My Lords, I, too, thank and congratulate the Minister on bringing the Bill to the House. He is a good man who has fallen into bad
company. He has had to present a number of pretty miserable policies to the House. However, we should recognise that he has worked long and hard to develop this scheme and today he brings us, by his standards, very good news indeed. We should also express measured appreciation of the insurance industry and the ABI. Goodness knows, the industry has been grudging and obstructive in the past, but it has established the Employers’ Liability Tracing Office and is willing to go along with this scheme. It is, however, a scheme that needs improvement.
Credit should certainly be given to the previous Government for the preliminary work that they did. The Minister was rightly generous to my noble friend Lord McKenzie, who published the consultation document in February 2010 on accessing compensation. Credit should also go to this Government for pursuing the process, and I think that means that credit should go to the permanent Civil Service. Credit should, of course, also go to the campaigners. It is right that we should do all we reasonably can to support those who are victims of the horrors of diffuse mesothelioma because of their employers’ negligence. This long-latency illness incubates for perhaps three to four decades but at the end inexorably causes great suffering and death. It is right that we should do what we can to support the dependants of people who contract the disease. It must be grim for all of them in the circumstances that follow diagnosis to struggle to achieve compensation. I am not convinced that that process will be much eased given that the new scheme is a scheme of last resort, but at least it will yield better financial outcomes for more people.
I also ask why the scheme is to be limited to mesothelioma alone. Other asbestos-related diseases of the lung and the pleura caused by the inhalation of asbestos fibres ought surely to receive equal consideration such as asbestosis, diffuse pleural thickening, pleural plaques, pleural effusion, rounded atelectasis and asbestos-related lung cancer. With all these illnesses, employers’ liability is equally disputed and equally hard to trace. Natural justice tells us that people who suffer from this range of asbestos-related illnesses should be treated alike. They all have in common that they suffer from their employers’ negligence in relation to asbestos. The Minister said in his opening speech that these problems also need to be addressed but he thought that if they were addressed straight away too many cases would spoil the scheme.
I echo the question asked by the noble Lord, Lord German, because I am not clear whether the Long Title allows the flexibility to introduce under this legislation further schemes to support people suffering from other asbestos-related diseases. If it does—I understand why the Minister is unable to proceed with introducing schemes in relation to other diseases now—will he indicate when he expects to do so? If the legislation does not permit it, and is not susceptible to amendment to enable it to do so, will he pursue his mission and introduce further legislation? As my noble friend Lady Taylor said, we need a comprehensive approach. In the mean time, we must address the project that the Minister has placed before us.
The Government have said that their overarching aim is to ensure that employees who are injured or made ill in consequence of their employment should not be denied fair compensation. The scheme, in providing compensation where the employer or the insurer cannot be identified or traced, goes a long way to achieving that objective but does not go far enough.
I would like to probe the Minister on a number of points. I would be grateful if he would clarify the position on legal costs which I do not understand very clearly. The Government’s aim in the Legal Aid, Sentencing and Punishment of Offenders Act 2012—the LASPO Act—was to remove personal injury from the scope of legal aid. On that basis, legal aid would generally not be available to a person diagnosed with mesothelioma who seeks advice from a solicitor, as he or she is bound to do.
Part 2 of the LASPO Act implements the Jackson reforms to no-win no-fee arrangements. However, the Government have deferred implementation of the measure in relation to mesothelioma claims pending the findings of a report which they have commissioned. When will we have the findings of that report? If Sections 44 and 46 of LASPO are applied in mesothelioma cases, as I understand it, lawyers acting under conditional fee agreements will be able to charge a success fee payable from the damages. Does the Minister think it is appropriate that that should be so in mesothelioma cases?
