acid) have reached a level of scientific research where they are considered harmful enough to be placed under regulation.
Claimants must be able to establish a causative link between exposure to PFAS and their individual illnesses. Insurers have been incorporating PFAS-related exclusions in their policies for several years, particularly where their insureds may have a history of PFAS use within their products, or operate in an industry susceptible to its use.
As PFAS claims often involve allegations of contamination spanning multiple decades and against a number of different manufacturers, it is possible historical policies could respond to the risks alleged.
Insurers should assess whether, and to what extent, coverage under relevant historical policies may respond, and whether any exclusions apply, paying particular attention to policies providing coverage for environmental risk, product liability, general liability and employers liability.
To understand coverage risks, insurers should also keep abreast of the UK Health and Safety Executive’s (HSE) position on PFAS. In April 2023, the HSE published a report that makes recommendations, including potentially limiting the use of PFAS in certain products.
- PFAS: forever chemicals, forever causing concern?
- Balancing sustainability with health & safety
- Cosmetics regulation and risk management