Reforming mesothelioma claims: Response to Ministry of Justice consultation
About Thompsons
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 including approximately 600 mesothelioma cases. We have the largest specialist dedicated national asbestos litigation team in the UK with unrivalled experience from representing thousands of mesothelioma sufferers and their families.
We established the first successful compensation claim for asbestos disease in 1972 and have been at the forefront of ground breaking legal challenges in asbestos litigation ever since. In the last decade we acted for the representative asbestos victim in T&N Plc v RSA in the Companies Court, the Barker appeals and Pleural Plaques Test Litigation in the House of Lords and most recently brought the only trade union backed lead case, on behalf of Unite, in the successful Mesothelioma Employer’s Liability ‘trigger issue’ Litigation in the Supreme Court.
The firm participates regularly in government consultations.
Joint Experts’ Response
Submitted with this response at Annexe A (available in the supporting pdf) is a joint experts’ response which Thompsons was heavily involved in producing. We adopt that response in its entirety. The following commentary is the firm’s view of the process leading to the consultation and the true intent behind it.
Introduction
Summary – a corrupted consultation
Many consultations are cynical; this one has been corrupted by the relationship between the Conservative led
Government and the Insurance Industry. In adopting, without modification, a series of proposals made by the Association of British Insurers, this is not, as the Government claims, an attempt to ‘fix’, improve or speed up the system for compensating the terminally ill victims of asbestos disease. That system by and large works well, and elements of it (the RCJ ‘show-cause’ fast track, for instance) are exemplary.
This consultation’s naked intent is to reduce the amount of money paid by insurance companies. That will be by far the most significant result of these changes. All the outcomes for dying mesothelioma patients and their families will be worse: a more bureaucratic, more onerous and inherently unfair process, which takes longer and will yield lower settlements for the painfully dying and the recently bereaved.
Constructing a rationale which superficially conceals this intent has required the deliberate manipulation of data. The consultation’s central premises are based on secondary analysis of an undisclosed data set repeated requests for which have been consistently refused by Government.
The starting point is thus a set of inaccurate assertions derived from the manipulation of undisclosed statistics which fly in the face of overwhelming contrary evidence from every stakeholder group except insurance companies and those who represent them.
Every single asbestos victim support group is implacably opposed to all of these proposals.
The consultation’s spurious raison d’etre
The Ministerial foreword states that the Government “recognises that there is a special and urgent case” for reforming the way mesothelioma claims are handled. This is a specious assertion, which is not based on any independent and therefore reliable evidence.
The only stakeholders lobbying for these “reforms” are the insurance companies and their representatives. Insurers have a fiduciary responsibility to maximise profit; they are not responsible for the fair treatment of the dying and the recently bereaved. That is the responsibility of the ultimate regulator and moderator of business excess – the Government. It is a responsibility wholly neglected by this consultation.
The Minister also claims that “our priority is to ensure that mesothelioma claims are settled quickly and fairly”. Neither of these assertions are true since the real purpose and effect of these proposals will be to make the mesothelioma claims process more unfair for victims, more onerous and slow and, by reducing the cost of claims, more favourable to insurance companies.
The consultation offers no explanation at all of how the Government reached the conclusion that there is “a special and urgent case” for “reform”.
Proper analysis would show that the current system (the High Court specialist mesothelioma list) is swift, costeffective and fair. So much so that it ought to be used as a model for the litigation of other kinds of claim. Yet there is no analysis of it in this consultation, rather it is bizarrely treated as axiomatic that this innovative, quick, cost-effective system must be undermined.
The only party which benefits from undermining the existing system is the insurance companies.
The consultation’s corrupted process
The consultation simply adopts - without modification or any critical assessment by the MoJ - a series of proposals drafted by the Association of British Insurers. At the same time, the MoJ has refused to include proposals made by the Asbestos Victims Support Groups’ Forum UK, the highly respected body comprised of organisations representing sufferers throughout the UK.
Taken together, this amounts to a process which goes beyond being flawed – it is a sham. The MoJ has repeatedly refused requests to release its base data and better, indispensible, sources made available to the MoJ have been ignored.
The consultation relies on data from only two main sources: (1) secondary analysis by the MoJ of an interim data set provided by NIESR for a different purpose and (2) a limited survey by the British Lung Foundation.
The statistical evidence presented from the interim data set is demonstrably unreliable. The BLF survey is purely anecdotal and has been used in a highly selective and misleading way.
These inadequate sources and misrepresented data do not support the core assumptions within the consultation: first that around 50% of cases take more than 12 months to settle, and second that the average value of litigated cases is not significantly more than non-litigated cases.
More imaginary problems, and the real causes of actual delay
Though successful and sound at its core, the current system for settling mesothelioma claims is not impervious to improvement. Like any process, it could be beneficially refined. But because this consultation has adopted the false axiom that major delays are such a serious problem that the current system must be undermined, it makes no attempt to investigate the real causes of such delays as do occur or how they could be resolved.
