Diffuse Mesothelioma Payment Scheme Regulations 2014

Debate between Lord James of Blackheath and Lord Howarth of Newport

Monday 17th March 2014 Grand Committee

[Lord Howarth of Newport (Lab)]

My Lords, I add my thanks to the Minister and congratulate him on achieving this legislation and bringing in these regulations. I thank him for his compassion, for the collaborative way in which he worked with noble Lords on all sides of the House, and for his strong determination to get to where we have now reached. It is a very significant achievement and he deserves our admiration and gratitude. Like other noble Lords, I am grateful to him for raising the level of compensation to 80% of average compensation awards. That is a significant improvement that will make a lot of difference to families when they find themselves in such dire need.

I want to ask the Minister just one question. Will he clarify that it is his intention that the overall value of the scheme should continue to be set at 3% of gross written premiums after the peak year for claims? He has told us that we are to anticipate perhaps 2,500 claims in 2018, after which the numbers may reduce—although the noble Lord, Lord Alton, told the Committee that it is projected that there will be another 60,000 cases over the next 30 years. There will continue to be a significant volume, and I put it to the Minister that it is important that that 3% of gross written premiums is not reduced in the years after 2018. We all hope that after a long period of Labour Government, starting in 2015, the Minister may still have an opportunity to play some part in these affairs. I appreciate that it is difficult for him to bind his successors but it would be helpful if he would say on the record that he, as the architect of this scheme, envisages that the employers’ liability insurers should continue for the whole future life of the diffuse mesothelioma scheme to have to provide 3% of gross written premiums. If that was the case while the numbers of claimants or beneficiaries of the scheme were falling, it would make it possible to move the level of compensation up from 80% towards, or perhaps to reach, 100%. That would be one very important possibility.

There are other good things that it would be possible to do were funds to remain available while the total number of claims fell. It would become possible to backdate the eligibility for the scheme beyond July 2012 to February 2010 or even further. It would also be possible—I tabled an amendment to this effect in Committee on the Bill—provided that the legislation allows it, which of course is questionable, to adapt the regulations to cover family members who themselves contract mesothelioma even if the person who was exposed to asbestos in the workplace did not personally contract the disease. We talked about the case of a member of the family—most likely the wife—who washes the overalls of the person who has been exposed to asbestos fibre in the work-wear and she contracts the disease. As I understand it, the Minister has still not been able to bring those people into eligibility. However, if we had a slightly less tight financial envelope, then, through keeping the 3% of gross written premiums to fund the scheme, it would be possible to help those people.

Of course, it would also be possible to mitigate benefits recovery. I know that the Minister’s department, for theological reasons, will set its face against that, but, as the noble Lord, Lord Wigley, said, it seems very hard and unreasonable to claw back 100% of benefits from people who are receiving only 80% of average compensation. So there would be further latitude there. There would of course be further latitude to provide additional funding for research, the case for which has been so consistently and eloquently made by the noble Lord, Lord Alton. Among the range of options, it would also be possible to extend the benefits of the scheme, or perhaps a newly created parallel scheme, to victims of other long-latency industrial diseases whom we want to help.

I do not know what sorts of permutations might be possible but one could envisage this range of possibilities, and I hope very much that this afternoon the Minister will at least be able to tell us that there will not be a tapering of the overall value of the fund. The industry having treated mesothelioma sufferers so very badly over many decades, it seems to me that it should not be let off the hook. I appreciate that the current generation of employers’ liability insurers are not the worst culprits, and perhaps not the culprits at all in individual cases, of the failure to honour the policies that were written. However, I think that the industry as a whole has to continue to bear its share of responsibility and—I know that this is the spirit in which the Minister has always approached this whole issue—we should do the very best that we can for people who at the moment the scheme is not intended to help but who it would become possible to help if we maintained the value of the fund past 2018.

