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The Actuary The magazine of the Institute & Faculty of Actuaries

MPs criticise government over mesothelioma review

The justice select committee has today criticised a government review of compensation claims for the asbestos-related disease mesothelioma, including an agreement reached with the insurance industry to pay for some deals.


Government review into asbestos-related disease mesothelioma was not thorough enough, Photo: Shuttershock

The Mesothelioma claims report concluded the review, which examined the law relating to compensation clams, had not been undertaken in a thorough and even-handed manner.

Committee chair Alan Beith said: ‘We listened carefully to views on both sides of an emotive and polarised debate about the process of claiming compensation for this terrible disease, caused by exposure to asbestos.

‘We have concluded that the government’s approach has been unsatisfactory on a number of counts.’

The government’s review examined whether sections 44 and 46 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) should apply to mesothelioma compensation claims, as they already do to other personal injury claims.

Under these sections, successful claimants pursuing cases under conditional fee agreements cannot reclaim the success fees charged by their own lawyers from losing parties, or the cost of taking out insurance against having to pay the other side’s costs.

The government’s review concluded that these arrangements should apply, as other reforms to civil litigation, including a 10% uplift in the level of general damages for personal injury claims, meant claimants were likely to receive a net financial benefit.

As part of this process, an outline agreement between the government and insurance firms about the Diffuse Mesothelioma Payment Scheme, funded by employers’ liability insurers, was reached. This provides compensation to mesothelioma sufferers unable to trace a liable employer or insurer, with the first payments expected to be made in July 2014.

According to the ‘heads of agreement’, the Association of British Insurers and the government agreed a process that included a number of action points, including a government commitment to review the applicability of provisions of LASPO.

MPs said they were concerned government had not been transparent or open about the fact that its overall policy in relation to mesothelioma had been shaped in accordance with an agreement reached with insurers.

Ministers had ‘not been open and transparent’ about the existence of the document with the committee or mesothelioma victims themselves.

‘It was a surprise to us that the government concluded a heads of agreement, however informal its status, with parties on one side of the argument about mesothelioma,’ Beith said.

‘The provisions of this document, which remained undisclosed to other interested parties, have shaped the government’s approach to this issue, and we are concerned that the government appears to have had no intention of supplying us with this document as part of our inquiry.’

Responding to the report, a Ministry of Justice spokesman said: ‘Mesothelioma is an awful condition which can destroy lives in a frighteningly short amount of time and we want to help sufferers and their families.  We are considering the best way to get claims settled fairly and quickly.

‘We will consider the report’s recommendations and respond in due course.’

The ABI said the industry had always been ‘open and transparent on its commitment to help as many mesothelioma claimants and their families as possible’

Assistant director James Dalton added: ‘We make no apologies for negotiating with government a scheme, paid for by insurers, that will compensate an extra 3,000 sufferers over the next ten years, who would otherwise go uncompensated.

‘Significantly, this report raises the issue of high legal costs in mesothelioma claims, citing an average legal cost of £20,000 for every mesothelioma claim in England and Wales. Excessive legal costs mean higher insurance premiums for all employers, and clearly claimant lawyers have got some difficult questions to answer about why they do not support lower legal costs.’