Mesothelioma Bill [HL]

Lord Browne of Ladyton Excerpts

Wednesday 5th June 2013 Grand Committee

[Lord Wigley]

My Lords, I rise to speak very briefly in support of the amendments put forward by the noble Lord, Lord Howarth of Newport, and particularly to address the question of the self-employed which is covered by Amendment 7.

Many people working as jobbers in industries who may undertake patching work in schools or in other buildings where asbestos was involved—perhaps electricians who need to drill into the walls—will have had this exposure. As a consequence, many of them will have suffered, and many will have died. Their need for recognition and for help by way of compensation is as great as that of those who are not self-employed. I understand from where the Government have come on this—this is an agreement with the insurance industry, of course—but that in no way lessens the need and the suffering of those who are self-employed, who might not be the people who the insurance industry would choose to recompense in this way. If that is the case, does it not behove the Government to step in to fill the breach for those who cannot be covered by such a scheme? I simply ask the Government and the Minister to think about that between now and Report.

[Lord Browne of Ladyton]

My Lords, I rise briefly to support both of my noble friend Lord Howarth’s amendments, and I do so—relatively unusually, I think—by referring the Minister to the briefing from the Association of British Insurers which I received about one of my noble friend’s amendments, but not about the other. It is the omission of the other amendment that interests me. However, let me deal with the first one first.

The briefing contains an argument against Amendment 7 which is summarised essentially in one sentence of this short briefing:

“As employers’ liability insurers will be funding the untraced scheme, payments from the scheme will only be made to those who would have been covered by employers’ liability insurance”.

That is the argument that the insurers make and I understand why they make it. The association then goes on to imagine that most people who worked in this industry may have been employed at one time and self-employed at others, and that is probably right—there will have been people who were exposed to these fibres both in an employed and in a self-employed capacity. Because of the way in which these cases are dealt with in the courts, that will not disqualify these people from being included in the payment scheme. However, the association goes on to make a point which I think it believes is crucial to its argument but which actually grossly undermines it. In the last sentence it says:

“There will only be a very small category of people who have been solely self-employed and therefore not eligible for a payment from the untraced scheme”.

Let us assume that the phrase “very small category” is the equivalent of “a very small number”. I am not quite sure why the association used the word category; I think that it means a very small number of people. If indeed that is right, and if indeed we are doing an injustice by excluding a very small number of people from this scheme, that is an argument for extending the scheme to that very small number of people, because it would be grossly—disproportionately—unfair to exclude them.

The second point relates to Amendment 8, which essentially proposes extending the scheme to those who have been exposed in a secondary way to asbestos but through exactly the same route as those who are employed and covered by compulsory employer’s liability insurance, or who would have been covered had it been in existence prior to 1972. That is the way in which the payment scheme is constructed. It strikes me as very odd that the Association of British Insurers does not deal with this issue at all in the brief. As I have listened to the debate unfold in the Grand Committee this afternoon, I have wondered why that was the case. I can certainly figure a set of circumstances where there is a traceable employer and where there is a secondary infection. If a man comes home from the shipyard with fibres on his clothes it does not matter whether they are washed—if the fibres get into the air of the environment in which his children or other relatives live and they breathe them in, they are at risk of developing mesothelioma eventually if these fibres are trapped in the fibres of their lungs.

There must be cases where that negligent act has caused secondary infection and mesothelioma and there has been a successful litigation against the employer of the person who carried the fibres. So there is a chain—a direct link—and the person who would be sued would be the employer.

I do not know the answer to this, because I do not know the details of the employer’s liability compulsory insurance scheme well enough. However, I ask the Minister, if he can tell us at some stage during the course of our deliberations, whether the insurers pick up the payment for the successful litigation because they were the insurers in the employer’s liability policy, or because of public liability insurance, which is a separate and different but compulsory insurance for people who are in workplaces. Either way, this is likely to be the same group of insurers. I suspect that it may be through the route of the employer’s liability compulsory insurance, and if that is correct, may it be the case that this payment scheme already applies to their efforts? I am not sure whether it does or not, but if it definitely does not, it definitely ought to. Since these general insurers, who carried or presently carry the risk of employer’s liability compulsory insurance, are likely to be the same people who are carrying the risk of public liability insurance, I am sure that the Minister can persuade them that it should.

--- Later in debate ---

[Lord McKenzie of Luton]

My Lords, this is, I hope, a brief and probing amendment. To be eligible for a payment under the scheme, Clause 2(1)(c) requires that a person has not brought an action against an employer or insurer and is unable to do so. The amendment requires that action to be successful. The implication is that an unsuccessful action would not preclude access to the payment scheme.

