Over 1,500 people who suffered chemical burns and allergic reactions after buying ‘toxic sofas’ are to share a compensation settlement worth £20 million, in what is thought to be the largest consumer class action in English legal history.

Several thousand people in the UK developed health problems as a result of contact with their new furniture and some have been left with permanent scars. It took several months to identify the cause of the problem, however. The sofas, which were imported from China, contained a sachet of a fungicide called dimethyl fumarate (DMF) in order to stop the leather from going mouldy when it was stored in humid conditions. DMF can evaporate when the conditions are warm and soak through the upholstery to the skin. Up to 100,000 sofas containing DMF were sold in the UK. Products containing the fungicide have now effectively been banned by the European Commission and the furniture removed from the market.

The High Court was told that a ‘claims handling agreement’ had been reached by the insurers of the Home Retail Group (which owns Argos and Homebase), the high street furnishing chain Walmsley’s and some smaller companies, thus paving the way for compensation claims made by those who suffered less severe injuries to be settled. Each victim is expected to receive between £1,175 and £9,000 in compensation and legal fees.

There is to be a further hearing to consider claims relating to 3,000 more serious cases.

The High Court earlier ruled that more than 300 people who suffered burns and allergic reactions from contact with sofas purchased from Land of Leather were not entitled to compensation. The company went into administration in January 2009 and its insurers, Zurich, successfully argued that it had breached ‘fundamental terms’ of its insurance policy. This decision is likely to be appealed, however.

Click here for further information on product liability.

Click here for information on your rights relating to faulty goods.