[Lord James of Blackheath (Con)]

My Lords, I apologise for not having been present at the beginning of this debate but I should like to make two points, the first arising directly from what the noble Lord, Lord Howarth, has just said. Three per cent of premiums seems to be the wrong way to come to this issue. Three per cent of the total reinsurance value backing asbestosis would be a nice round sum. It is about £6 billion of my money that I put in from Lloyd’s of London, and it is much nicer to get 3% on that. That coming in each year would give a lot of leg-room.

My other point is that I have been keeping in close contact with the Royal British Legion on this. At present, it has 42 cases—although, rather ominously, it has said that it expects that number to fall very quickly to 38—where it is providing care at its own expense and at considerable cost. Will the Minister explain what the crossover would be between this scheme coming in and either taking out or supporting the British Legion? I am concerned that when this comes in, it does not result in a hiatus, out of which the poor sufferers get nothing at all, whereas now they get support from the Royal British Legion. We need to know with some clarity what will happen in that respect. Those are the only two points I would like to make on what I have heard so far.

Mesothelioma Bill [HL]

Debate between Lord James of Blackheath and Lord Howarth of Newport

Monday 22nd July 2013 Lords Chamber

[Lord Howarth of Newport]

My Lords, if it is in order to make some brief remarks in the debate on these amendments which go a little wide of them, as the Minister has just done, I will do so now rather than on the Motion that this Bill do now pass. In the absence of the noble Countess, Lady Mar, I will take a chance and hope to have the indulgence of the House. In our proceedings on the Bill, we have considered very closely the predicament of people who have suffered the tragic misfortune of contracting mesothelioma. This predicament has elicited strong feelings of sympathy all around your Lordships’ House. It is the role of your Lordships’ House to advise our elected colleagues in another place and I would like to reflect for just a moment on what the essence of that advice should be.

In the Bill, we are attempting to deal with the consequences of what should certainly be regarded as a major scandal. Of course, among employer’s liability insurers there are many honourable and conscientious people, but in their ranks there have also been, I regret to say, a significant number who have been deeply dishonourable and reckless. Some of the employer’s liability insurers have behaved as badly as the worst of the bankers and the worst of the touts of mortgage loans did in the run-up to the crisis of 2008.

Because of the long latency of mesothelioma and the three to four decades that the disease takes to incubate, there was scope for genuine administrative confusion, but a significant proportion of insurers have managed to lose the documentation that would have enabled mesothelioma sufferers to make a claim against their employer, or their employer’s successor, and perhaps to make their case in the civil courts. Within that number, it is very clear that there were also significant numbers of insurers who wilfully destroyed that documentation. Such negligence and criminality in relation to people who are doomed to suffer from this most horrible illness and to die of it seems peculiarly cynical and, I would say, depraved. There has been the inhumanity of that but there is also another fundamental issue at stake; the proper administration of contracts is fundamental to the functioning of a free-enterprise economy and to the maintenance of trust in society.

We have all admired and applauded the Minister who, building on the initiative of my noble friend Lord McKenzie of Luton, negotiated with employer’s liability insurers the scheme that this Bill would legislate. The Minister and his officials have invariably been helpful to us, and he was most generous in his remarks just now about noble Lords who have participated in these proceedings. As he said, it has been a collaborative process. We recognise and thank him for the improvements that he has made to this scheme during the passage of the Bill—the raising of the rate of payment to 75%; his agreement that details of the scheme should be brought in by regulation; his acceptance of the principle of an oversight committee; and his decision that the scheme should go out to open tender. I am sure that he will continue to give attention to the significant issues raised just now by my noble friend Lord Browne. The noble Earl, Lord Howe, made a very constructive set of proposals in response to the noble Lord, Lord Alton, on how to facilitate and fund further research into mesothelioma.

