Mesothelioma (Legal Aid Reform)

Tuesday 26th June 2012 Westminster Hall

12:59

[Hywel Williams (in the Chair)]

We now come to the debate on the effect of legal aid reform on mesothelioma victims. I call Bill Esterson—you may speak seated, if you find that helpful.

[Bill Esterson (Sefton Central) (Lab)]

Thank you very much, Mr Williams. I will stand, but it is kind of you to make the offer. It is a pleasure that the debate is being held under your chairmanship. It is an important debate, which I am sure that you and Members in all parts of the House appreciate—so far, it is mostly Opposition Members, but I know that Government Members have also indicated an interest in the subject.

I requested this debate because the Government have said that they will review the support given to victims of mesothelioma and their families following the Legal Aid, Sentencing and Punishment of Offenders Act 2012, which includes industrial diseases along with personal injury in measures to end no win, no fee litigation in the courts. The Government say that they want to stop fraudulent claims, but I believe that there is no evidence of fraudulent claims by those suffering from mesothelioma. That is the basis of this debate.

The House of Lords tried to amend the Act to exclude victims of mesothelioma from the changes to no win, no fee legislation, but the amendments made by the Lords were rejected by the Government. Instead, the Government said that they would hold a review and consider how to support victims and their families. So far, Ministers have not said what that review will consist of or when it will be held. Victims and their families need to know. When the Minister responds, he should tell the House what will happen in the review so that those suffering from that terrible disease can know and compare their evidence, so as not to lose out as a result of the end of no win, no fee.

The Government decided to include industrial diseases along with road traffic accidents in stopping no win, no fee. The implication of the change is that mesothelioma claimants are part of the compensation culture. That may well affect some personal injury claims, including whiplash, but mesothelioma victims are clearly not making spurious claims. When my hon. Friend the Member for Warrington North (Helen Jones) put that point to the Minister on 17 April, she asked him to give one example of a spurious mesothelioma claim. The lack of an answer made the point that there are none.

Let us remind ourselves of what mesothelioma does. My hon. Friend the Member for Blaydon (Mr Anderson) said in the debate in April that

“one fibre could go into someone’s lung and lie dormant for many years, but when it becomes active there is no alternative—that person suffers horribly and then they die. There is no cure, no remission and no element of survival; they die…Everybody who gets mesothelioma will die an agonising death.”—[Official Report, 17 April 2012; Vol. 543, c. 279.]

The idea that those suffering from mesothelioma could be involved in fraudulent claims is absurd and disgraceful.

[Mr David Anderson (Blaydon) (Lab)]

I congratulate my hon. Friend on securing this timely debate. Does he agree that one of the big issues is how long we must wait before we get information about how the review will start? Since we had the debate in the main Chamber, some 200 people have died of mesothelioma.

[Bill Esterson]

My hon. Friend has a long and distinguished record of fighting for those suffering from many industrial diseases, especially mesothelioma. He has made the point well: 200 people have died since the last time the issue was debated. That demonstrates the urgent need for the Minister to indicate exactly when the review will be held and how quickly it will conclude.

[Steve Rotheram (Liverpool, Walton) (Lab)]

My hon. Friend will be aware, as I am, of constituents who have unfortunately contracted asbestos-related diseases such as mesothelioma. Why are people who have terrible diseases through no fault of their own being doubly punished by the Government? Is it a case of the law of unintended consequences, or does my hon. Friend believe that they are being targeted by this uncaring Government?

[Bill Esterson]

I thank my hon. Friend and neighbour for his question, and I hope that the Minister will answer it. We could all make our guesses as to the true motives. There are well-established financial links between the Government and the insurance industry, which might be at the heart of why things are being done in the way that they are.

It cannot be right that victims of asbestos-related diseases should be required to surrender a quarter of the damages that they have been awarded to pay for legal costs. Those damages are awarded to recognise and compensate men and women who have suffered terribly, if it is at all possible to compensate them for the pain, suffering and life-shortening that resulted from their work.

Mesothelioma has an extraordinarily long latency period of up to 60 years. As well as those 30,000 who have already died in the United Kingdom from mesothelioma, an estimated 60,000 more are yet to lose their lives due to past exposure, the vast majority of which occurred at work.

