My Lords, this amendment is intended to highlight the important issue of conflict of interest, which we have not sufficiently considered so far in our proceedings. The Government are proposing
that a scheme intended for the benefit of mesothelioma sufferers should be run by the same insurance industry whose negligence deprived mesothelioma victims of legal redress and which for years held out against fair and decent treatment. As envisaged by the ABI, the industry would create an incorporated body, accountable to its funders in the industry through its board.
In its briefing to us, the ABI has made mention of the possibility of competition that the Minister informed the House about earlier today. I applaud his intention to ensure that there is a competitive tender of the administration of the scheme; that is right in principle. However, it may be difficult for the noble Lord to find other tenderers that are competent to run the scheme. Let us see.
Meanwhile, the difficulty we need to keep clearly in sight is that it is in the insurers’ interest to pay 75% or even less of the average civil court settlements. It is in their interest to avoid costly procedures and negotiations of the kind the court route requires of them. Indeed, it is in their interest to determine that applicants for awards from the scheme are found to be ineligible. It is in their interest, after all, to reduce the levy.
The Bill, as drafted, and the scheme, as proposed, create an administrator and a technical committee that have pretty well plenipotentiary powers to assess eligibility, the validity of documentation and the significance of evidence. Under Clause 4(3)(b), the scheme may,
“in particular, give the scheme administrator power to decide when to impose conditions or what conditions to impose”.
That is a fairly blank cheque. In the scheme contents that we have been shown, which are to be brought in by regulation, the scheme administrator has powers to refuse altogether to make payment. We need to be well aware that there is a bias built into this system. It may be unavoidable but it is there.
The ABI has informed us that, of 4,051 ELTO searches in the year from May 2011 to April 2012, 2,354 were successful in tracing the documentation; it follows that 1,697 were unsuccessful. Yet the ABI is predicting that only 200 to 300 claimants will be found to be eligible each year. What is to happen to the other five-sixths of those whose documents could not be traced?
The powers of the administrator and technical committee are, as I have suggested, almost total. Admittedly, there is provision for reviews and appeals and, if this is to be a body created under legislation, there may be scope for judicial review, but that of course is not a desirable way to resolve these cases.
The insurance industry is going to be judge and jury in what is in its own interest. The case for using the insurance industry to administer the scheme is that it understands the business. However, I hope that the Minister will describe to the House how he intends to ensure fair play. The history of employer’s liability insurers does not inspire confidence and it is not satisfactory to design into the scheme a blatant conflict of interest. Therefore, the question is: will the oversight committee proposed in the amendment from my noble friends on the Front Bench be sufficient to ensure fair play?
My Amendment 30 would require the Secretary of State to report on the performance of the scheme and the administrator to Parliament each year. This amendment is modelled on a provision that the Government have written into the Intellectual Property Bill. It is an admirable provision. If the Minister is willing to agree that there should be an oversight committee, should it report to the Secretary of State and the Secretary of State then report to Parliament on an annual basis? I hope that that will be the case. The matters on which we should look to the Secretary to State to report to Parliament include: the performance of the administrator; all the relevant data and statistics to enable us to know the performance of the scheme in detail; the number and variety of cases; the speed at which cases are processed; the pattern of tariff payments; the evolving relationship between payments under the scheme and awards made by the courts; and the scale and nature of compensation recovery unit recoveries from payments. We should also be told about what is happening in the field of research, which we debated at length this afternoon.
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The report ought also to cover those matters that are the responsibility of the Ministry of Justice in the Government’s two-pronged strategy to support people with mesothelioma. We need to know, therefore, what legal costs are being incurred. We need to have reports on reviews and appeals that have taken place—and, indeed, on the issue of legal aid and the cases that may be justiciable under the ECHR and which would be eligible for legal aid. We will need to know about the progress of the conditional fee agreements, about which we are waiting to learn from the Ministry of Justice what it intends.
All in all, we need to have an understanding of the state of co-operation between the DWP and the Ministry of Justice. It does not appear, at the moment at least, that it is as good as it should be. I took the precaution of inquiring at the Library yesterday, and made a final check today, to see whether the Ministry of Justice consultation had finally come out—a consultation that has been promised so many times, and upon which our expectations have been dashed so many times. Believe it or not, unless the Minister can correct both me and the Library, it has even now, after all these postponements, still not appeared. It does not seem that the Ministry of Justice shares the sense of urgency of the Minister at the DWP.
To its credit, the DWP is anxious to make haste to get its side of the bargain on the statute book. The Ministry of Justice appears to be entirely uninterested. It is so busy demolishing the foundations of justice with its attacks on the legal aid system that it has no time to spare any consideration for mesothelioma sufferers. It is simply awful. The Minister himself has said that he envisages a five-yearly review. Perhaps every five years, the annual report will be really super.
Finally, I suggest that the report should also cover the Government’s plans to establish other schemes—which is the subject of Amendment 29 in the name of my noble friends—and their thoughts about an Armed Forces scheme, which the noble Lord, Lord James of
Blackheath, wants to see. I would go even further than the noble Lord. There is clearly an equal and extensive range of obligations on the Government to ensure that people who have contracted mesothelioma as a result of negligence on the part of the state or its agencies —on construction sites, shipyards and the enormous variety of industrial situations where the state itself may be the employer or has contracted to employ other employers—are no less well looked after and compensated than those who have been the victims of other employers and are unable to get redress from employer’s liability insurers. The Government self-insure, and have therefore taken that responsibility upon themselves. The annual report ought to cover the range of the Government’s responsibilities in this whole area.
Mesothelioma victims have few champions. They have the Asbestos Victims Support Group’s forum and the Association of Personal Injury Lawyers. They have the noble Lord, Lord Freud, whom I am sure they appreciate very much, and my noble friend Lord McKenzie of Luton, as doughty champions for them. Noble Lords in this House and Members of Parliament in another place are also committed to supporting them. However, their case was ignored by policymakers for decades. Again and again, the avarice of the insurance industry outweighed the generosity of the Government in 1979 and again in 2008.
Continuing parliamentary vigilance is essential. The Minister has so far promised an annual Written Ministerial Statement. That is not enough: we need a full annual report. I beg to move.