The difficulty that the Minister has had, and one that we entirely understand, is that having conducted his negotiation with the industry and reached an agreement with it, he has found it very difficult to budge from the exact terms of that agreement. I do not think that Parliament is bound by the terms of an agreement negotiated between the Government and the industry. Indeed, it is the responsibility of Parliament to improve the scheme further if we can in the public interest. There is therefore a small number of issues which we should commend to our colleagues in the House of Commons for their further consideration. I hope that they will want to look again at the rate of payment and the date for eligibility. I very much hope that they will want to look at the plight of people who are at the moment excluded from the scope of the scheme, such as members of the households of people who were employed and exposed to asbestos, where the employee has not so far contracted the disease but the household member, perhaps someone who did the household laundry and washed the contaminated overalls brought back from the workplace, has contracted it. People in that situation are not covered by the scheme. The self-employed too, even if self-employment was something of a technicality, will not be eligible to benefit. I hope also that the Government will after all agree that there should be an annual report on the progress of the scheme to assist Parliament in its necessary further vigilance in the interests of mesothelioma victims.

I know the Minister has been fearful that if such refinements to the scheme were to be brought in by way of amendments to the Bill, the insurance industry would take away its bat and ball and revert to its customary position of taking legal action to prevent the Government from requiring it to do what in decency and justice it ought to do. Of course, we do not want to see any delays to the implementation of the Bill. I hope that Members of the House of Commons will take the view that a legal case by the employers against minor improvements of this kind to the Bill would be very weak indeed, given that they have accepted the principle that there ought to be a scheme of this kind which they should fund. My noble friend Lord McKenzie of Luton has demonstrated that the costs of such improvements would be affordable, and I do not believe that the employer’s liability insurers would be so shameless as to go to court to try to prevent these modest further improvements and further advance of justice for mesothelioma victims.

In the course of our proceedings on this Bill in your Lordships’ House we have defined the issues and laid out arguments and I very much hope that our colleagues in the elected House will wish to pursue these issues.

[Lord James of Blackheath]

My Lords, I had not expected to rise at this stage of the debate but, having listened to the noble Lord, Lord Howarth, I feel compelled to do so on behalf of the insurance industry, as he has made a serious allegation of fundamental dishonesty within it. I remind the House that I myself have stood trial in the USA on a charge that would have got me 24 years in the slammer, and was acquitted. At issue was the integrity and honesty of the British insurance industry, for which I signed the audit certificate that led to the ultimate creation of Equitas. The noble Lord should remember that we are a very public arena, and that there are many in the world with other motives who will look to get any crumb of comfort that they can to mount an action that would lead to a financial advantage for them.

The issue on which I was arraigned in the Justice Courts in New York was that, with the fundamental insolvency of Lloyd’s of London totally at issue, I had signed an audit certificate that said it was solvent when it was not. I had seven days’ non-stop interrogation on the subject, but I won. I would like to go on the record to this gathering, for the outside world as well, about why I won so that we may not find that we are undermining the integrity and financial security of the insurance industry on which this scheme will depend. There is no point in us busting the world of the insurance industry for the sake of the Bill and getting nothing.

The point was that I had signed an audit certificate to say that Lloyd’s of London was solvent and could meet all its liabilities, at a time when most people believed that it could not. I relied upon Section 18(1) of the Insolvency Act, which by the greatest irony I wrote when I was assistant to Sir Kenneth Cork in drafting it. The Act makes very specific statements about what justifies a claim for solvency, and I claimed that those conditions were met in the case of Lloyd’s. The ultimate proof that it was is the fact that Equitas, whose creation by Lloyd’s of London I chaired, has been sold to Warren Buffett for an enormous amount of money, with a guarantee that he will fulfil Equitas’s entire liabilities. In the process, he will pick up about £3 billion in pocket money for himself, and good luck to him.

The events of those days cast a very long shadow. The noble Lord, Lord Howarth, may be right in his comment that there was dishonesty in the loss of documentation and the avoidance of liability by those devious means, but there is no question of integrity in the industry with which we are dealing. It is adequately funded and has adequate backing, and it is completely solvent for the discharge of all the liabilities that we want to meet, including those that we are discussing in the Bill. It would be an outrageous act of complete disregard for the facts of history and the integrity of the industry if we were to cast any doubts on its ability to stand behind its liabilities. The issue is that there are these liabilities but there are the reserves in the world for them—you just have to find the key to unlock them, and the Bill is a wonderful part of the process of doing that. There is no question of the integrity of the industry regarding its solvency.

