Paddington rail disaster: Insurance bill may reach £1bn
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Your support makes all the difference.COMPENSATION CLAIMS will form the bulk of a bill for the disaster which some estimates suggest could approach £1bn.
COMPENSATION CLAIMS will form the bulk of a bill for the disaster which some estimates suggest could approach £1bn.
Lawyers believe that the claims could prove especially high because many of the dead were travelling first-class and are likely to have been highly paid individuals with "key-man" insurance policies. Earnings are taken into account in assessing compensation claims.
Similar claims following the Southall crash, which caused the loss of seven lives, have so far led to payouts totalling £3m. The bill for the Southall disaster so far has reached £18m, a figure sure to be dwarfed by the cost of the Paddington crash.
Thames Trains and Great Western Trains, the companies involved, are both insured by St Paul International, a subsidiary of an American company. A spokesman said: "We don't enter insurance markets lightly and we would always research a market thoroughly beforehand so we can begin to understand the risk of disasters. We enter such markets with a long-term commitment."
This disaster may lead to attempts to secure convictions for corporate manslaughter. However, charges against GWT, which was blamed for the Southall crash, failed on the grounds that no "controlling mind" responsible for the crash could be identified.
The train companies are believed to be insured against loss of revenue while any service is suspended, but their accounts will not escape entirely unscathed. Financial penalties are likely to be meted out by the rail regulator: after the Southall crash, GWT was fined £1.5m.
The Paddington crash has wiped millions of £off the values of the companies involved. Shares in Go-Ahead, which owns Thames Trains, have tumbled by almost 16 per cent. Shares in GWT's owner, FirstGroup, are down more than 10 per cent. Railtrack saw £36m wiped off its value.
The industry is thought to have accepted its duty to pay for the introduction of the £1bn ATP safety system, which triggers the brakes when a train passes a red light.
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