The consultation assumes a main cause of delay to be the failure by claimant solicitors to gather necessary information. This is not true. There is no evidence whatsoever that this is true, and none is adduced by the Government. Even the BLF survey identifies defendant/insurer behaviour as overwhelmingly the most frequent cause of delay. The failure of solicitors swiftly to collect information was not adduced by any participant in the BLF survey as even a possible cause of delay.
Yet the first aim of the proposed Mesothelioma Pre-action Protocol - and the focus of many of its provisions - is to “encourage the provision of early and full information about the claim”. An elaborate protocol – drafted by insurance companies and adopted verbatim by the Government - is created in order to solve an artificial problem of delay. It places onerous and one-sided new duties on the painfully dying and recently bereaved and will have the effect of slowing down the process and reducing the cost of claims payable by insurance companies.
The consultation has fundamentally misrepresented the reality and chosen to ignore the real causes of delay.
The real causes of delay
In our experience, the current system (i.e. the High Court specialist mesothelioma list) generally works very well. Mesothelioma sufferers tend to be represented by specialist and experienced practitioners who understand what is required to establish a claim and where they’re not, the Master controlling the court process overtly ‘licks them into shape’, ensuring that issues in dispute are narrowed and that tight timetables are observed.
The root of almost all delay that does occur is simple, obvious: cynical delaying tactics as part of the deliberate strategy of almost every insurance company at every turn. Proper analysis would have made clear that delay is the central mechanism of a sophisticated machine constructed by insurers to avoid or limit paying compensation to the victims of mesothelioma.
Bluster as they may in protest, it is axiomatic that early settlement for the full and proper value of the claim is most insurance companies’ least favoured option. The longest possible delay in the issuing of even the most inevitable proceedings and settlement at the lowest possible level is their strongest preference. So they deliberately delay settlement, in order to wear down the dying or recently bereaved claimant, using uncertainty, anxiety, stress and risk as tactics.
Those tactics have powerful harmful effects on the painfully dying and those coping with recent bereavement and thus often succeed in driving down the figure they are prepared to accept in order to achieve closure; to ‘get the thing over with’. The proposals in this consultation are intended to make this strategy of attrition easier to operate and more ruthlessly efficient in its outcome. We have no doubt that, if implemented, it will achieve that aim. Beleaguered families and dying individuals will settle for less.
To achieve prompt settlement of claims on reasonable terms the only effective leverage against insurance companies is litigation, and the imminent threat of litigation. These proposals are designed to postpone the stage at which that leverage can be applied.
The Government should recognise that the default setting of almost all insurers in almost all mesothelioma cases is to value below a reasonable level at every stage, never to admit liability unless faced with incontrovertible evidence, never to settle until forced to do so by court proceedings or the imminent threat of proceedings. In other words, one party to almost every case is a systematically disingenuous interlocutor. How can the Government – if it is concerned with improving the claimant’s experience and the outcome for them - not apprehend this as the primary, systemic cause of delay?
The way to improve the system would be to restrict insurance companies’ ability to obfuscate and delay – whereas these proposals institutionalise and extend it. Which is not surprising, as they were drafted by the Association of British Insurers.
Squeezing victims by fixing costs
Costs are not fixed; they inevitably vary according to many factors, not least among which is insurer behaviour. That is why, when costs are disputed, they need to be independently and expertly controlled, as they currently are, by court managed costs budgeting and costs judges. In truth, concern about unnecessary legal work is not really the reason the insurance industry, through its Conservative Government proxy, is proposing a fixed recoverable costs regime. The real agenda, and likely consequence, is to use price as a mechanism to drive down the quality and experience of claimant representation and impose the burden of unrecovered legal costs on the victim and their family.
Because mesothelioma cases are complex, mesothelioma sufferers need particularly experienced, specialist solicitors. A fixed cost regime militates in precisely the opposite direction: towards the use of inexperienced solicitors, with the inevitably commensurate diminution in the quality of representation for victims, and the commensurate benefit to insurers.
A costs regime which is fixed is particularly unsuited to a legal environment which is increasingly dynamic. Mesothelioma cases are becoming more complex as the preponderant nature and extent of asbestos exposure shifts away from the direct correlation typical of traditional industrial environments to the indirect and intermittent exposure commonplace in construction trades and workplaces. Thus greater, not lesser, expertise is more vital than ever if claimants are to have access to justice and equality of arms.
A fixed costs regime would remove one of the most potent incentives for a defendant to settle quickly. On the contrary, it would encourage even greater defendant obstruction and delay, putting even more pressure on claimants to accept lower settlements than they would otherwise, contrary to the avowed aims of this consultation, but in line with its true intent.
A fixed costs regime is wholly at odds with justice, efficiency and the decent treatment of the painfully dying and recently bereaved.
