Pneumoconiosis etc. (Workers’ Compensation) (Payment of Claims) (Amendment) Regulations 2012

Lord Avebury Excerpts

Tuesday 13th March 2012 Grand Committee

[Lord De Mauley]

Noble Lords will know that improved health and safety procedures have now both restricted the use of asbestos and provided a safer environment for its handling. However, we are all aware of the legacy created by the common use of asbestos before its effects on people’s health were fully understood. The Government are confronting the results of that common practice by ensuring that financial compensation is available to those affected. Indeed, that is why both of these schemes were introduced.

It might help noble Lords if I briefly summarised the specific purpose of each scheme. The Pneumoconiosis etc (Workers Compensation) Act 1979, which for simplicity of pronunciation I shall abbreviate to the “1979 Act”, provides a lump sum compensation payment to those who suffer from one of the five dust-related respiratory diseases covered by the scheme and who are unable to claim damages from employers after they have gone out of business. In outline, the diseases covered are diffuse mesothelioma, bilateral diffuse pleural thickening, pneumoconiosis, byssinosis and primary carcinoma of the lung, if accompanied by asbestosis or bilateral diffuse pleural thickening. A claim can be made by a dependant if the sufferer has died before being able to make a claim.

A person who is injured or contracts an industrial disease as a result of their work may sue the employer for damages. However, the diseases covered by the 1979 Act are known as long-latency diseases as they take a long time to develop and may not be diagnosed for a very long time after exposure to the dust that caused the illness. This is particularly so for the asbestos-related diseases within the scheme, such as primary carcinoma of the lung or mesothelioma. In some cases, it may take up to 40 years between the original exposure and the linked disease. Given that length of time, noble Lords will not find it surprising that by the time diagnosis is made, the employer responsible may no longer exist. As a result, sufferers and their dependants can find it very difficult to undertake a successful civil action to obtain compensation and the 1979 Act was introduced to help such people.

The mesothelioma lump sum payments scheme was introduced under the last Government in 2008 to provide compensation to people who contracted mesothelioma but were unable to claim compensation under the 1979 Act because their exposure to asbestos was not due to their work or because the asbestos exposure was simply unidentified. Noble Lords may recall the case of the unfortunate woman who contracted mesothelioma from washing her husband’s work clothes. The 2008 scheme means that payments can be made urgently to mesothelioma sufferers at their time of greatest need. If a sufferer dies before making a claim, a 2008 scheme payment can be made to a dependent.

The annual incidence of mesothelioma continues to increase. There are currently over 2,300 deaths from the disease in men and women each year. When other asbestos-related deaths—mainly lung cancer and asbestosis—are added, it is likely that there are now over 4,000 asbestos-related deaths in total each year. While it is always difficult to forecast exact peaks, the latest available information suggests that mesothelioma deaths in men will continue to increase to a peak of around 2,100 deaths in 2016. It is more difficult to predict when deaths in women will peak but it is likely that this will occur after the peak in men, albeit at a lower level.

Payment levels under the 1979 Act scheme are based on the level of the disablement assessment and the age of the sufferer at the time that the disease is diagnosed. The highest amounts are paid to those who have been diagnosed at an early age and with the highest level of disablement. Under the 2008 scheme, as well as under the 1979 Act, all mesothelioma disablement assessments are made at the 100 per cent rate. This means that for someone suffering from mesothelioma the amount of payment under both schemes will vary only according to the age of the person at the time of diagnosis.

Over 50 per cent of claims under the 1979 Act are made in respect of mesothelioma, a particularly unpleasant and fatal disease, caused almost exclusively by exposure to asbestos. Those diagnosed with mesothelioma usually have a short life expectancy, generally between 12 and 18 months. It is common that the sufferer is severely disabled very soon after diagnosis. I am sure we all agree that no amount of money can ever compensate sufferers or their families for the damage caused by these diseases, but it is right that they receive financial compensation, and as quickly as possible. These regulations help ensure that the level of government compensation provided by both schemes maintains its value. I commend the increase of the payment scales to noble Lords and ask approval to implement them.

[Lord Avebury]

My Lords, I am most grateful to the Minister for his careful explanation of these two orders. There are one or two questions that I would like to put to him. First, he says that there is no statutory obligation to continue uprating these payments at the level that they have been in the past. I wonder what guarantee there is that, in the future, the percentage upratings that we are looking at now will continue to be maintained. If there is not any statutory obligation, how can the victims of these awful diseases come to the expectation that they will not be left in the lurch if there is some financial emergency and that, as with many other poor and vulnerable people, they will not be made to contribute some of the miserable pittance that they are awarded towards the repayment of the deficit that we all know is constantly in the Government’s mind?

My noble friend pointed to the legacy of these frightful diseases, which may continue to emerge for 40 years after the sufferer has first been in contact with the substance concerned, whether it be industrial dust or, in the case of mesothelioma, asbestos. Have the Government formed any estimate of the total cost of dealing with these diseases in terms of the compensation that will become available over the long tail that we expect to develop in the future? I was pleased to note from his speech that this peak will be reached for men in 2016, and for women a little bit later, but we know that thereafter sufferers will continue to emerge and some 60,000 of them are expected to be discovered at some point in the future.

--- Later in debate ---

The noble Lord, Lord McKenzie, asked about the position on addressing the difference between the sufferers’ and dependants’ rates. The Government think it is right that available resources are targeted principally on sufferers of the disease. However, the Government also recognise the plight of dependants and that suffering is not limited only to first-hand sufferers. Two years ago, dependants’ amounts were increased by up to £5,000, which meant that for some dependants there is now no difference between the amounts paid. We continue to review these schemes regularly to ensure that they remain well targeted.

[Lord Avebury]

Could I ask the noble Lord a question put to him earlier? As he knows, there is still a large gap between the payments to living victims of mesothelioma and those made to their estates after they have died. For example, the payment to a sufferer aged 67 is £17,416, while the payment to his dependants if he dies at that age is only £7,915. There is still an enormous gap between these two figures. There was a commitment by the previous Government to reduce and, over a period, to eliminate this differential. Could my noble friend say whether it is the Government’s policy to continue with that diminution of the gap and, if so, whether there is any date by which they hope the process will be completed?

[Lord De Mauley]

My Lords, as I have made clear, there is an issue about the availability of resources. We think it is very important that they are targeted principally on sufferers of the disease, but we recognise the plight of dependants. That is why, under the previous Government, dependants’ amounts were increased by up to £5,000. If I can add to that from my notes I will do so, but I will possibly do so in writing, if I may.

When I came to the points of the noble Lord, Lord McKenzie, I meant to thank him for his good wishes to my noble friend Lord Freud. I will send on his message. Closely allied to that is my thanks to him for letting me off the hook on a debate about CPI and RPI.

He also asked about progress on the employers’ liability insurance bureau. We understand the urgency of the situation. After all avenues have been exhausted, injured people are still unable to find an insurer to claim against. We are continuing to work hard to see what can be done for them, but I am not in a position to go further than that today.

The noble Lord, Lord McKenzie, asked about compensation recoveries forecast over the CSR period. We estimate compensation recoveries for 2012-13 as being in the region of £21.8 million. That is for both schemes. I will write with further information if I can find it.