George Broughton left the army in 1948 and returned to Sheffield with no qualifications and no idea what he was going to do. So he started work as a lagger with Darlington Insulation (now Cape Darlington) lining the pipes of Neepsend power station in Sheffield. "I'd mix between 20 and 40 bags of lagging a day," he recalls. "We'd empty the sacks straight out on to the floor, add the water and use a shovel to make a thick paste. There would be this dry dust everywhere. The air would be thick with it."

The insulation mix was mainly magnesia but one sixth was asbestos. "We were never told of the dangers of asbestos and we were never given protective overalls all the time I worked there," says Broughton. He stayed with the company for almost 25 years, becoming area supervisor. The first time he suspected that asbestos could be a killer was when a friend died of cancer in 1968.

At the end of last year Broughton, now 78, went to his GP because he was feeling breathless. His doctor prescribed a course of antibiotics but the complaint persisted and he was referred to a chest expert. Earlier in the year a CT scan revealed pleural plaques - internal scars on the lining of the lungs which can indicate asbestos exposure. They have no clinical symptoms but patients are frequently devastated to discover they have them because the condition is regarded as a possible precursor to asbestos-related cancer.

For Broughton the diagnosis was a blow, but it was no surprise. His wife, Maureen, 70, was diagnosed with a more serious asbestos-related condition three years ago and his 50-year-old son, John, found out that he had plaques five years ago. Maureen worked as a shorthand secretary and wages clerk at Darlington Insulation for 18 years and sat next to the depot where asbestos was stored. Throughout the day laggers would pass her desk carrying bags of asbestos. John, now a heating engineer, used to work for the company in his school holidays.

"Of course, I am worried for myself but that's nothing compared to what I feel for my family," Broughton says. "Asbestos was everywhere - and not just at work." Every day he would load up their estate car with sacks of asbestos to deliver to building sites. "It was the company car and permanently covered in a layer of asbestos," he says. "It was also the family car and we'd go everywhere in it."

In November, the court of appeal will consider a series of test cases where employers' insurers will argue that since pleural plaques have no symptoms there is no liability to pay compensation. It will be the industry's second attempt to strike out such claims in 12 months. Last March that argument, put forward by Norwich Union and Zurich plus the Department of Trade and Industry (on behalf of British Shipbuilders) failed to persuade the high court in Manchester. However, the insurers managed to get the damages slashed. Mr Justice Holland found that a diagnosis of pleural plaques in itself was not worthy of compensation but concluded that the anxiety associated with plaques plus the risk of contracting a more serious disease could qualify.

Adrian Budgen, a partner at the Sheffield office of law firm Irwin Mitchell, is advising the Broughton family. He has represented "dozens" of former workers of Darlington Insulation, some of whom have died of mesothelioma, the invariably terminal cancer caused by asbestos, in their 40s, and describes the insurer's challenge as "unforgivable".

"The conditions that people like George worked in at the power stations were shockingly awful and hundreds of people were exposed at any one time," he says. "The insurers have been paying out for 20 years without a murmur until last year, when they saw a peak in the number of cases coming their way." If these cases were about external scarring on the face there would be no issue about damages, he points out, adding that the Broughtons have been "scarred physically and mentally".

Anthony Coombs, of the Manchester law firm John Pickering & Co, which represented a number of claimants in the test case, reckons that a lagger who worked with asbestos has a one in 10 chance of being struck down by mesothelioma. "The disease has wiped out a generation of such men."

Dominic Clayden, head of technical claims at Norwich Union, says that plaques indicate that someone has possibly been exposed to asbestos but it could just as likely be sand or even talc. "The important distinction to make is that it is the exposure to asbestos that may lead to another condition, not the plaques themselves," he adds. But the insurers also see the plaques appeal as settling an important legal principle. "There is a risk that by compensating for anxiety this may apply to other issues, for example, mobile phone masts," Clayden says. Unsurprisingly, the industry is also mindful of the avalanche of asbestos claims in the US. Norwich Union reckons there could be as many as 100,000 such cases in the UK.

The appearance here of a distinctly US litigation phenomenon, the scan van, has reinforced a perception that asbestos claims could provide a rich new seam ready to be mined by claims companies and lawyers. In the United States, mobile clinics tour shopping malls and community centres in search of workers to screen and recruit to asbestos-related lawsuits. According to David Ross of Norwich Union, nine out of 10 asbestos cases in America are pleural plaques cases and mobile scans are the main way such claims are generated. "Claims company reps used to stop you in the high street with a clipboard and ask whether you've had an accident in the last three years," he says. "This is a more sophisticated way of filtering people."

Doctors are also concerned that people worried about a relatively minor condition such as plaques are inadvertently and ironically exposing themselves to real health risks. The Health Protection Agency says the risk of developing a fatal cancer as a result of a chest CT scan is one in 2,500, compared with a risk of one in a million from a chest x-ray.

"If you are picking up pleural plaques or an asbestos-related con-dition then screening workers with some form of scanning might be justified but it seems totally unjustifiable going around on fishing expeditions," says Dr Clive McGavin, consultant chest physician at Derriford Hospital in Plymouth. He has been contacted by a number of local dockyard workers who have been scanned and then come to him. He is also concerned that they are not being informed of the scan's health implications. "The radiologist who supervises the scan is responsible for explaining [the risk]," he says. "If your scan van is parked in Falmouth Dock and the radiologist is in the Brompton Hospital in London, how can that be happening?"

A spokesman for the British Lung Foundation reckons CT scans are roughly equivalent to 400 chest x-rays, although he adds "that is 400 times not very much". The BLF acknowledges that the diagnosis of plaques creates a great deal of anxiety and is worried that claims companies will do little to address those concerns. "Put it this way, I don't think the scan vans are there for the greater good of the working man," says the spokesman.

The Department of Health is investigating one claims company, Freeclaim IDC, based in Northumberland, to check it is in compliance with the Ionising Radiation (Medical Exposure) Regulations which impose requirements on such scans. "All procedures are in full accordance with all relevant regulations," Freeclaim says. "These procedures are supervised by senior and eminent consulting radiologists. We work in partnership with a private CT scanning company that provides CT and MRI services to the NHS and other health organisations." Flying across the Atlantic exposes a normal person to about the same dose as a CT scan of the chest, it claims.

"If you're concerned about your health go see a doctor. You don't see a lawyer and you don't see some unregulated claims farmer running a scan van in a hotel car-park," advises Ian McFall, who heads asbestos litigation for Thompsons solicitors, which represented union members in the high court. "If you think you have an industrial disease then contact your union and if you are not a union member go see an expert lawyer." McFall also points out that solicitors should be able to run such a case at no cost to the victims. "If someone has suffered an asbestos-related illness their case should not be used to line the pockets of middlemen."

So what do those diagnosed with plaques make of claims that their condition is not worthy of compensation? David Mears, a 62-year-old joiner who worked with asbestos on a building site in Hull in 1976, found he had pleural plaques in March 2002. "The first thing you think of is that it means cancer," recalls the father of three, whose case was one of the 10 test cases at the high court in Manchester. "It turned my life upside down. What troubles me is that a company can give someone an industrial disease and admit liability and then still be able to walk away."