Corrected: INSIGHT-Damages for Grenfell fire victims may total just $5 mln - Reuters analysis

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19/10/2017 16:02

(Corrects to make clear Tasnim Belkadi's aunt did not respond 
to requests for comment, rather than declined to comment) 
    * UK law limits claims to value of lost income or property 
    * High number of elderly and child victims reduces claims 
    * UK law doesn't allow U.S.-style punitive damages 
 
    By Tom Bergin 
    LONDON, Oct 18 (Reuters) - The bill for compensating 
families of those who died in the Grenfell Tower fire in London 
may be as low as 4 million pounds ($5 million), according to 
several lawyers and a Reuters analysis of how damages laws apply 
in England. 
    The blaze engulfed a 24-storey social housing block in west 
London on June 14, killing an estimated 80 people in the 
country's deadliest fire since World War Two. 
    While similar disasters in the United States have led to 
massive payouts, any compensation for Grenfell would be far 
lower because English laws offer less generous damages and don't 
allow punitive claims, even if companies are found criminally 
responsible, said Brett Dixon, president of the Association of 
Personal Injury Lawyers (APIL). 
    The four main firms that have been linked to the Grenfell 
fire - U.S. companies Arconic Inc.  ARNC.N  and Whirlpool Corp. 
 WHR.N  and Britain's Harley Facades and Rydon Group - declined 
to comment on the size or calculation of potential payouts. 
    The Reuters calculation of a bill of 4 million pounds is 
based on the compensation amounts stipulated in the Fatal 
Accidents Act of 1976, precedents set in previous cases and the 
individual circumstances of the 70 victims identified so far. 
    Three personal injury lawyers have verified the methodology 
used by Reuters and said the estimate for the total payout is 
reasonable. 
    If the courts find there was no unlawful behaviour by any of 
the companies or public bodies involved, victims will not be 
entitled to sue for compensation and would only get the 
financial support and temporary housing already provided by the 
government and public donations, personal injury lawyers said. 
    "The British judicial system is not renowned for being 
generous," said Rebecca Thomas of law firm Duncan Lewis, which 
is representing some victims' families. 
    "It's not about money for the families," said Tim Murphy, 
whose brother Denis, a disabled former painter who lived on the 
14th floor, died in the fire. "Nothing can ease our pain, (but) 
I think it's quite insulting." 
    The U.S. legal system sees punitive damages as a way of 
encouraging companies to behave lawfully, but British and 
European governments have taken the view this approach would put 
excessive burdens on the judicial system, businesses, insurers 
and state bodies that might be liable, some legal experts say. 
    While APIL said the Grenfell Tower disaster demonstrated the 
inadequacy of payouts to victims, Duncan Fairgrieve, who has 
advised the UK government on compensation rules, said more 
generous payouts could also harm society. 
    They could drive up insurance costs for all and lead to big 
claims against government bodies such as the National Health 
Service and the police, he said. 
    "There is an affordability issue," said Fairgrieve, a Senior 
Research Fellow at the British Institute of International and 
Comparative Law. 
     
    FEW DEPENDENTS 
    If the courts find someone was wrongfully killed, the claim 
categories are a flat 12,980 pounds per victim for bereavement, 
costs such as funeral bills, dependency damages where minors or 
dependent spouses are left behind, and property damage - all to 
be paid by the party found responsible. 
    Under the 1976 law, only family members who were supported 
by those who died can claim dependency damages. Reuters has 
identified only five people who died leaving dependents who 
could definitely claim damages - on the basis they were 
financially dependent on the deceased. 
    Daniel Machover, a lawyer at Hickman and Rose, which is 
representing some victims' families, also said he didn't expect 
there to be many claims. 
    Most of the others who died in the fire were minors, single 
or elderly and did not leave family members who were financially 
dependent upon them. 
    The biggest dependency payout will be for children who lost 
both parents, said lawyers representing some of the victims. 
    One six-year-old girl, Tasnim Belkadi, lost her mother, 
father and all her siblings in the fire. 
    Lawyers said she could get 300,000 pounds, based on a share 
of her parents' income and some childcare costs up to her 18th 
birthday. Her aunt, with whom she now lives, did not respond to 
requests for comment on the Reuters calculation. 
    Grenfell plaintiffs can also claim expenses they incurred as 
the result of a death, such as the cost of a modest funeral. 
    Heirs to the deceased could also claim the value of goods 
lost in the fire. The Association of British Insurers puts the 
cost of replacing the contents of an average three-bedroom home 
at 55,000 pounds. 
    However, Thomas said Grenfell claims would probably be less 
than 30,000 pounds per property because compensation is based on 
the market value of personal belongings rather than replacement 
value, and the flats destroyed had only one or two bedrooms. 
    Based on the victims' circumstances, Reuters has calculated 
the payout for dependency damages could be 1.2 million pounds, 
for property it could be 1.4 million and for bereavement it 
could come to 1.0 million. Other smaller claims for costs and 
loss of parental guidance take the total to 4 million pounds. 
     
