Department of Work and Pensions - Improving Mesothelioma Claims Handling: A Long Term Solution

Response by Thompsons Solicitors – November 2006

Thompsons is the UK’s most experienced trade union and personal injury law firm. It has a network of offices across the UK, including the separate jurisdictions of Scotland and Northern Ireland.

Thompsons only acts for trade union members and the victims of injury, never for employers or insurance companies. At any one time the firm will be running 70,000 personal injury claims.

Within each region we have a specialist asbestos litigation team. We pursue several hundred cases each year on behalf of mesothelioma victims and their families.

The firm participates regularly in government consultations on legislative issues.

 

Introduction: Thompsons and asbestos litigation

Since Thompsons achieved the first successful claim for compensation for a worker who developed an asbestos related disease in Smith v Central Asbestos Company Limited [1972] we have been at the forefront of many of the major legal challenges that have shaped the framework in which asbestos related personal injury claims are dealt with in England and Wales.

In 2002 we acted for one of the claimants in the Court of Appeal in the group of appeals collectively known as Fairchild. This year we represented one of the mesothelioma widows in the House of Lords in the conjoined appeals collectively known as Barker.

Our approach to mesothelioma claims is, and always has been, to strive to recover the maximum compensation in the shortest possible time at no cost to our individual or trade union clients. We have always refused to act for insurance companies.

Thompsons welcomes the opportunity to respond to this consultation. We believe that unfairness is inherent in the current system for compensating mesothelioma victims.

 

Achieving compensation for mesothelioma victims

Compensation may be obtained by a mesothelioma victim in one or more of the following ways:

• DWP benefits [including Industrial Injuries Disablement Benefit (IIDB), Disability Living Allowance (DLA) for Care (DLAC) and / or Mobility (DLAM) and Constant Attendance Allowance (CAA)].

• Payments under the Pneumoconiosis Workers Compensation Act 1979 (PWCA).

• A Civil claim for damages against one or more of the companies responsible for exposing the victim to asbestos negligently and / or in breach of statutory duty.

 

Full, partial or no compensation recovery

Annexe A is a table illustrating a range of typical circumstances which arise in mesothelioma claims and may result in full, partial or no recovery of compensation depending on the circumstances in which the victim was exposed to asbestos.

The outcome is subject to vagaries such as whether the victim was exposed to asbestos during the course of their employment or whether their exposure was para-occupational, such as, for example, a wife or child exposed to workers’ contaminated clothing or environmental exposure arising from, say, living in close proximity to an asbestos factory.

 

Benefits only for those exposed at work

A pre-requisite for eligibility to DWP benefits or a payment under the PWCA is that the asbestos exposure occurred during the course of the applicants’ employment.

Anyone who contracts mesothelioma from para-occupational exposure (e.g. the wife or child scenario) is excluded from entitlement to those benefits.

 

Civil compensation only for those with a solvent or insured defendant

The outcome of a civil claim for damages also depends on vagaries - whether the company responsible for the asbestos exposure still exists, whether the company has assets to meet the claim or whether the insurers on risk at the time of exposure can be traced. Thompsons’ estimate is that between 10% and 20% of mesothelioma claims fail because the company no longer exists and insurers cannot be traced.

Thompsons considers that the following changes would assist in the delivery of fairer and faster compensation to mesothelioma victims:

1. The Court Service

The mesothelioma fast track procedure in the Royal Courts of Justice (RCJ) under the management of Master Whitaker delivers effective case management which results in an almost immediate judgment in the claimants’ favour in cases where it is clear the defendant was in breach of duty, interim payments of over £40,000 within weeks of commencing court proceedings and a disposal hearing listed within a matter of months to resolve any outstanding issues in relation to the assessment of damages.

The vast majority of mesothelioma cases pursued in the RCJ fast track procedure settle without the need for a disposal hearing. With an average case duration from commencement of court proceedings to conclusion of a few months it is possible to bring most mesothelioma cases to a conclusion within a claimant’s lifetime if that is their preference.

There are increasing demands on the RCJ mesothelioma fast track procedure. It is operated by a single Queen’s Bench Master and the system is becoming overloaded. It requires greater resources.

Our experience of court centres elsewhere in England and Wales in terms of narrowing the issues between the parties and shortening the duration of the case, is that the service falls well below that delivered by Master Whitaker in the RCJ. Even court centres in which a system operates for prioritising mesothelioma claims often do little more than pay lip-service to a fast track system.

We recommend that the RCJ fast track be better resourced to enable more claims to be dealt with more quickly and / or the model developed in the RCJ is rolled out to regional centres and delivery monitored by the RCJ against set criteria such as time taken before judgement is entered, the number of interim payments, the length of time before listing and the number of cases taken to a disposal hearing.

2. The creation of an Insurance Fund of Last Resort

Since the introduction of the Employers Liability (Compulsory Insurance) Act 1969 on 1 January 1972 it has been compulsory for employers to hold liability insurance in respect of employees’ bodily injury and disease. Prior to 1972 there was widespread take up of liability insurance particularly in those industries associated with asbestos exposure such as engineering and construction where in fact most employers were insured.

