Insurance implications from a major Monsanto case

Insurance implications from a major Monsanto case | Insurance Business Australia

Legal Insights

Insurance implications from a major Monsanto case

Could the verdict have significant repercussions?

Legal Insights

By
Daniel Wood

In July, a Federal Court judge ruled on a major test case involving global chemical giant, Monsanto. Insurance Business is looking into some of the insurance implications.

The class action by Maurice Blackburn Lawyers involved more than 800 plaintiffs suffering from the cancer, non-Hodgkin lymphoma (NHL). They argued the cancer was linked to exposure to Monsanto’s glyphosate-based products including Roundup because, they alleged, these formulations are carcinogenic. 

In a judgement that set out complex evidence from both sides across more than 300 pages, Justice Michael Lee dismissed the case. Justice Lee found it was not proven, “on the balance of probabilities” that the use of or exposure to these Monsanto products “increased an individual’s risk of developing NHL or caused it.”

“Good news” for Monsanto and its insurer

“This company [Monsanto] succeeded on this preliminary point and that’s good news for the company and its insurer,” said Ross Donaldson (pictured above), Melbourne-based partner with global law firm Clyde & Co.

Donaldson has more than 35 years of experience in liability and insurance law. He was impressed by how the Judge and the court handled this complex class action with insurance implications.

“You can see the care to which this judge has applied the facts and the scientific material to his determination,” said Donaldson. “I think at least companies and insurers would believe that they have got a fair hearing in claims of this kind.”

The Clyde & Co expert said this Monsanto case was “essentially a product liability claim.”

“So the insurers of a company that sells products, or an insurer that insures a company that sells products, will be relieved that the company has succeeded and there’ll be no claims for compensation,” said Donaldson.

Class actions linked to product liability claims

However, he said it’s another example of how companies with product liability claims “these days” can face class actions.

“Whereas previously, an individual plaintiff probably couldn’t afford or hadn’t the time to run such an action,” he said, “now that you’ve got law firms that specialise in class action proceedings, they can marshal together all the relevant plaintiffs who allegedly have suffered loss and damage and bring this proceeding on their behalf.”

He encouraged insurers to be aware of this increased risk.

“The companies and their insurers have to factor in that sort of risk going forward and make sure they have adequate liability, insurance and reinsurance if necessary,” said Donaldson.

How will the evidence look in the years to come?

IB asked about the future of this legal battle against Monsanto. Apart from in Australia, the firm has fought similar cases in the US and other jurisdictions. How likely is it that in years down the track, much like the evidence linking tobacco to cancer, the evidence linking Roundup and glyphosate to NHL becomes overwhelming?

“You just don’t know,” said Donaldson. “Obviously, there were connections shown with tobacco and all sorts of other products over the decades but you don’t really know in this case.”

He referred to the links between asbestos and asbestosis.

“I think it was pretty well established, quite early, that there was a strong causal connection between exposure and asbestosis the disease,” said Donaldson. “But this [Monsanto case] is a lot more complex, I think, in regard to causation.”

According to a news report, the lead plaintiff in this Australian Monsanto case was exposed to glyphosate over a period of 20 years.

He said most of the plaintiffs in the case were exposed to Roundup through work in the agricultural sector, others used the weed killer domestically around their properties.

McNickle was first diagnosed with NHL in 2018. He underwent chemotherapy and radiation treatment before going into remission in 2019.

The 40-year-old, who lives in Queensland, was diagnosed with NHL a second time, in 2023.

Are you an insurance professional in the agriculture sector? How do you see this Monsanto case? Please tell us below.

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