Having spent the majority of my 25 years in the law specialising in disease litigation, one of the most heartrending things I have had to do, on more than one occasion, is tell a client who has been diagnosed with mesothelioma (or the family of a worker who has died from mesothelioma) that there is nothing I can do for them, because I have not been able to trace an insurer for the employer responsible for the exposure to asbestos.
How many of us have spent hours poring over Companies House records, carrying out ELTO searches and running adverts, only to find that no insurer can be traced and then despairing over the injustice of the situation?
The proposed compensation package and provisions of the Mesothelioma Act 2014 are aimed at rectifying this.
Under the scheme, eligible individuals will be able to apply for compensation packages which the government suggests will be worth in the region of £123,000 (less benefits) together with a further £7,000 contribution towards the claimant’s legal fees.
On a first reading this appears to be a great step forward.
Closer consideration of the wording of the act and the scheme, however, suggests that it still leaves a lot to be desired. There are a number of questions that still need to be answered.
The act states that to be eligible, the person must have been ‘first diagnosed with the disease on or after 25 July 2012’. To date, so far as I am aware, no reason has been given for such an arbitrary, fixed cut-off date for eligibility.
This date means that anyone diagnosed, or the family of anyone dying before that date, but still within the primary limitation period for a claim of this type, is not currently eligible under the scheme. Surely this cannot be fair.
I am not suggesting that the date be indefinitely extended retrospectively but at the very least the normal Limitation Act period of three years from diagnosis or death should apply.
The scheme provides for a flat-rate payment representing 80% of the average compensation received by a victim who has pursued a claim against a former employer where the insurers have been identified.
What data and for that matter whose data has been utilised to arrive at the average compensation award made in a civil claim?
For this scheme to be equitable, it is hoped that a combination of data has been utilised to arrive at this ‘average’ award.
While any scheme that means a victim who would not previously have been able to recover anything will now be compensated is to be praised, it is of concern that a victim receiving a payment under the terms of the scheme will only recover 80% of their entitlement. As the scheme is to be funded by a levy on insurance companies it will not affect the public purse – why then the discount?
The insurers have already benefited from the profits made on the premiums they have charged. By applying a 20% discount to awards under the scheme, the insurers benefit from a further ‘bonus’ for administering the scheme.
Mesothelioma is not the only asbestos-related illness. While the bill and the scheme go some way to ease the plight of those suffering from mesothelioma where an insurer cannot be traced, why is the bill and the scheme limited to mesothelioma?
As a claimant lawyer it is fair to say that most clients I see with asbestos-related illnesses have not been diagnosed with mesothelioma.
In its current form, the bill excludes anyone diagnosed with other asbestos-related illnesses such as asbestosis and pleural thickening. These claimants often face the same problem of not being able to trace a former employer’s insurer and consequently cannot recover some or all of the compensation they are entitled to. This cannot be fair. Any scheme of this type must be extended to include all compensable asbestos-related illnesses.
Department for Work and Pensions figures indicate that around 2,000 people are diagnosed with mesothelioma each year and this will continue to increase over the next 30 years. If this is the case then the number of untraced applications under the scheme will increase.
The levy as it currently stands is expected to generate a ‘pot’ of £380m. If, as the DWP expects, the number of diagnoses increases, it is doubtful that this will be enough.
There is also no indication given as to whether or not the average award will increase in line with either inflation or the level of civil awards. Allowing for a 2% annual increase, this would amount to nearly £2,500 per award next year alone and this is something that must be taken into account.
Whether the scheme will be a success is yet to be seen. Hopefully it will be, and many victims of mesothelioma will recover awards that they would not otherwise have done.
However, what remains clear is that many, if not most, of those diagnosed with an asbestos-related illness will for the foreseeable future remain unable to recover compensation if an insurer cannot be traced.
The scheme is an overdue step in the right direction but there is still more work to do.
Alan Jolliffe is senior litigation executive at IBB Solicitors