[Lord Howarth of Newport]

I hope that the noble Lord will accept that I did not in any way impugn the general integrity of the industry, let alone cast doubt on its solvency or its capacity to meet its obligations. I asserted, and I believe this to be correct, that there were within that industry at one time people who behaved dishonestly and, because it was convenient to them, allowed that documentation to go missing.

[Lord James of Blackheath]

I thank the noble Lord for that. I hope that he will appreciate that my concern was that I did not want to start the forthcoming Session by doing the perp walk down the middle of a 747 on an extradition order back to the USA.

Mesothelioma Bill [HL]

Debate between Lord James of Blackheath and Lord Howarth of Newport

Monday 10th June 2013 Grand Committee

[Lord Howarth of Newport]

My Lords, Amendments 40 and 45 in this group relate to the possibility of additional schemes being established. They would introduce that possibility into the Bill; perhaps I should say that they would clarify what has already been hinted at and may already be in the Bill. Amendment 40 would empower the Secretary of State to levy employers’ liability insurers in order to fund additional schemes comparable to the diffuse mesothelioma payment scheme. Amendment 45 would empower the Secretary of State to establish by regulation other schemes in relation to long-latency, asbestos-related diseases.

The difficulties of establishing entitlement to insurance payments after many years, when the employer has gone and the documentation is missing, are not confined to the circumstances of mesothelioma. If sufferers from asbestos-related cancer or asbestosis face the same barriers to securing compensation, if we call it that—perhaps we had better say “financial relief”—is it not right that they should be supported by analogous schemes?

I spoke at Second Reading about those two particular diseases as well as diffuse pleural thickening, pleural plaques, pleural effusion and rounded atelectasis. All of these are diseases of the lung and the pleura caused by inhalation of asbestos fibres. The Minister spoke encouragingly in that debate, saying:

“The issue of individuals who have developed other asbestos-related diseases through negligence or breach of statutory duty and are unable to bring a civil claim for damages of course needs to be addressed”.—[Official Report, 20/5/13; col. 690.]

Indeed, justice requires that where people have contracted one or another of these terrible diseases as a result of the negligence of their employer causing them to be exposed to asbestos fibres, surely they ought to be supported on a comparable basis.

Interestingly, the department has just produced a document entitled, Estimates of the Impact of Extending the Scope of the Payment Scheme in the Mesothelioma Bill to Include Other Asbestos-Related Diseases and Other Non-Asbestos Work Related Diseases. It expects that there will be some 2,000 asbestos-related lung cancer deaths yearly, 725 newly assessed cases of asbestosis and 821 cases of non-malignant pleural disease—around 3,500 cases a year of one sort or another. The department acknowledges that it may be more difficult to establish a causal occupational link where these other diseases are concerned and estimates that the levy on insurers to fund a scheme for asbestos-related diseases other than mesothelioma, if the new scheme were to be constituted on the same principle as the DMPS, would amount to £478 million compared with the £322 million cost of the levy for the mesothelioma scheme. That is a significantly larger cost than that of the mesothelioma scheme, but I think it is not impossible to contemplate at some point in the future. I certainly do not think that new schemes should be funded via the DMPS itself, nor do I think that anybody is in a position to create a new scheme immediately. However, it should be done in the fullness of time—indeed, as soon as possible. Therefore, while we are legislating to provide the basis for the diffuse mesothelioma payment scheme, it seems sensible that we should also be clear that we are legislating to make provision for further analogous schemes to be established on future occasions. I beg to move.

[Lord James of Blackheath]

My Lords, the problems of the Navy in this regard persist for that service. An MoD meeting has been called for 10 o’clock tomorrow morning. Will the Minister be present at that meeting? It would be helpful to know that.