[Nia Griffith (Llanelli) (Lab)]

Does my hon. Friend agree that the coffers of the Government, in the shape of the Department for Work and Pensions, will also lose out? There has always been a payment back of benefits that have had to be paid up front early on because of people’s short life span once diagnosed with mesothelioma. Does he also agree that we should be making absolutely certain that no part of the compensation is taken out? The money should be used for the victims and their families and to repay the Government. Will my hon. Friend congratulate a colleague of mine in the Welsh Assembly, Mick Antoniw, who proposes to introduce a private Member’s Bill that would compensate the NHS for its expenditure on treating mesothelioma by recovering the money from liable companies?

[Bill Esterson]

I am happy to congratulate my hon. Friend’s colleague. She is right that it is the companies that cause this terrible pain and suffering, as well as their insurers, that should bear the financial costs, although there is no way of truly compensating the victims and their families for their suffering. It should be the private industry that caused the condition, and its insurers, that pays, not the public purse.

People were exposed to this terrible disease at work in situations which employers knew would ultimately kill the workers. However, as things stand under the legislation, those same people and their families will lose a quarter of the compensation that they absolutely should receive from the insurers of those companies.

The Government rejected a Lords amendment that would have exempted mesothelioma from the provision, but they have yet to say how sufferers and their families will be protected. In all the non-answers from Ministers, they have yet to justify to thousands of families why they did not exempt mesothelioma.

Mesothelioma is an exceptional case, because the problem was known about for more than a century. Asbestos was identified as a poisonous substance in 1892 and has been banned from use in this country for almost half a century, yet employers knowingly exposed their workers to it day in, day out. They knew the dangers and ignored them for decades. They were eventually held accountable, but ever since the first successful case against employers and insurers on asbestos-related diseases, they have kept coming back to the courts and the issue has kept coming back to this place.

Mesothelioma causes intractable pain and severe breathlessness, which means that more than half of all the very modest damages claimed are for pain and suffering. The Government’s proposals would have a disproportionate effect on mesothelioma sufferers, because victims receive a higher proportion of their damages for pain and suffering than those who claim for personal injury.

The legislation requires terminally ill asbestos victims who succeed in a claim for compensation against negligent, guilty employers to pay up to 25% of their damages for pain and suffering in legal costs. They are not part of the compensation culture, nor are they legally aided, so to include them in that provision is wholly wrong. Many sufferers are so defeated by their illness that they never make a claim under current circumstances. Victim support groups have been told by victims that the change proposed would be a significant further deterrent to them making a claim at all. That would represent a big saving for the insurance industry, which therefore has the financial interest hinted at by my hon. Friend the Member for Liverpool, Walton (Steve Rotheram).

[Mr Dennis Skinner (Bolsover) (Lab)]

I congratulate my hon. Friend on raising this issue for the umpteenth time. It is always possible to tell when an issue ought to be dealt with. We fought constantly for bronchitis and emphysema to be treated as industrial diseases, and did the same with vibration white finger. In 1999-2000, we managed to get the show on the road. Mesothelioma has been debated in this place ad nauseam, which is why we can tell that it ought to be dealt with at long last. I thank my hon. Friend for raising the matter once again.

[Bill Esterson]

My hon. Friend speaks with greater experience than anyone in this House on the subject and on the issue of protecting the rights of workers who have suffered, over many years, grave injustice through industrial diseases and industrial accidents. He brings that wealth of experience from his time as a miner, and he continues to campaign tirelessly, and I applaud him for that. He is absolutely right that we have a duty to the victims to ensure that the matter is dealt with properly and that this Government are held to account. We need to hear answers today as to what will happen in that review, and it needs to be done quickly.

KPMG estimates that the insurance industry was given a £1.6 billion windfall when the Government ended compensation for pleural plaques. Unless the Government change their mind on mesothelioma, a similar windfall may be made available to the insurers at the expense of victims of industrial disease.

In contrast to other diseases, mesothelioma has only one outcome—loss of life. It is not trivial, and victims need help not hindrance. Most doctors say that the average lifespan from diagnosis to death is around nine months to one year. As one victim explained:

“My life has been turned upside down, and I really didn’t want to think about anything except spending my last days with my family. I worked all my life and paid all my national insurance and taxes, so this seems unfair.”

