Mesothelioma Bill [Lords]

Debate between Kate Green and John Leech

Monday 2nd December 2013 Commons Chamber

[Kate Green]

My hon. Friend is right. Over many decades, insurance companies have taken in premiums and in every way resisted paying out to victims. It is good to have reached the point at which the industry is finally facing up to its collective responsibility, but it still has a long way to go.

The Minister rightly described mesothelioma as a cruel and vicious disease that is caused by exposure to asbestos, and as a long-tail disease that is diagnosed years and often decades after it has been contracted. It is invariably fatal and, once a diagnosis is made, cruelly quick: following diagnosis, most victims have only about nine months of life left. The effects of the illness are horrifying for sufferers, and for the loved ones who watch them die. The true disgrace is that the link to asbestos has been known for many decades.

One consequence of the long period for which the disease can lie dormant is that, following a diagnosis, it is of course more difficult to attach liability, given that the circumstances that brought about the condition often took place many years previously. As a result, many sufferers have until now been forced to rely only on statutory payments and welfare benefits. Although I am pleased that the industry will at last take a small step towards meeting the obligations it owes to sufferers, it is only right and proper that it should finally do so.

I understand that, as the Minister said, the scheme will be established as one of last resort, which is to be relied on only if no employer or insurer can be traced. That might be a reasonable position for the industry, but we must ensure that it does not exacerbate the pain and difficulty for claimants.

During the short period from diagnosis to death, sufferers become desperately ill, yet at the same time they are expected to go to often huge lengths to trace a former employer, perhaps from many years back; to identify that employer’s insurer, perhaps via the Employers’ Liability Tracing Office; to obtain the necessary medical records and wait the 40 days that agencies have to respond to such requests; and then, ultimately, to take legal advice and access the scheme. I think we can see how that would eat into the tragically limited time remaining to sufferers following diagnosis, so we must do all we can to speed up and smooth the process.

I recognise the progress made in speeding up the process and helping victims to trace their employers’ insurers. Following its introduction in 1999, many insurers signed up to a voluntary employers’ liability code of practice, but none the less tracing rates remained deeply disappointing, never exceeding 50%. In 2012, the success rate was just over 34%; and even accounting for those cases now proceeding via ELTO, the success rate in 2012 still reached only 61%. Clearly, there is considerable scope for better support for victims to pursue insurers.

It seems, however, that the industry, in its negotiations with Ministers, has sought to do the very minimum it can get away with to make amends to sufferers. As noted, payments will be set at just 75% of average civil damages—admittedly, as the Minister said, an uplift on the 70% initially proposed. It is claimed that the industry cannot afford to pay more without passing on the additional cost to current employers’ liability customers. The notion that this multi-billion-pound industry, which has been collecting premiums for decades while doing all it can to avoid payouts and which is to be gifted £17 million by the Government under this Bill and lent a further £30 million to help with the scheme’s introduction and the smoothing of the first year’s payments, cannot and should not be more generous is simply not credible.

[Mr John Leech (Manchester, Withington) (LD)]

Does the hon. Lady have a view on what level of compensation could be paid without insurance companies passing on the cost to current policyholders?

[Kate Green]

There are two questions wrapped up in that one question. First, on present figures, what does it appear the industry can afford? I will say something about that in a moment. Secondly, does the industry have to pass on the cost to its customers, or could it choose to absorb it? We are talking about roughly 10% of the total value to the industry of the employers’ liability market. I appreciate that that is not a small sum, but as colleagues have pointed out, the industry has had decades to accumulate profits as a result of the premiums it has collected.