How does the new scheme that this legislation enacts take account of the new position on conditional fee agreements? The 2013 impact assessment assumes that a scheme payment would include an amount to cover legal costs in making an application. The 2012 impact assessment estimated that would be £7,000 for a successful case and £9,000 for an unsuccessful case. The overall legal costs for the scheme are put at £24 million to £27 million. As with civil actions, will they be paid out of the scheme award, which is already reduced to 70% of the level of civil damages, or will they be paid by the scheme over and above that 70% award? Will the payment take account of a personal injury solicitor’s fees incurred for work prior to the application being made to the scheme? Who decides these matters? As far as I can see from Clause 1, the Secretary of State does. There will be no legal aid for appeals to the First-tier Tribunal following the review scheme decision, unless they are exceptionally to secure the claimant’s rights under the ECHR or under European Union law. Are the Government content with that situation? Are the Government going to control the fees that the lawyers charge? The statement by the Minister for Employment, Mr Mark Hoban, on 13 May indicated that the Ministry of Justice is going to consult about a fixed-cost regime for mesothelioma claims. It would be helpful if we could be told what he has in mind. It would also be helpful if the Minister could give us, either today or in Committee, a clear statement in relation to what, if any, legal costs incurred under the new arrangements by claimants, either pursuing their own case against an employer or an insurer or claiming from the scheme, will be met under the arrangements that he has designed.
The interaction of the scheme with the benefits regime will warrant careful consideration. The Bill would permit the Secretary of State to recover benefits
and other sums from scheme payments. The impact assessment tells us that the Government expect to recoup a net £69 million after the first year. However, in their briefing to us the ABI has stated:
“We have suggested that mesothelioma sufferers should be able to access financial support in addition to the benefits they are entitled to.”
What benefits will continue in payment after an award has been made? If an award under the scheme is to average £87,000, as we are advised it will, what benefits will be left for the claimant? Will income support and housing benefit be swept away? What will happen to industrial injuries disablement benefit, which is a major benefit, and very important in the budgets of such families? Is it correct that the payment of benefits would not be affected during the first year after an award? That is the case, I understand, where civil compensation is concerned. Would it still be the case with this scheme? Is pension credit to be ignored indefinitely? What will be the developing position under universal credit?
It would also be helpful if we could be told whether lump sums, payable for example under the Pneumoconiosis etc. (Workers’ Compensation) Act 1979, or the diffuse mesothelioma scheme under the Child Maintenance and Other Payments Act 2008, will be recovered where payments have already been made. Or will it only be the case that someone who receives an award under the scheme will no longer be eligible in the future for such payments?
Schedule 1 contemplates the recovery of benefits on a scale such that the whole award could be negated. However the schedule amends the recovery of payments legislation to permit, but not to require, the Secretary of State to claw back payments. What does the Minister intend? What scope is there for discretion? For example, will the DWP refrain from clawing back any payments that have been made in relation to pain and suffering? Is he able, and will he be prepared, to limit to a certain percentage the amount of benefits to be denied or recovered? Will he take a lenient view of the treatment of carers under the benefits regime in these circumstances? Past practice has been to an extent discretionary and compassionate. I am quite sure that the noble Lord will want to be as compassionate as he can in the appalling circumstances that these families face. I hope he will err on the side of generosity in relation to both benefits and legal aid.
I had hoped to have time—but I have gone on too long on these subjects—to say that I, too, can see no justification for the limit of 70%. I will just briefly say that it cannot be right to discriminate against claimants where employers and insurers have lost or destroyed the documentation. It is no fault of the claimant that the employers and insurers are in that difficulty. If all claimants are to go through a single portal to be followed by a rigorous search to trace the documentation, then surely all claimants ought to be treated equally. There will be a temptation for the industry not to trace the documentation if failure to do so means they will only have to pay 70% rather than the full amount of compensation they anticipate the court will award, so there is a real risk of the industry being conflicted here. Certainly employers’ liability insurers are not in a position to plead poverty. They did very well for
decades. Up until 2008 they even kept the lump sums that were awarded by the tax payer, aggregating to over £20 million a year to offset the cost to them of compensation. We can be sure, notwithstanding what the Minister has said, as sure as eggs is eggs, just as soon as market conditions permit, the insurance industry will pass on the additional cost to them of this scheme by way of increased employers’ liability premiums.
So, pragmatism and practicality, as he said, are very important, but I am not convinced that the Minister has struck the best bargain that he could in the interests of mesothelioma sufferers and their dependants in agreeing to limit payments under the scheme to 70%.
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