Mesothelioma victims, who often have just months to live, should not be expected to devote their energies to finding the lawyer with the best deal, yet that is what the Government expect them to do. Asbestos-related disease is not an accident. It is the result of negligence and lack of duty of care.

The claims of dying asbestos victims are never frivolous or fraudulent, but they are lumped in with road traffic accident claims that make up more than 70% of personal injury claims, for which the Government and insurance industry suggest that conditional fee agreements have been exploited. Between 2007 and 2011, there was a 6.6% reduction in employer liability cases, of which most respiratory claims are a subset. During that same period, road traffic accidents increased by 43% to nearly 800,000 cases. It is expected that mesothelioma claims will peak in about 2015, as asbestos has been eliminated from the working environment. Unscrupulous claimants may be able to fake road traffic injuries, but not mesothelioma or asbestosis. Road traffic accident problems will not be solved by punishing asbestos victims.

Mesothelioma sufferers who make a claim mainly do so because they and their families will not be at risk in terms of legal costs, which, without no win, no fee agreements, would be prohibitive. A claim may be valued at between £5,000 and £10,000, which is of great importance to the individual concerned, but which could be eaten up in costs and premiums under the Government’s plans. Mesothelioma sufferers would lose the whole of their compensation simply by not taking any action, which, as we have heard, is increasingly likely if no changes are made. Their access to lawyers would be restricted by making success fees unrecoverable from defendants, putting them at risk of paying defendants’ costs if they lose. Victims are already reluctant to claim because they have so many problems dealing with their rapid deterioration in health and trying to survive. The risk that if they lose they will have to pay such costs would be a massive additional hurdle for some of our most vulnerable people, to whom a decent, civilised society should and would guarantee support.

We should not forget that compensation is already significantly reduced for many sufferers. They must not only provide evidence of heavy exposure dating decades back, but forgo that portion of compensation where insurers cannot be traced for employers that are no longer trading. As insurance companies fight mesothelioma cases to the end, often trying to elongate the case until the victim dies, the cost of after-the-event insurance can be huge. As that will also be unrecoverable under the Government’s plans, there is no prospect of claimants being able to afford the premiums. The Government’s one-size-fits-all approach in the legislation is wrong. It may work for some personal injury claims, but is not effective in the case of complex industrial disease cases such as those involving mesothelioma.

[Paul Goggins (Wythenshawe and Sale East) (Lab)]

My hon. Friend has given a graphic description of the pain and suffering faced and experienced by mesothelioma sufferers. He is describing the impact that the legislation would have on mesothelioma sufferers if, following a review, it was fully implemented for that group. He has mentioned several times the review that the Government have offered as part of the concession that they made while the Bill was passing through Parliament. Does he agree that it is essential that that review fully engages with mesothelioma sufferers and their families and especially the support groups, such as the Asbestos Victims Support Groups Forum UK, which has done so much to make the case on behalf of mesothelioma sufferers?

[Bill Esterson]

I thank my right hon. Friend for his intervention. I completely agree with him and will come shortly to what we need in the review.

For mesothelioma sufferers, unwarranted and fatal risks have been taken unknowingly, so the correct function of the legal system in such cases would be to restore victims to the position that they were in before diagnosis and to make provision for them and their families. Terminally ill and dying people will have other things on their mind than looking for a lawyer to give them a good rate, so there will not be greater competition, driving costs down, as the Minister claims. There is in fact no evidence that lawyers will reduce costs, as lawyers themselves will be less likely to take these cases because they risk not being able to recover costs if they lose or they face the dreadful prospect of having to recover those costs from their clients in a situation in which they have just lost in terrible circumstances.

Making changes to rules on compensation is no motivation or incentive for mesothelioma sufferers. One sufferer has said that

“no amount of compensation could ever compensate for my husband’s suffering and loss of life. To even contemplate this is wrong. My husband’s suffering has ended but still I have terrible images of his horrific suffering which I cannot erase…My husband was poisoned going to work. I hope this Government remembers that!”

