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The Parliamentary Under-Secretary of State for Justice (Mr Crispin Blunt)
I apologise for the absence of the Under-Secretary of State for Justice, my hon. Friend the Member for Huntingdon (Mr Djanogly), to whom this debate would normally fall, but he is serving on the Committee that is considering the Defamation Bill. I congratulate the hon. Member for Sefton Central (Bill Esterson) on securing this timely debate. He asked wholly appropriate questions and I hope to be able to give him some of the satisfaction that he seeks, and some guidance for claimants and their families on the circumstances that we are in.
I say gently to the hon. Gentleman that I slightly regretted the tone of his speech. To suggest that concern about the issue is located on one side of the House and not the other is a little wide—
Mr Blunt
I will not, if my hon. Friend will forgive me, because I need time to put on record all the things that I think are important for mesothelioma sufferers, for whom concern is, very properly, universal.
Mesothelioma is a terrible disease. We recognise its devastating impact on sufferers and their families, and we take extremely seriously the plight of sufferers and their right to claim compensation for negligently caused personal injury. As was clear from the way in which the hon. Member for Sefton Central spoke, this is an emotive subject. This debate highlights the importance of the issue, and the hon. Member for Bolsover (Mr Skinner) also made that clear.
I will deal briefly with three main issues: first, why our reforms to conditional fee arrangements are the right way forward; secondly, why we are taking an exceptional course in respect of mesothelioma claims, and the circumstances in which that exceptional course will be managed once we have improved the position for sufferers who cannot trace their employer’s insurer; and, thirdly, how some reforms have lowered the barriers for claimants in recent years.
On the rationale for conditional fee arrangement reform, it is important to make it clear that our current legal aid reforms do not affect mesothelioma cases, as legal aid is not generally available. The Access to Justice Act 1999 removed legal aid for the majority of personal injury cases, including mesothelioma cases, where alternative forms of funding such as conditional fee arrangements were available. As the hon. Member for Sefton Central will be aware, the Government are implementing the recommendations in Lord Justice Jackson’s review of civil litigation costs, and particularly a fundamental reform of no win, no fee CFAs. Part 2 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 implements those reforms.
Lord Justice Jackson concluded that the current arrangements, under which success fees and after-the-event insurance premiums are payable by the losing side, in addition to standard legal costs, are a major contributor to the high costs of civil litigation, and that it was right in principle to change the arrangements across the board. The truth is that the current system is indefensible. It has turned out to be a racket for lawyers, which is why it is changing. The new system will assist the execution of meritorious claims rather than supporting a claims-management industry.
The Government are committed to addressing disproportionate costs throughout the whole of civil litigation, and the provisions in part 2 of the Act will deal with the unfairness that currently exists in the system between claimants and defendants. These important reforms will ensure that meritorious claims can still be pursued, but at a more proportionate cost. As part of the reforms, earlier settlement will be encouraged and damages for non-pecuniary loss, such as pain suffered and loss of amenity, will be increased by 10%. In time, the reforms will apply to all areas of civil litigation—that was what Lord Justice Jackson recommended, and the Government agree.
The Government are certainly not suggesting that mesothelioma claims are brought inappropriately. Indeed, such claims are often among the easiest in which to establish base merit. I want to be absolutely clear, in response to the tone of the remarks made by the hon. Member for Sefton Central, that these claims are, of course, not part of the compensation culture—no one has suggested that they are. They are, however, part of a process of civil litigation that has to be reformed.
On the temporary exception from conditional fee arrangement reforms for mesothelioma claims, we announced that the relevant provisions in part 2 will come into force in April 2013. In particular, sections 44 and 46 abolish the recoverability of success fees and after-the-event insurance costs from the losing side in all categories of case in which they are currently used. We are, however, deferring implementation in relation to mesothelioma claims until we are satisfied on the way forward for those who are unable to trace their employer’s insurer. I am sure that the hon. Gentleman understands the crucial importance of that.
A number of reforms in recent years have improved the position of mesothelioma sufferers by lowering the barriers to bringing claims. In particular, the Employers’ Liability Tracing Office, which was introduced in April 2011, is designed to be a comprehensive online resource of current and historical employers’ liability policies, thus making it easier for claimants to find the relevant insurer. The database is updated with the results of any new traces, so its size and utility continue to increase. We recognise, however, that there remains a gap where sufferers cannot trace their employer’s insurer. The Department for Work and Pensions is therefore in discussions about the way forward for stakeholders. Primary legislation might be required, but I anticipate that my noble friend Lord Freud, who is working on the matter, will make a statement before the summer recess. If primary legislation is required, however, the hon. Member for Sefton Central and other hon. Members will understand that that will take a considerable period of time.
I can give a commitment that we will consider all the factors raised today when we come to set out the review’s terms of reference. I cannot, however, set out those terms of reference or a timetable, because any review may not happen until we have identified any primary legislation that might be required. Additionally—the hon. Gentleman made this point, and it has also been made by the right hon. Member for Tooting (Sadiq Khan)—that means that the review will occur against the backdrop of a substantially changed conditional fee arrangement market, so we will of course consider the effect of those changes as part of the review.
I have rather more to say, but I regret that I will not be able to do so, given that, understandably, the hon. Gentleman took interventions during his speech. Nevertheless, I have put on the record the substantive responses that he was seeking from the Government.