--- Later in debate ---

[Lord James of Blackheath]

I might be able to ease the noble Lord’s concern on this. I believe that when the major reinsurances were written, they were limited as to the dates when an infection was identified and the reinsurance applied only to the names of those who had a registered claim at that time. That was all that was relevant for a claim; there is no question about that. Lloyd’s of London did not buy its first computer until 1986. It has nothing that goes back to this period.

[Lord Howarth of Newport]

I am always disposed to defer to the noble Lord as he has a depth of knowledge on this matter that I do not think is matched by the rest of the Committee. However, if Lloyd’s of London did not get a computer until a rather late date in the history of that august market, it none the less had brown cardboard files. It seems to me that strong procedural safeguards and impeccable record-keeping are always central to the upholding of property rights and the protection of people who enter into contracts. I cannot see how employer’s liability insurers at any phase of their history could ever have been justified in allowing the documents to disappear. There might have been a fire in the warehouse but we have not been told that there has been such a fire at any of these insurers. Other than in an extraordinary circumstance of that kind, it must be normal and basic practice to keep the documentation and to pass it on to the successor insurers and reinsurers. I cannot see how anything else could have been appropriate.

We are looking here at a spectrum of wrongdoing that runs from inefficiency and muddle through negligence to, very possibly, deliberate criminality in some places. Indeed, the scale on which the documentation has gone missing suggests that there could have been widespread criminal intention on the part of some people in an earlier generation of insurers. I say “an earlier generation”; they may no longer be active in the market but many of them may still be extant as individuals.

Another recent major scandal has occurred in terms of record-keeping. I refer to the sub-prime lenders in their Gadarene rush towards 2008. The banks, in issuing huge numbers of mortgages and eagerly selling them on, took to neglecting procedural safeguards. The combination of disregard for procedural safeguards with fraudulence led to the catastrophe of 2008 and in the years following, from which we continue to suffer. It reached a point where, with millions of mortgages in default, the banks abandoned the attempt to examine individual documentation to certify that a particular person owed a certain amount of money on a mortgage, which was the asset being sold on, and took to what was known in the trade as “robo-signing”. Instead of examining the individual records, they hired a person simply to sign masses of these documents without even examining the records.

The temptation for businesses not to keep full, accurate and proper records when it is convenient to do so clearly can be very great. We do not suppose—I do not think we do; I certainly do not—that the banks which were guilty of that systematic failure of proper record-keeping should be able to walk away from the scene of what they did and just get away with funding a token scheme. Equally, it seems to me that in the interests of justice and for exemplary purposes, there should be a proper investigation of what went wrong with the employer’s liability insurers. Of course, ELTO has been created and that improves the methodology of tracing claims and liability. However, a disastrous failure has occurred in this regard for a great many people. As I say, it seems to me that this is a major scandal. That is the reason why I have tabled Amendment 43—to require the Secretary of State to establish a commission to investigate and report on what happened in this history of inadequate record-keeping, which I do not think anything can possibly have justified. I beg to move.

Mesothelioma Bill [HL]

Debate between Lord James of Blackheath and Lord Howarth of Newport

Wednesday 5th June 2013 Grand Committee

[Lord Howarth of Newport]

My Lords, the two amendments in this group, Amendments 7 and 8, would extend eligibility under the scheme to two classes of people who, as I understand it, are not eligible under the Bill as drafted and the scheme as proposed. The two classes of people are those who are self-employed and were exposed to asbestos and in the course of time contracted mesothelioma, and family members who have contracted this appalling and fatal disease as a result of doing the laundry of an employed person who came back home with asbestos fibres on his workwear. There will have been many people who were self-employed in the building trades and the construction industry over the years. I do not know whether the department has any information as to the numbers. It would be helpful to the Committee if the Minister were in due course able to give us an idea of the scale of this problem.

