The United States has witnessed a surge in litigation related to perfluoroalkyl and polyfluoroalkyl substances (PFAS), often called “forever chemicals” due to their persistence in the environment. PFAS, a group of synthetic chemicals used in a variety of products like water and stain repellents, lubricants, packaging, electronics, and fire-fighting foams, have come under scrutiny for potential environmental and health risks.
Recent high-profile lawsuits in the US have led many states to impose restrictions on PFAS usage. For instance, Minnesota has empowered state agencies to ban PFAS in numerous products, including food packaging and consumer items such as carpets, rugs, and cosmetics. The US Environmental Protection Agency has also set legally enforceable drinking water limits for some of the most hazardous PFAS compounds.
Globally, the momentum is growing. Increased activity by consumer groups and regulators suggests more PFAS-related litigation in the United Kingdom and beyond, targeting manufacturers, retailers, and supply chain entities. Businesses in the UK and the European Union (EU) must consider how their insurance policies address these emerging risks.
Recent Actions by UK and EU Regulators
In April 2023, the UK’s Health and Safety Executive (HSE) published a report detailing PFAS usage in the UK and recommending restrictions on PFAS in foams, textiles, furniture, and cleaning products. The UK REACH regulations, which apply to most chemical substances manufactured or imported into Britain, currently restrict PFOA (perfluorooctanoic acid) and its salts, as well as perfluorinated silane substances. Following the HSE report, PFAS have been added to the UK REACH Rolling Action Plan, indicating potential forthcoming restrictions.
Additionally, UK regulations on persistent organic pollutants (POPs) have banned PFHxS (perfluorohexanesulfonic acid). Violations of POP regulations, including the production, sale, or use of banned substances like PFOS and PFOA, constitute strict liability offences, potentially leading to fines, imprisonment, or both for responsible individuals and corporations.
The EU’s PFAS legislation includes restrictions on PFOS, PFOA, and PFHxS, with further limitations expected following a joint proposal by Denmark, Germany, Norway, Sweden, and the Netherlands aiming for a blanket ban on approximately 15,000 PFAS chemicals. The proposal, currently under consultation, may result in a final decision by the European Commission in 2025, potentially giving companies up to 12 years to transition to alternatives.
The Spread of Litigation
PFAS-related litigation in the US has grown significantly over the past decade, with consumer class action lawsuits against manufacturers of dental floss, feminine hygiene products, cosmetics, and waterproof fabrics containing PFAS. Similar litigation targets other alleged contaminants like benzene in dry shampoo, titanium dioxide in cosmetics, and microplastics in water bottles.
In Europe, PFAS-related litigation is anticipated to rise. A notable case in Belgium resulted in a €571 million settlement after high PFAS levels were detected in local residents’ bloodstreams due to contamination by a manufacturing plant. In the Netherlands, Dutch municipalities have sued a chemical manufacturer for damages from alleged PFAS soil contamination.
In the UK, PFAS-related claims and group actions are expected to increase, potentially involving personal injury, product liability, property damage, and statutory nuisance allegations. Even licensed industrial effluent discharges could face legal challenges over alleged health and environmental risks.
Identifying Potentially Responsive Insurance Policies
Businesses should review their insurance policies for coverage against PFAS-related claims and liabilities. Relevant policies may include:
Public Liability or Commercial Liability Insurance: Covers third-party property damage or bodily injury from business operations, typically on a “losses occurring” basis, triggering liability when illness manifests.
Employers’ Liability Insurance: Mandatory in the UK, covering bodily injury or disease sustained by employees during their employment, even if symptoms appear later.
Product Liability Insurance: Protects against third-party property damage or personal injury caused by a product, including contamination from the insured’s product.
Environmental Liability Insurance: Covers environmental or pollution risks, including contamination from industrial or manufacturing facilities.
Practical Tips to Enhance Coverage
Corporate policyholders should take several steps when facing PFAS or other alleged contaminant claims:
Prompt Notification to Insurers: Provide written notice of any incident likely to result in a claim as soon as possible to facilitate coverage access for pre-litigation costs.
Early Coverage Assessment: Consult experienced coverage lawyers to identify responsive policies and address potential coverage
issues early on.
Collate and Preserve Relevant Documents: Ensure documentation is located and preserved to meet insurer and third-party claimant requests.
Defence of Claims: Negotiate with insurers to appoint experienced lawyers who prioritize the policyholder’s interests.
Negotiate Policy Terms: Proactively address liability insurance terms at renewal, seeking extensive coverage and negotiating exclusions related to pollution or PFAS claims.
Our lawyers can help businesses prepare for and defend third-party claims while pursuing coverage for defence costs and additional liabilities. This proactive approach is crucial in the evolving landscape of emerging alleged contaminant claims.
