Government attacked for siding with insurers over Mesothelioma deal

The Government has come under heavy criticism for giving far too much leeway to the insurance industry in its negotiations over the compensation scheme for mesothelioma victims who cannot trace a liable employer's insurer.

The House of Commons had its third and final reading of the Mesothelioma Bill on 7 January which ended with the Government having successfully defeated a number of potential amendments, including one to raise £4 million from the insurance industry to fund further research into all asbestos-related illnesses.

In its current planned form, the Diffuse Mesothelioma Payment Scheme will be funded by a levy on current employer’s liability insurance providers and will see victims of the incurable disease receive 75% of the compensation they would have been entitled to, had their claim ended up in court. It is hoped that the scheme will be operational from July 2014 and open to anyone diagnosed with mesothelioma after 25 July 2012.

Work and pensions Minister Mike Penning told MPs that the deal struck with insurers had to be a pragmatic one in order to get the scheme up and running as soon as possible.

But the Association of Personal Injury Lawyers (APIL) described ministers' plans as “watered-down justice”.

Jamie Hanley a partner at Pattinson & Brewer and Labour’s parliamentary candidate for Pudsey, said that he remained concerned that the Bill did not go far enough for the victims of mesothelioma.

"I believe that the reason for this is the current Government’s relationship with the powerful insurance lobby," he said.

He argued that the 75% compensation level was too low and that the levy placed on insurers to run it (at 3% of gross written premiums) should not be lowered at any time during the scheme's existence. Ministers have said that the levy will be reduced after four years, but Hanley said that extra money could be used to expand the scheme to cover other asbestos-related diseases and to increase spending on medical research into mesothelioma.

Hanley also said that the scheme should have been backdated further, back to February of 2010, and was critical of the decision to lift the exemptions that currently apply to mesothelioma victims under the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO). From July, recovery of success fees and ATE premiums from defendants in Mesothelioma claims will no longer apply.

Most commentators have said that in practice most mesothelioma victims will be charged success fees from solicitors.

"Expecting mesothelioma victims to give up 25% of their damages to lawyers as a success fee is wholly unreasonable," said Hanley.

Ian McFall, head of the National Asbestos Litigation Team at Thompsons Solicitors, also expressed disappointment over the bill's final version.

“There was cross party support for amendments which would have significantly improved the Bill for mesothelioma victims. The vast majority of Conservatives and Lib Dems voted down those amendments, such as increasing average compensation from 75% to 80%, and in doing so sided with the multi-million insurance industry rather than dying people.

“The government did a deal behind closed doors with the insurers who are huge funders of the Conservative Party and then refused to budge an inch on that deal. It begs the question whether Parliament or big business decides the terms of government policy?”

Mark Dugdale