The Minister may take a severe view of the case of a self-employed person who did not insure. He may argue that it is unfair to insurers that they should pay a levy into a scheme to compensate someone who failed to insure when it was his own responsibility as a self-employed person to do so. To that, I would say that the whole Bill is based on rough justice; competent, respectable insurers are required to pay for the dereliction of their colleagues in the insurance industry who lost or even wilfully destroyed documents. There is also rough justice for the recipients, who are invited to be content with 70% of the amount that they might receive in an award from a court. On the other hand, the self-employed and their dependants suffer exactly the same as employed people and their dependants. There seems to me to be a strong moral case for treating them alike.

The Minister may pleasantly surprise me, but if he does take that severe view of the case of those who did not insure on their own behalf, what of self-employed people who died insured but whose documents have gone missing? The insurance company no longer has them and, although there is tentative evidence that a self-employed person was insured, it is not substantial and the case cannot be proved. Why should not a person in that predicament be covered by the scheme? They and their dependants are in exactly the same boat in terms of suffering and loss as employed people.

Let us also consider the predicament of wives, partners, daughters—family members, people in the same household—who contracted the disease because they were doing the washing. I am personally aware of the cases of three people where that has occurred. It is entirely possible that someone could catch mesothelioma through washing the workwear of their partner or parent where the employed person has not, although they may contract it later. The dependant, the family member, the person caught in that situation, is equally the victim of an employer’s neglect. It seems morally wrong not to include such people in the scheme on the technicality that the person who was the employee has himself not been diagnosed. Insurers ought to be willing to embrace those people within the scheme.

People in that predicament are eligible for compensation under the 2008 statutory scheme, I believe, but the difficulty is that payments under the scheme are very small by comparison with payments that would be made under the scheme that we are now considering. Again, it would be helpful if the Minister or his officials could give us any idea of the number of people in that second category to which Amendment 8 is addressed.

If the Minister says that the insurers should not be obliged to extend the scheme to support people in either of those groups, I should be grateful if he will tell us what the Government will do to create justice for them. I beg to move.

[Lord James of Blackheath]

My Lords, before I comment on what the noble Lord, Lord Howarth, said, I declare my interests. I was an elected member of the council of Lloyd’s throughout its entire rescue period; I was chairman of the audit committee of Lloyd’s of London; and I was chairman of the committee that created Equitas, which effectively brought about a solution. I am afraid that I have lived and slept with this thing for rather too long in my life.

The noble Lord, Lord Howarth, is quite correct, but he opens up a much bigger issue, which I do not think that he has spotted. That is that in the realm of self-employed people, the Navy did not necessarily re-equip its own boiler rooms on the three vessels which have had the biggest ever death rates: HMS “Britannia”, HMS “Albion” and HMS “Furious”. Therefore, all those people who were self-employed and contracted in would come entirely within the compass of the noble Lord’s concern, and I support that.

I pre-warned the Minister that I have now set the Admiralty on the issue of the effects of the Bill for it and its former members. The noble Lord, Lord West, who was here just now, asked me to pass on the message that he is going to be very upset if he is allowed to die without being given his handout. He was one of only two commanding officers ever to be given a permit to sit in the boiler room during a major reconstruction, so he is almost certainly at high risk. The other one, who was the commander of the “Britannia”, has already died.

There is a very serious concern here regarding the naval forces. As the Minister knows as a result of our meeting the other day, there was a discussion in the House on 24 November 2008 led by the noble Baroness, Lady Taylor of Bolton, on behalf of the armed services at that time. She responded to my concern about the repeal of Section 10 of the Crown Proceedings Act 1947 and its replacement by the Crown Proceedings (Armed Forces) Act 1987, which had the effect of precluding any claim for asbestosis against any single person of the Armed Forces from anyone who had failed to put in a claim for an identifiable disease at that time. There were only 10 years in which such a disease could be identified, but we are talking here of a 30-year incubation period. In the region of 200 members of the Armed Forces are currently still at huge risk—it is virtually an inevitability—of suffering from this terrible disease and absolutely nil provision or obligation rests on the armed services to look after them or their dependants. I think that somewhere down the line we need to alter this Bill to allow a once-and-for-all, final opportunity for justice on their behalf. I shall return with an amendment to this effect once I have had my discussions with the Admiralty, but for the moment I just want to put down a marker.

