Mesothelioma Bill [HL]

Lord German Excerpts

Monday 20th May 2013 Lords Chamber

[Lord German]

My Lords, first, I congratulate my noble friend the Minister on bringing the Bill forward in this form today. If noble Lords read the response to the consultation from the insurance industry, they will see an almost opposite view to that expressed within the Bill. I congratulate my noble friend on turning the British insurance industry around to support this Bill. It builds on a voluntary code and the consultation. I also echo the tribute to the noble Lord, Lord McKenzie, who has been steadfast in bringing these matters forward. I see this as a continuation of his work.

There are issues where this Bill needs questioning and we need to develop our understanding further. However, the other important factor resulting from this Bill is that the process will be speeded up. Where a civil process now takes perhaps two years, we should see a much more speedy process in place for all claimants of around four to five months when it is put together. That is the ambition of this Bill and the opportunity that arises from the portal.

Unfortunately, we need this Bill for a longer period. It may have a finite lifespan but that may be 30 years or even more. The British Lung Foundation suggests 30 years but it may well be that this Bill needs to be in place longer. For that reason, it is important that Parliament maintains its connection with the scheme. There will undoubtedly be inevitable changes and tweaks over the coming decades as the scheme beds in and the initial detail on the implementation will require careful scrutiny to minimise the potential for future change and to maximise certainty as far as possible. Therefore, it is a little strange to see that Clause 1 makes no reference to Parliament when we know that there is much detail still to be determined. I hope that my noble friend Lady Thomas’s Delegated Legislation Committee will be able to report on this matter before we reach the later stages of the Bill.

There are some scoping issues which need discussion. First, there is the date of implementation. It is inevitable that some sufferers and their dependants will fall outside the timeframe for involvement in the scheme. We have already heard that from the noble Lord, Lord McKenzie, and my noble friend the Minister. I understand, of course, that the insurance industry had to be brought onboard with these proposals and it was essential to attain its commitment to the funding levy. However, with average claims coming in at £150,000 plus costs, it is a bitter blow to those who may fall just outside the dateline for the new scheme. I would be grateful if my noble friend the Minister could inform your Lordships’ House of the balance of issues which led to the choice of 25 July 2012 as the starting date for this new scheme. It is, of course, the date on which the Government announced their intentions in respect of the scheme but that in turn was more than two years after the department’s consultation had ended.

I listened very carefully to my noble friend’s explanation about other diseases and I very much appreciate that mesothelioma is a unique disease that has a long tail and is virtually always fatal but there are some similarities with other industrial diseases, not least pneumoconiosis. This scheme could therefore act as a model for others. Indeed, the Association of British Insurers said:

“If it proves successful then the Secretary of State can make provisions to extend it to look at other disease types”.

Does my noble friend the Minister support that view, and can he give an indication as to whether a new scheme would require primary legislation?

The second issue referred to is the 70% threshold. We need to understand how this figure has been arrived at. Why is it not 75% or 80%? I understand the need for a tariff-based system, but surely this would keep the incentive to go through the solvent employer/known insurance route even if it was higher. There is a curious statement from the Association of British Insurers on why this level was set:

“As the payments will be made based on a straightforward tariff, some people will receive more compensation under the scheme than they would have received in civil compensation, and the aim is to set the tariff at a level that means this will only happen in a small number of cases”.

This indicates that the overall level of the tariff in the proposed scheme, expressed as a percentage of civil claims, will always be set at a level where very few claimants will get more than a civil claim. Would it not have been better and fairer to raise the percentage value but to put a cap on the amount which would have kept it at or below a civil-system payment? I am told that the current average payment under the existing system is in the range of £150,000 plus costs. A 70% tariff will mean that the average payment under the proposed scheme will be £105,000 to £108,000. Surely that is far more of a differential than what is required simply to avoid claimants taking this new scheme course, rather than following the solvent-employer or known-insurer route?

There are some issues relating to legal matters. Although my noble friend the Minister said that they were not interdependent, they are closely related. Two of them involve information that noble Lords might need at this stage. One concerns up-front costs. Legal costs are not a part of the Bill, but the MoJ is about to make an announcement on its proposals. However, the successful outcome of a claim under the current system is virtually certain of having an award of costs with it. Implicit in the new scheme is support from a solicitor. The very helpful diagram from the ABI of how this will all work actually puts the instruction of a solicitor into the structure. Given that there is always a cost to instructing a solicitor, it would appear that this scheme structure is an encouragement to participation by no-win no-fee lawyers.

Secondly, will the level of evidence needed be the same as in civil proceedings? Cases do not always succeed and the Court of Appeal ruled in 2007 that workers making a civil claim for compensation for mesothelioma must first prove employer negligence. I would be grateful if my noble friend the Minister could tell me whether that judgment has been overturned subsequently by the courts. If not—and more generally—proving employer negligence where neither the employing company nor the insurer are traceable will certainly be a more difficult task.

The British Lung Foundation points out the appalling record of investment into research into this terrible disease prior to 2010. Four insurance companies then put money into a three-year scheme investing £3 million in total. Now, with that scheme near its end and the four insurers saying it is unfair that this research funding is spread so thinly across so few insurance companies, surely my noble friend would agree that it is time for a rethink. Naturally, the insurance industry will say that the Government must play a big part but the Bill provides a new impetus for insurers to work collectively in the broader public interest. A small annual contribution from each would secure consistent and long-term research into this dreadful disease and its consequences. Perhaps it is time to add a small top-up levy to secure this fundamentally humane objective.

This is a milestone Bill. It provides the architecture for an end to the current compensation process, which is rather like a lottery. It provides a response which is the sign of a compassionate and caring society. The architecture of the Bill is correct. The direction of travel is absolutely correct. I commend my noble friend the Minister for bringing it before us.