The fact is that the insurance industry has collected the premiums. Since 1 January 1972 it has taken them from a captive market. That insurers cannot be traced in many mesothelioma claims is in no small part due to the insurance industry failing to keep adequate records.

An Insurance Fund of Last Resort would provide for payment of compensation in cases where the employer is insolvent and the insurer cannot be traced. Eligibility criteria for a payment from an Insurance Fund of Last Resort would be proof of exposure to asbestos in breach of duty during the course of employment with an insolvent/defunct company coupled with a negative ABI search.

Payments should be funded by a compulsory levy on the insurance industry.

3. State Compensation Schemes

(a) PWCA payments: an insurer windfall

Payments made under the PWCA to claimants who subsequently succeed in recovering damages are deducted from the total compensation due from the defendant company or their insurers. PWCA payments are not refunded to the State despite the deduction or offset being made. They are effectively a windfall for the wrongdoer or their insurer.

Thompsons recommends that the compensator should be responsible for refunding PWCA payments to the State in the same way that it is currently liable to refund relevant DWP benefits to the Compensation Recovery Unit (CRU). This would avoid the compensator receiving a windfall collateral benefit and would be an income stream to the State equivalent to the CRU recoveries.

(b) PWCA payment increase

Payments under the PWCA to claimants who submit an application during their lifetime currently range from £10,180 (for a person aged 77 and over) to a payment of £65,531 (for persons aged 37 and under).

Thompsons recommends that the payment scale be re-calibrated so that the minimum and maximum payments more logically coincide with the bracket for an award of general damages for pain, suffering and loss of amenity in mesothelioma claims as currently set out in the Judicial Studies Board Guidelines at £47,850 to £74,300. [JSB Guidelines 8th Edition]

(c) Eligibility for IIDB

Thompsons recommends that the eligibility criteria for Industrial Injuries Disablement Benefit which is presently limited to persons who have contracted the disease as a result of asbestos exposure arising out of or during the course of earned employment, should be relaxed to include para-occupational exposure such as clothing exposure and environmental exposure claims.

In many cases of para-occupational exposure there is no prospect of pursuing a successful Civil claim for damages either because the responsible company no longer exists and there is no available insurance or the court may not be prepared to find that there was a breach of duty as in the recent Court of Appeal decision in Maguire v Harland and Wolff [EWCA 2005].

There are to our knowledge no more than 100 para-occupational exposure mesothelioma cases each year. The cost of providing DWP benefits and a PWCA payment to those claimants who would otherwise have no entitlement to any compensation whatsoever would be relatively modest. However, it would remedy an injustice that Thompsons finds very hard to explain in any logical way to the wives, children and even grandchildren who have developed mesothelioma because they were exposed to asbestos through no fault of their own.

4. Eliminating the distinctions between the jurisdiction of Scotland and the jurisdiction of England and Wales in relation to the assessment of damages in mesothelioma cases.

(a) Bereavement damages

There is a marked difference of approach between the respective jurisdictions in relation to the payment of damages for bereavement.

In England and Wales a bereavement award is fixed at £10,000 for deaths occurring on or after 1 April 2002 and in mesothelioma cases is normally payable only to the spouse of the deceased.

In Scotland the equivalent award to a bereaved spouse is currently in the order of £28,000. In addition, other family members such as siblings and children each have their own right to a payment of approximately £10,000.

The compensation for bereavement received by a family who are entitled to bring their claim in Scotland will differ in value by tens of thousands of pounds compared to a family of the same size suffering similar bereavement in England and Wales. There is no logical explanation for that difference.

(b) Relatives’ claims

The Rights of Relatives to Damages (Mesothelioma) (Scotland) Bill currently before the Scottish Parliament will amend Section 1(2) of the Damages (Scotland) Act 1976 so that relatives’ claims for damages are not extinguished by a person with mesothelioma settling their own claim whilst still alive. A similar statutory amendment should be introduced in England and Wales.

Alternatively the Civil Procedure Rules should be amended to allow a claimant with mesothelioma to make an application for an interim payment by way of Part 8 proceedings if they choose not to bring the claim to a full and final settlement during their lifetime, therefore preserving the rights of others to pursue a claim of greater value after their death.

 

Annex A

Levels of Damage Recovery	Type of Claim	Status of Defendant	Insurance Status	Payments due to claimant
				DWP Benefits	DWP Benefits	Damages
Full	EL  EL  Post 1972 EL  PL	Solvent  Solvent  Insolvent  Solvent	N/a  Solvent  Insolvent   N/a	Yes1  Yes1  Yes1  No	No  Yes2  Yes2  No	100%  100%  100%4  100%
Partial	Pre 1.1. 1972 EL  Post 1969 T&N EL  Pre 1969 T&N EL  PL T&N	Insolvent  Insolvent  Insolvent  Insolvent	Insolvent  N/a  N/a  N/a	Yes1  Yes  Yes  No	Yes2  Yes  Yes  No	90%4  60%3  20%3  20%3
Nil	EL  PL	Insolvent  Insolvent	No Trace  No Trace	Yes  No	Yes  No	Nil  Nil

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 Refundable to DWP via CRU
2 Payment offset in full against damages to exclusive benefit of defendant insurer
3 Payment made at dividend of scheduled value under T&N UK Asbestos Scheme
4 Payment made by FSCS