--- Later in debate ---

[Lord James of Blackheath]

Perhaps the Minister will allow me to make one last entry into this debate. I believe that I can answer part of the question asked by the noble Baroness, Lady Sherlock. I am probably the only person in this Room who has ever made a financial provision for asbestosis. I did so on the last day of December in 1998 when I signed off the creation of Equitas; £12.8 billion of assets were locked in an investment fund put together by Warburg’s, with the countersignature of the Bank of England on it, so it was pretty good. The £12.8 billion has been sitting there and can be used only for each category of settlement of claim. One category is labelled asbestosis. I left £6 billion in there, but it is £6 billion with an annual growth rate of 6%.

When Equitas was sold for a knock-down price to Warren Buffett’s Berkshire Hathaway in 2009—I hasten to add, not with my approval—he took over all the asset reserves that were left. So even after Equitas had traded for 13 years, he got a residual balance of £8 billion of my original £12.8 billion—still growing at 6% per annum. My calculation at that time was that he was left with £5 billion for asbestosis. But the £5 billion effectively included a great deal of unidentified claims, because it was largely rolling up the reinsurance claims around the world. It is very incestuous, this claiming business: everybody insures each other and they come up with these collective figures.

At the moment, my estimate is that the global reserves for asbestosis of all the insurance companies in the world are £65 billion, including all the reinsurance markets around the world as well. But they do not expect that that £65 billion will be paid out. Let us suppose that you settled Turner & Newall for £1 billion—you will not, but let us suppose you did. You would take £1 billion out of the Lloyd’s of London reserve of £5 billion and you would have £4 billion left. But immediately you would have wiped out the consequential reinsurance demands down the chain, so the whole industry would write back as profit something in the region of £15 billion to £20 billion of released reserves.

We have a huge potential gift to the insurance industry here and we must not give it away too cheaply. We can screw this insurance industry into paying what it long since has deserved to pay. Why has it not settled so far? Right through the six years of the collapse and rescue of Lloyd’s of London, the great myth was that there was a massive amount of claims arising in the USA that we had insured and that those claims were largely spurious because they had used television advertising to get people to join up. You did not have to have any illness or even to have been in an asbestos building; you were just told, “Sign up, join in, it is a free lottery ticket”—that was the advertising in America.

We were expecting, having worked at government level and failed, to get the American President to impose strict standards on the American industry to force it to have only legitimate claims. If that had happened, we would have taken billions out of our liability and saved Lloyd’s of London without the need of Equitas. It never happened, but then up comes Warren Buffett and buys it for a knockdown couple of billion. I would put a very substantial sum of money on him having a letter in his back pocket from the President, agreeing to write off those claims or to curtail them. He is going to rip out the whole of that profit. We should not sell cheap on this; there is a huge amount out there, which we can get, and we need very much to play hardball.

[Lord Howarth of Newport]

Given the noble Lord’s deep knowledge of this, since Equitas was set up to rescue Lloyd’s from the chaos caused by its exposure to asbestosis claims, Equitas must presumably have a great deal of documentation in its files. The missing documents that would enable claimants to validate their claims before the courts might conceivably, in some cases, be within those files. Are they now in the custody of the “Sage of Omaha”?

[Lord James of Blackheath]

In the main, they are in the custody of what was the Department of Trade and Industry, because it oversaw and supervised this. It should be the port of first call for that.

Your Lordships must understand that, on Lloyd’s of London and its reserves, it still has not closed the file on the “Titanic” because it was not the “Titanic” that sank. Perhaps you know that story. It was the “Olympic”, which was substituted at the last minute because it was not finished and ready to sail. On those grounds alone, Lloyd’s of London has refused to settle most of the claims on the “Titanic” ever since, because the claims were all on the wrong ship.