    TENS OF MILLIONS 
    Police said the fire started in a fridge freezer made by a 
subsidiary of U.S. company Whirlpool and have been investigating 
whether the tower's cladding, made by U.S. firm Arconic Inc., 
played a role in the spread of the blaze. 
    Arconic said it was up to contractors to ensure its products 
were used correctly. Whirlpool said it was investigating the 
fire. 
    Rydon Group, the contractor that oversaw the refurbishment 
when the new cladding was added, said it had complied with all 
regulations. Sub-contractor Harley Facades Ltd said it was not 
aware of any link between the fire and the cladding. 
    Fears among investors that companies linked to Grenfell 
could be sued for large sums in the United States hit their 
shares. Whirlpool's market value fell about $250 million on June 
23 when police identified the maker of the appliance as 
Hotpoint, a brand owned by Indesit, which is a subsidiary of 
Whirlpool based in Italy.  urn:newsml:reuters.com:*:nL8N1JK1PF 
    More than $1 billion was wiped off Arconic Inc.'s value 
after Reuters reported in June that internal emails showed it 
had supplied flammable cladding panels, knowing they would be 
used on the tower and despite warning in its brochures that only 
non-combustible panels should be used on tall buildings. 
 urn:newsml:reuters.com:*:nL8N1JL07D 
    Arconic's share price has recovered since its late June lows 
but it and Whirlpool's stock are below the levels they were at 
just before the fire, while the Dow Jones Industrial Average 
 .DJI  has climbed 7 percent over the same period. 
    Awards against companies in U.S. courts have run into the 
tens of millions of dollars per family in some cases. 
    In 1980, a fire blamed in part on inadequate fire safety 
measures killed 85 people at the MGM Grand Hotel in Nevada and 
injured hundreds. The hotel operator and contractors agreed to 
pay victims' families and survivors more than $200 million. 
    Foreigners have often tried to sue U.S. corporations in U.S. 
courts over alleged wrongdoing abroad. 
    However, judges have consistently ruled they lacked 
jurisdiction in such cases, saying adequate tribunals existed in 
the plaintiff's own country and that it would be hard for 
defendants to make their case in the United States. 
    Machover at Hickman and Rose said he was considering whether 
Grenfell victims could bring a U.S. case on the basis that two 
of the companies involved were based there. 
    But Thomas at Duncan Lewis and Leigh Day partner Jill 
Paterson were sceptical that U.S. courts would agree to hear 
Grenfell claims given the United Kingdom offers a reasonable 
forum for redress and because the U.S. companies were involved 
through European-registered subsidiaries. 
    "I can't see any circumstances under which they could bring 
this in the United States," said Thomas. 
    Arconic and Whirlpool declined to comment on the possibility 
of legal claims against them. 
 
 (Additional reporting by Carolyn Cohn; editing by David Clarke) 
 ((tom.bergin@thomsonreuters.com; +44 207 542 1029; Reuters 
Messaging: tom.bergin.thomsonreuters.com@reuters.net)) 
 
Keywords: BRITAIN FIRE/COMPENSATION (CORRECTED, INSIGHT, PIX