HUNDREDS of asbestos victims were yesterday facing uncertainty over compensation payouts after an insurance company called in provisional liquidators, lawyers said.

Law firm Thompsons is handling hundreds of asbestos-related claims and fears at least half could be affected by the fate of Chester Street Insurance Holdings.

Ian McFall, of Thompsons' Newcastle office, said: "What has happened is scandalous."

The uncertainty affects workers whose bosses were insured by the old Iron Trades Employers Association Ltd before 1990.

It stopped taking on new employers' liability business that year and much of its business was sold to QBE International, in February last year.

However, pre-1990 employer liability business was switched to Chester Street Insurance Holdings, which said earlier this month that it has appointed provisional liquidators