Mesothelioma Bill [HL]

Lord Avebury Excerpts

Monday 20th May 2013 Lords Chamber

[Lord Avebury]

My Lords, perhaps I may begin by mildly disagreeing with the noble Lord, Lord Howarth. The Minister is in excellent company because he has built on the work done by the noble Lord, Lord McKenzie, and I thank both of them for their excellent work, for the processes which have led up to this Bill and for the actual construction of the Bill by the Minister. We owe them an enormous debt of gratitude for what has been an extremely long and arduous task.

The Bill allows the victims of this horrible disease, contracted as the result of working in environments that contained asbestos many years ago, to recover compensation even if the former employer, through whose negligence the patient was exposed to the asbestos, has gone out of business and the employer’s liability insurance, which would have covered a claim against the employer, cannot be traced. This is partly because the insurers irresponsibly destroyed policies taken out by firms that went bust, even though it was known right from the start of employers’ liability insurance in 1972 that mesothelioma has a very long latency period. A pamphlet entitled Asbestos Kills by Nancy Tait, which I published in 1976, quoted evidence going back to the 1930s to show that asbestos causes a wide range of diseases and that some of them have a latency period of as long as 30 or 40 years after exposure. There is absolutely no excuse whatever for what is now being euphemistically termed “market failure”.

The Minister referred to work being undertaken by the Ministry of Justice on a range of measures, which include a pre-action protocol, and several noble Lords have referred to the work being done by Senior Master Whitaker. Will the Ministry of Justice examine that work carefully because the administration of these mesothelioma cases by Senior Master Whitaker, his practice direction and his use of the “show cause procedure”—whereby once a claimant has established that he was exposed to asbestos in breach of the employer’s duty, the evidential burden shifts to the defendant to produce evidence to demonstrate that it has a real prospect of success in its defence—have been major causes of accelerating the progress of these cases through the courts. Rather than having a pre-action protocol, I wonder whether it might not be best to allocate a special court for the conduct of these cases, where the experience and wisdom of Senior Master Whitaker could be developed and extended to other judges.

Of course, the scheme does not go as far as the Asbestos Victims Support Groups Forum UK would have liked. I shall refer to two of its main concerns. It was unfortunate that the forum was not invited to any of the consultations held over the two-year period during which the scheme was being negotiated, and I would be grateful if the Minister could explain why the forum was not allowed to have its say. As I am sure he knows, the forum would have preferred a scheme like the one that applies to the motor accident victims of uninsured drivers. Representatives of the forum say, as every noble Lord who has spoken so far has also remarked, that it was wrong to apply the scheme only from 25 July 2012. As has been mentioned, it was a purely arbitrary date, although I imagine that that would have meant squeezing more money out of the insurance industry. The Government have decided to go for the best settlement they could get the industry to agree to voluntarily, and inevitably that was bound to be less than perfect.

The same applies to the 30% reduction, which, again, all noble Lords have condemned, from the average compensation paid to claimants of the same age who can identify the relevant employers’ liability policy. It is not clear how the 30% figure was determined, although I understand that it was intended to be a disincentive to claimants opting for this scheme when they could have identified the insurer and made a claim accordingly. I agree with the noble Lord, Lord McKenzie, who said that this was manifestly absurd—those were not the exact words he used, but that was their meaning—because the claimant who is unable to pinpoint the relevant insurer has no option but to apply to the Employers’ Liability Tracing Office, whose remit is to conduct the search, so the matter is entirely in its hands. A litigant cannot enter the scheme without ELTO being involved, a point to which I shall come back later.

I turn to the Bill itself. I do not believe that the scheme should be left to the unfettered discretion of the Secretary of State, as my noble friend Lord German has already said, but rather that it should be subject to approval by Parliament, as should any amendment, replacement or abolition of it. I have a couple of questions for the Minister. In Clause 2, is the definition of “relevant employer” intended to make a claim possible against any pre-1972 employer on whose premises it can be shown that there was asbestos? Is negligence to be assumed in these cases, irrespective of the circumstances in which the victim now finds himself? How can you establish negligence when the employer has gone out of business and there is no direct evidence of what he was doing in the period before 1972?

In Clause 4(2), is the age referred to the age at the date of diagnosis or the age when the claim was submitted? They may not always be the same. In Clause 4(3)(a) in what circumstances is it envisaged that conditions would be applied to the payment? I was advised that what may be in mind is a situation where the payment falls to be made to the trustees of a dependant who is a child or mentally disabled, but if that is the case, should that not be spelt out in the Bill rather than allowing the Secretary of State to impose any conditions whatever at his absolute discretion?

It is just a small point, but Clauses 11 and 12 appear to be superfluous because they merely repeat parts of what is already in the schedules. On Clause 13, the Government have found it necessary to defend themselves against the potential criticism of the levy as an infringement of the property rights of the insurers under Article 1 Protocol 1 of the ECHR. One would have thought that securing the agreement of the Association of British Insurers to the scheme would protect it against litigation by an individual insurer. One of the factors which they say is relevant in considering whether transferring to the insurance industry the cost of remedying the market failure to keep adequate records is that the compensation is limited to a percentage of the amount that would have been payable if the records had existed. In order to remedy this market failure comprehensively and restore mesothelioma victims to the position they would have occupied if the insurance records had existed, the figure would, of course, have had to be 100%. Would my noble friend consider aiming for a lower reduction—as all noble Lords who have spoken so far have recommended—than the planned 30%, preferably with the industry agreeing to an increase in the levy to fund the difference? I am advised that the Financial Services Compensation Scheme pays 90% compensation in a situation where the negligent employer is no longer trading and where the insurance company for the defunct company is also no longer trading. The FSCS is authorised by the Financial Conduct Authority and, so far as the asbestos-related disease claims are concerned, FSCS coverage is not limited to mesothelioma. Is this not a model for the scheme that is to be launched under this Bill?

Mesothelioma is an excruciatingly painful disease, and the struggle to get fair compensation for those who are struck down by it has been excruciatingly slow, having taken 40 years so far. As my noble friend Lord German said, the Bill is a milestone, but it is not the end of the road either for the beneficiaries of this scheme or for those who suffer from other asbestos-related diseases.