The government has insisted it got the best deal possible in negotiating with insurers for a compensation scheme for mesothelioma sufferers.
Work and pensions minister Mike Penning successfully steered the mesothelioma bill through parliament this week to create a scheme to compensate victims who cannot trace their insurers.
The scheme will be funded by an industry-wide levy on current employer’s liability insurance providers and will also ensure greater research into a cure for the disease.
But the government had to defeat a series of amendments and accept a deal from insurers which means mesothelioma sufferers will receive 75% of the compensation amount they would have received if the matter had gone to court.
Penning was criticised by MPs during the debate in the House of Commons on Tuesday for the terms of the deal but said he had to be ‘pragmatic’ to ensure the scheme is started quickly and victims get immediate redress.
Penning said: ‘The insurers did not come happily to the table to have this discussion. When the discussions with [work and pensions minister] Lord Freud started, they were told to come, and the negotiations were based on what we could get agreement on without putting a further burden on business.
‘We have to look at the context. Nothing had been done for so long, but now something is being done and the insurance companies are not happy about it.’
He added: ‘I am restricted by the maths and our agreements. Could the insurers afford this? I have no doubt whatsoever that they could, but that is not the deal that has been struck. As has been said, the house could decide to set the limit at 80%, but I want this bill to receive royal assent and for compensation to be paid in July.
‘That is not happening at the moment and it has not happened for years. Could it be better? Yes, it could.’
Penning added that to take the scheme back to the start of the consultation in 2010 – as suggested by one proposed amendment – would cost an extra £80m.
Penning and his colleagues were accused by Labour MP John Woodcock of having ‘blinked too early’ in negotiations with the insurance industry.
His Labour colleague David Anderson added: ‘I appreciate the work the minister has done but this debate saddens me. We have got a situation where employer liability was paid to these insurance companies. They have had their money and they have run with it.’
He added: ‘[The insurance industry] have bankrolled [the Conservative] party for decades, and they have bankrolled his constituency and those of hundreds of Conservative members across the country. If a trade union had exerted that much influence, we on this side of the House would have been nailed to the wall.’
The bill has drawn an angry response from lawyers who represent mesothelioma victims.
Matthew Stockwell, president of the Association of Personal Injury Lawyers, acknowledged the scheme was a ‘valuable first step’ but he opposed the terms agreed.
‘It is bad enough that victims are exposed to deadly asbestos just by turning up for work, then forced to use this scheme because insurance records are no longer around. Now they are to be penalised by losing a quarter of what the courts determine is fair redress. This is not the justice these people deserve.’
Paul Glanville, asbestos lawyer at national firm Slater & Gordon, said: ‘The scheme is certainly a step in the right direction but there can be no moral justification for mesothelioma victims receiving only a percentage of the compensation they are entitled to.
‘Further whilst this new law provides some compensation for mesothelioma victims diagnosed after July 2012 it ignores the thousands of victims who have died before this arbitrary cut-off date.’