Mesothelioma Bill [HL]

Lord Wills Excerpts

Wednesday 5th June 2013 Grand Committee

[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.

[Lord Wills]

My Lords, I support my noble friend’s amendments on this issue. I first became aware of this terrible disease shortly after I was elected as the Member of Parliament for Swindon North. A man came to my surgery in the exact circumstances that my noble friend has described. He was absolutely distraught because his wife had just died from this terrible disease, which she had contracted from washing his clothes. Every day, he came back from the railway works in Swindon and gave his work clothes to his wife. She washed them and, as a result, she died from this disease. It seems completely wrong, as a matter of natural justice, that people in these circumstances should be denied any access to justice under the terms of this Bill.

Like my noble friend, I hope that the Minister will surprise us pleasantly by accepting these amendments, although I fear that we may be disappointed. If we are disappointed and the Minister relies—as I understand he may well be advised to do—on the dangers of creating a precedent by accepting these amendments, I hope that he will be able to say in exactly what circumstances he thinks such a precedent will be created. Given the very particular nature of this disease, its particular virulence and the very particular way in which it is contracted, can he say precisely what precedents he thinks will be created by accepting my noble friend’s amendments?

In the mean time, I hope that the Minister will at least agree to look again at these amendments, which seem to be absolutely consistent with the basic principles of natural justice, and I very much hope that they will find their way into this Bill in one way or another.

[Lord Walton of Detchant]

My Lords, I rise to support Amendment 8. I spent the greater part of my professional life practising medicine in the north-east of England. Even though I practised largely as a neurologist, I saw many patients with mesothelioma, many of whom had worked in the shipyards on the Tyne and the Wear, and who had been exposed to asbestos. However, I also saw, not under my direct care but under the care of colleagues, some women who developed mesothelioma because they had been involved in washing the clothes of their husbands, who had been exposed to asbestos—clothes which were deeply impregnated with asbestos fibre. For that reason, I would say that this issue does not rest just on the balance of probabilities; in my view, it is beyond all reasonable doubt that they developed mesothelioma because of that activity.

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[Lord Freud]

I thank the noble Lord, Lord Howarth, for these amendments. Clearly, their intention is to make the payments under this scheme available to a wider group. The two groups, specifically, are the self-employed and those who caught it on a secondary basis by living in the same household as a person exposed to asbestos.

The way in which Clause 2(1)(a) works is that it requires the person with diffuse mesothelioma to have been an employee of an employer who was required, at the time of the person’s exposure to asbestos, by the compulsory insurance legislation to maintain insurance covering any liability arising because of exposure to asbestos, or who would have been had that legislation been in force at the time. I hear my noble friend Lord Empey saying, “Solve the whole thing once and for all”, but this Bill is, regrettably, designed to fix a market failure. There is a failure of insurers and employers to retain adequate records of the employer’s liability insurance, and to make sure that those employees who cannot trace through in order to bring a civil claim actually get a payment. So, widening the list of people who receive payments beyond the legal position would impose a disproportionate burden on the employer liability insurers who will fund the scheme through a levy.

[Lord Wills]

When the Minister talks about a disproportionate burden, does he accept that for years and years, those insurers—quite properly, because of judicial decisions—avoided making payments which we all now agree that they should have been making and which the Bill is designed to ensure that they will make in future? When he talks about a disproportionate burden, has his department made any estimate of how much money those insurers saved for all those years?

[Lord Freud]

My Lords, there is a deep and difficult history to this of which, I suspect, everyone in this room is aware. We are trying to ensure that we can get money to that group who have missed out. I am as dismayed as many of your Lordships that that has not happened earlier, but we are where we are. We are doing it now in a way to ensure that we can get those payments flowing rapidly. I apologise if I seem to be making a Second Reading speech. The problem is that this is such an emotive issue—the disease is so horrible—that it is very hard not to do so.

We have to come back to what is a specific deliverable. It is awful to sound so legally defensive, as I know that I am sounding here, but I am trying to get a deliverable, to get as much money as possible to people. I shall answer the specific questions. I know that I will not have the noble Lord, Lord Howarth, resounding with pleasure, as he wanted to be, but that is the underlying reason. My motivation is to get as much money as I possibly can safely, without risk—legal risk, in particular—to people.

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[Lord Wills]

My Lords, I support these amendments. I am particularly attracted by the one tabled by my noble friend Lord Howarth. At the very least the Committee needs to know the figures that he has asked for and I hope that in his reply the Minister will undertake to provide them.

Equally, if the insurers are claiming that they might have a case of action under the Human Rights Act were an earlier date to be instituted, I would be grateful if the Government could make available their legal advice on the likelihood of such a claim succeeding. I know that the Government usually hate making legal advice available but there are precedents for it in exceptional circumstances. I am sure the Minister will agree that this is an exceptional circumstance and I hope that he will at least look at making such advice available. It bears very much on these amendments.

I am sure that the Committee understands the constraints under which the Minister is operating. Quite rightly, he is trying to get a deal agreed with the insurers and to get it through as soon as possible so that those who are suffering from this disease can get some support as quickly as possible. We all have great sympathy with the efforts that he has put in to achieve that.