The law currently incentivises settling after death
Other things being equal, claims should obviously be processed as quickly as possible. There are some occasions, though, when the swiftest settlement is not the fairest. Such instances mainly result from a quite extensive set of legal anomalies which can make it financially advantageous to claimants to settle after the victim has died. It would be better if these anomalies were removed. Until they are, though, when speed of settlement and fairness are at odds, fairness should have primacy.
Final resolution during the victim’s life will often represent a significant under-settlement of the claim, and deprive dependants (usually widows) of a substantial portion of the damages they could otherwise expect to recover in a posthumous claim.
The reasons centre around bereavement damages and funeral expenses not being payable during life, and the better treatment of bereaved dependants under the Fatal Accidents Act 1976. (This is set out in more detail in the joint experts report, which we accept and adopt).
The effect, though, is that mesothelioma sufferers are often forced to choose between settling for less during life, or dying with the uncertainty of an outstanding claim.
The obvious solutions are either to align damages for living claimants with those recoverable in claims for dependency under the 1976 Act, or to enact legislation comparable to the Rights of Relatives to Damages (Mesothelioma) (Scotland) Act 2007.
A Government serious about addressing actual problems, rather than motivated merely to protect the insurance industry, would be pursuing one of the above courses, rather than adopting the measures proposed in this consultation.
In the absence of this kind of full and fair compensation for living victims, though, there should at least be some standard provisions in the pre-action stage, where the claimant wishes, for early resolution of all issues of liability and causation; a meaningful interim payment during life; and a stay of the claim until after death.
The law should not put terminally-ill claimants in this position. But while it does, the issue must be taken into account if victims and their families are to be treated fairly and with a modicum of decency.
Conclusion
This consultation has been corrupted by the Government’s craven acceptance of a series of proposals drafted by the Association of British Insurers designed to drive down the cost of claims paid by insurance companies.
No victim group, claimant lawyers, trade union or doctor identified or accepts the need for “reform”. The only party advocating it is the only party which benefits from it – insurance companies.
The Government has adopted the Association of British Insurers’ proposals without modification or any critical assessment. At the same time, the MoJ has refused to consult on proposals put forward by those representing sufferers and their interests.
The assumptions underlying the proposals drafted by the insurance companies are wrong. They are based on unsound statistical evidence and misrepresentation of anecdotal survey evidence. The MoJ has acquiesced entirely to the agenda of The Association of British Insurers.
As the MoJ has refused to supply its raw data, the consultation uses secondary analysis of an interim data set, which has been provided by the insurance industry and withheld from everybody else.
The MoJ has made no attempt to examine the real causes of such delays as do occur.
The proposed Secure Mesothelioma Claims Gateway (SMCG), or electronic portal, will not speed up mesothelioma cases. In fact, it is likely to cause further delay and confusion. Given the complaints about the RTA Portal - a significantly more basic system than the proposed SMCG – there is very real reason to doubt its likely functional effectiveness whereas the current use of email and fax is a proven successful means of transacting business quickly and efficiently. The claimed benefits of the SMCG, such as assisting clinical research, are incoherent, speculative and entirely unconvincing. There are also serious concerns about data protection and the inappropriate collateral use of information uploaded onto the SMCG.
Fixed costs are a disingenuous attempt to drive down the quality of victims’ representation. The principle deliberately misunderstands the complexity of mesothelioma cases; and its implementation would remove a significant incentive to defendants to settle early - completely contrary to the avowed intention of these proposals.
This consultation is in no sense a review of the LASPO provisions. Nor can it be seen as consultation on the results of a review. The Minister is on record in Hansard as having undertaken to carry out a review when he exempted mesothelioma claims by delaying implementation of sections 44 and 46 of the LASPO Bill. S.48 requires those results to be published.
For it to be a proper review rather than what is before us - a deal stitched up with insurers behind closed doors - all stakeholders, including asbestos groups and mesothelioma charities, trade unions and their representatives should be able to participate fully, and it should be subject to Parliamentary scrutiny.
The Government presents the ABI proposals as a comprehensive package. In truth, there is no connection between the draft protocol, the proposed fixed costs regime and the review of the LASPO exemption other than to serve the commercial interest of insurance companies at the expense of mesothelioma sufferers and their families.
The stated aims of these proposals are not what this consultation is about. The real objectives are the opposite of what is claimed. Neither efficiency, nor cost-effectiveness, nor speed of resolution, nor the rights and comforts of the painfully dying and recently bereaved are the objects of these proposals. The single true object is to drive down the costs of claims for the benefit of insurance companies. Everything else stems from that.
This consultation is a nakedly unethical attempt to undermine and circumvent an efficient, cost-effective and fair system with no conceivably positive outcome for the interests of those suffering the tragedy of mesothelioma with whom the Government purports to be concerned. Instead the legitimate views of asbestos victims and their representatives have been treated with arrogance and disdain.
Contact details/further information:
Thompsons Solicitors
Congress House
Great Russel Street
London
WC1B 3LW