I have had some contact with the Bill team on this, and I think that the government response will be that if an action cannot be successful, it would necessarily preclude access to the payment scheme, because the conditions could not be met. I wonder whether that is necessarily so. What if an action were against an employer found not to be the right one but when the right one had gone out of business and the insurer could not be identified? Similarly, if an insurer were pursued by an action but proved to be the wrong one, why should that then preclude access to the scheme? I beg to move.

[Lord Browne of Ladyton]

My Lords, I support my noble friend’s amendment, although I think that there is a more elegant way of dealing with the issue. Frankly, and I hope that the Committee—particularly the Minister—will agree, I do not understand why Clause 2(1)(c) is there at all. It does not seem to make any sense.

The clause has two parts to it. The second part is that the person who is diagnosed with diffuse mesothelioma will be eligible for the payment only if he or she is unable to bring an action against an employer or insurer because the relevant employer or insurer cannot be found or no longer exists. I cannot envisage any circumstances in which anyone could have brought an action against some person who cannot be found or did not exist. I do not understand why that conditionality is there at all. I can envisage the sort of circumstances that my noble friend suggests, which are that an action was brought wrongfully against the wrong employer or the wrong insurer, but why should that disqualify someone from making a claim and receiving a payment from the scheme because they made a mistake in the past and thought that they had the right employer or insurer?

I urge the Minister to take that away and perhaps rephrase the clause to provide that a person who has been unable to bring an action against the relevant employer or any relevant insurer for damages in respect of the disease because the employer and insurer cannot be found or no longer exist, or for any other reason. That seems to be the answer. I do not understand why that part of the clause is there at all.

[Lord Freud]

My Lords, as I understand it, the purpose of the amendment is that a person may be eligible for a payment from the scheme if they have not brought a successful action against their relevant employer or insurer for damages. However, there is another condition attached: they must also not be able to bring an action for some reason, perhaps because the employer or insurer cannot be found or no longer exists.

A person should be eligible for a payment from the scheme if they have not brought an action against a relevant employer or insurer through the courts and there are very good reasons why they are unable to do so. It is a scheme of last resort. If a person can bring proceedings, they should do so. But a person should not be eligible for a payment from the scheme if they have brought an action against a relevant employer or insurer through the courts and they have not been successful in that action because they have not been awarded civil damages. This may happen for a number of reasons. For example, the courts may consider that the employer did not expose the person to asbestos as a result of negligence or breach of statutory duty, or that the person was not an employee. It is not right in these circumstances that the person should be able to make an application to the scheme. It is a scheme of last resort, not a no-fault scheme. The scheme is correcting a market failure where employer’s liability insurers failed to keep thorough records; it is not replacing the civil system.

[Lord Browne of Ladyton]

My Lords, I am reluctant to intervene on the Minister when he is reading a very carefully constructed argument but, with all due respect, what he has just read defies logic. Bearing in mind that the person must have been diagnosed with mesothelioma after July 2012 and, if the draft rules become the rules of the scheme, must have brought any claim within three years of that diagnosis. It is envisaged that in that period the person would have sued somebody despite the fact that they were unable to find the relevant employer or the relevant insurer. It cannot possibly have been the relevant employer or the relevant insurer that they sued so the determination of the case is an irrelevance. I do not understand how people can sue somebody they cannot find.

Lord Freud: My Lords, what the legislation aims to do, and does, is to say, “Go to your relevant employer or insurer, if you can find them, take them to court and go through the legal process. If that process finds that they were not liable, you cannot go to the scheme”. If that was a mistake, you could find another employer. To answer the question of the noble Lord, Lord McKenzie, there is nothing to stop you finding the next employer, but if it was found in that case that the employer was not liable, clearly the scheme would not be liable either”.

I am not sure that I understand the concern. This may be because of the way in which one reads the legal language. I think the best thing I can do is write a letter spelling out exactly how the language works.

[Lord Browne of Ladyton]

The reason we are able to deal with these cases in this way is because of the history of the way in which mesothelioma litigation has developed. In mesothelioma cases, one can sue any employer. So if one finds a relevant employer or insurer, one can sue that person—I think that is agreed. That is part of the reason why this group of people are able to have access to this payment scheme whereas people suffering from other asbestos-related diseases cannot so easily do so. We agree on that.

Any person who has found a relevant employer or insurer to sue is disqualified from the payment scheme—full stop. It is not a question of finding one and then saying, “I cannot find the other, therefore I want to claim through the scheme”, anybody who finds one and has somebody to sue is disqualified by the second half of the clause. The first half of the clause is unnecessary.

[Lord Freud]

As I said, let me write to noble Lords about the necessity or otherwise of the first half of the clause, because I suspect that we are in deep legal territory.