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Mesothelioma compensation: Government must consult again following "maladroit" review

1 August 2014

The Justice Committee urges the Government to undertake a fresh consultation, in its report into mesothelioma claims.

The Justice Committee concludes, in a report published today, that the Government’s review of mesothelioma claims under section 48 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) was not prepared in a thorough and even-handed manner, and it calls on the Government to undertake a fresh consultation.

On other matters to do with the mesothelioma claims process, the Committee:

  • urges expedition of the primary legislation needed to bring into effect the Third Party (Rights Against Insurers) Act 2010, which will enable a claim to be issued against an insurer without a judgment first having had to be obtained against an insolvent insured party
  • calls for the Ministry of Justice to work in tandem with the Department of Health to reduce delays in the production of medical records of mesothelioma victims.

Chair's comments

The Chair of the Committee, Rt Hon Sir Alan Beith MP, 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 was not reconciled to the concession it was forced to make in Parliament during the passage of the LASPO legislation to exempt mesothelioma cases from its provisions, and determined to review the exemption as soon as it could.

In its haste the Government failed to ensure that relevant information, such as a cost-benefit analysis of the changes, was available to interested parties. It also shoehorned part of its section 48 review into a wider consultation on changes to the mesothelioma claims process, most of which were not proceeded with.

We also believe the Government should take urgent action to legislate to bring the Third Party (Rights Against Insurers) Act 2010 into force, and should reduce delays in the production of medical records. Both these steps would improve the claims process for mesothelioma victims”. 

Success fees

The Government’s review was into whether sections 44 and 46 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 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 may no longer reclaim from losing parties the success fees charged by their own lawyers; nor may they reclaim the cost of taking out insurance against having to pay the other side’s costs, so-called after-the-event insurance.

The Government contends that other reforms brought in to civil litigation funding arrangements, including a 10% uplift in the level of general damages for personal injury claims, will mean that claimants are likely to receive a net financial benefit, but this was contested by claimant representatives and their lawyers.

In its inquiry the Committee heard evidence that success fees charged by claimant lawyers were too high, given the degree of risk involved in bringing mesothelioma claims.

Independent review

As a result, the Committee recommends that the Government commission an independent review of the risks of success and failure of all mesothelioma cases to inform the setting of a maximum level of success fee, expressed as a percentage of costs, for lawyers representing claimants in such cases.

In the course of the Committee’s inquiry, the Association of British Insurers (ABI) provided it with a copy of a Heads of Agreement document drawn up between the Association and the Government in 2012. The ABI and the Government both argued that this document did not constitute a binding contract, and some important proposals contained in it have not been implemented.

The Committee is however critical of the fact that the Government was not open and transparent about the existence of this document, either with the Committee itself or with other participants in the debate, including mesothelioma victims themselves.

Further comments

Sir Alan Beith added:

“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. 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.”

Further information