At the very least we should be looking at the earlier date. My reasons for saying that are exactly those put forward by the noble Lord, Lord Alton. If nothing else, we should be doing so because that was the wholly reasonable expectation that those suffering from this disease and their families had when the previous Government brought forward their measures. I hope that the Minister will agree to look at this again and to think about bringing forward the date in the way proposed in the amendments.

[Baroness Masham of Ilton]

My Lords, are people with mesothelioma covered by the Disability Discrimination Act? If not, they should be.

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[Lord Wills]

I am sure that shortly the Minister will give us an assurance that he will provide the figures that my noble friend Lord Howarth asked for in proposing his amendments. I also ask, in relation to this particular point, whether he can provide the Committee with any assessment that his department has made of the effect on insurers’ balance sheets of either of these two amendments—in other words, the one that has the start date in February 2010 and my noble friend Lord Howarth’s amendment, which would not set a date at all.

[Baroness Sherlock]

I would like to offer the Minister a way of reassuring us on this because we may be talking at cross-purposes.

Obviously, if an insurance company finds that its annual costs of doing business by staying in the market and providing active employer’s liability insurance are going to be higher, it will need to make sure in its usual planning that it has the resources available to enable it to pay the annual costs of doing business to stay in that market. That is not the same thing as saying it must reserve formally against liabilities that it has. That, as I understand it, is the Minister’s main argument as to why they could not have begun this process earlier. If it were about reserving for liabilities, there are clear regulatory requirements and negotiations with auditors that would constrain the point at which the insurance company could start doing this.

However, if we are simply looking at a higher annual cost—and I am not suggesting that that is not a relevant or material consideration to the company—of remaining in the market which is unrelated to the nature of the specific policies that were written, there is presumably no reason why the insurance company could not have planned for that by reading carefully, as I am sure it did, the document published by my noble friend Lord McKenzie. This showed clearly that the Government wished to intervene in this area and the options on which they were consulting, all of which would clearly have required the industry to pay out. It was clear that that was coming down the track.

A way for the Minister to solve this would be to answer my other question. Could he provide—either now or by the next sitting—some evidence of an insurance company that has reserved since the announcement was made in 2012? There must be companies that have a 2012 financial-year end date. If the Minister is right, insurance companies will presumably have reserved. Perhaps he could share that with us.

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[Lord Wigley]

My Lords, the fact that we are at a late stage of the debate today should not stop us from speaking and pressing this most important of the amendments to the Bill that we are considering. If we get nowhere on it today, I suspect that we may need to come back to it on Report. As was rightly said a moment ago, this is something that was referred to by almost all the speakers at Second Reading, and it should not go by default at this point in time.

It strikes me that if someone is entitled to 100% of the compensation because of their condition, their suffering and what they have gone through, but they have not had that compensation because at some time in the past some insurer failed to deliver it, that does not in any shape or form justify a 30% abatement of what they will get. Their suffering should justify the 100% level. There may be an argument about 10% here or there, although I do not like even that, but I certainly do not like the idea of it being abated by 30%.

No doubt there has been some horse-trading on this. It would be interesting to know where the Minister started his argument. If 70% was the first offer made by the insurers, then I suspect that there is room to move up from that figure. If there is not, then this is something that Parliament should be addressing further. I do not recall with the 1979 Act that there was a reduction in the compensation on the basis that it was going to be easy. The argument put forward at the time was that it was fair compensation for the suffering. If that is the case with other legislation, why on earth should there be less for people who have suffered so much? This really is something that should be pressed.

[Lord Wills]

My Lords, I, too, support the amendments. I very much agree with my noble friend on the Front Bench and the noble Lord, Lord Wigley, that these amendments go to perhaps the most important issue in the Bill. I agree with everything that has been said so far although, given the hour, I do not intend to rehearse all the arguments.

I assume that this particular issue must lie very near the heart of the deal that the Minister has done with insurers. I am confident, from everything that he has said today in Committee, that he has done the very best deal that he thinks possible, particularly given the need to get a resolution quickly so that those who are suffering from this terrible illness get the support that they deserve as quickly as possible. I am sure that that has been at the forefront of his mind. He has said already in Committee that he is going to return to his discussions with insurers, and I hope that he can assure the Committee that he will convey to those insurers the strength of feeling that he has heard, at this late hour in our proceedings, about this issue. He knows it already. He has heard it at Second Reading and this has been a consistent concern throughout.

I hope he will remind his interlocutors that there is a real risk that if they do not agree what is widely conceived of as being a just settlement—and this is not a just settlement, in my view and that of every other speaker so far this evening—and, worse still, if they threaten delays or legal action as a result of anything that the Minister goes back to them with, this Bill is most unlikely to be the last word on these issues, given the strength of feeling in both Houses of Parliament on this issue, which we have seen time and again in recent years and which is responsible for this Bill coming before us. I hope that he will remind them of the risk that any future legislation may well be tougher than this Bill.

[Baroness Donaghy]

My Lords, briefly, we are being presented with the alternatives of finding the paperwork, in which case the process is dealt with in one way, or not finding the paperwork, in which case this new levy will apply. As a fully paid-up administrator, I think there is a range in between about the effort that is put in to find the paperwork. If we are talking about incentivisation, I would argue for 130% instead of 70% because that might make some people try a little harder to find the paperwork. I really should have put an amendment in to make it 130%. I believe that there should be some incentivisation but I would turn the argument on its head: we should try to persuade the insurance companies to try a bit harder to find the paperwork.