At all stages of consideration of the legislation in this House and in the House of Lords, the fallacy of the Government’s position on industrial disease was pointed out. Twice the Lords voted on amendments to this effect:

“The changes made by sections 43, 45 and 46 of this Act do not apply in relation to proceedings which include a claim for damages for respiratory disease or illness (whether or not resulting in death) arising from industrial exposure to harmful substance.”

The Government were forced to reconsider their position and they agreed to an amendment, which brings us to the point of today’s debate. This is the amendment:

“Sections 43 and 45 and diffuse mesothelioma proceedings

(1) Sections 43 and 45 may not be brought into force in relation to proceedings relating to a claim for damages in respect of diffuse mesothelioma until the Lord Chancellor has—

a) carried out a review of the likely effect of those sections in relation to such proceedings, and

b) published a report of the conclusions of the review.”

Since then, the nature of the review, its timing, its terms of reference, how it is to be conducted and who is to be consulted have been raised several times. I have raised those matters myself with Ministers, as have the Labour Front-Bench team. When agreeing to the compromise, my right hon. Friend the Member for Tooting (Sadiq Khan) said:

“We need assurances it will be truly independent and not just a whitewash. We also need confidence there’ll be sufficient time allowed to see how the changes brought about impact on other successful claimants before rolling them out for mesothelioma sufferers.”

Given the Government’s conduct throughout, it is not surprising that we and those who represent mesothelioma sufferers, and the victims themselves, are sceptical about the Government’s promise. Today is an ideal opportunity, which I hope the Minister will take, to address the doubts of everyone who has concerns about mesothelioma. Anything less than a fully independent and thorough review of the potential effects of limiting claims will not be within the spirit or the letter of the amendments agreed to, which enabled the Government to get their legislation through. I hope that we will not hear generalities or evasions from the Minister. A clear commitment to do justice for the victims of this terrible disease is the least we can expect.

I therefore ask the Minister these questions. When will the review take place? Who will be part of the review body? What will its terms of reference be? No doubt it will include representatives of the insurance industry, but who will be the victims’ representatives? Will the review be truly independent, by which I mean independent of the insurance industry?

Concern remains that the change to no win, no fee will cut the number of people claiming and the amount being paid by insurance companies. The insurance industry has a clear financial interest in cutting down the amounts paid out. How will the Minister or his colleagues ensure that that interest is balanced by how the review is run? Will he consider an independent panel to examine mesothelioma and compensation for victims and their families? Will he and his colleagues consider the call for an employers’ liability insurance bureau following the pattern of the Motor Insurers Bureau? We must ask why there is such a facility for traffic accident victims but not for those suffering from mesothelioma or other industrial diseases.

Victims and their families want answers and protection. They have a right to that protection, given the suffering that they go through. It is time that Ministers gave answers about how that protection will be guaranteed, and soon, by this Government.

13:21

[The Parliamentary Under-Secretary of State for Justice (Mr Crispin Blunt)]

I apologise for the absence of the Under-Secretary of State for Justice, my hon. Friend the Member for Huntingdon (Mr Djanogly), to whom this debate would normally fall, but he is serving on the Committee that is considering the Defamation Bill. I congratulate the hon. Member for Sefton Central (Bill Esterson) on securing this timely debate. He asked wholly appropriate questions and I hope to be able to give him some of the satisfaction that he seeks, and some guidance for claimants and their families on the circumstances that we are in.

I say gently to the hon. Gentleman that I slightly regretted the tone of his speech. To suggest that concern about the issue is located on one side of the House and not the other is a little wide—

[Bill Esterson]

Will the Minister give way?

[Mr Blunt]

No, because otherwise I will not have time to put the necessary points on record.

[Bill Esterson]

You made an allegation.

[Mr Blunt]

The sister of my right hon. Friend Lord McNally, the Justice Minister in the House of Lords, died of that disease, and my father died of respiratory disease. I assure the hon. Gentleman and all his hon. Friends—

[Andrew Bingham (High Peak) (Con)]

Will the Minister give way?

[Mr Blunt]

I will not, if my hon. Friend will forgive me, because I need time to put on record all the things that I think are important for mesothelioma sufferers, for whom concern is, very properly, universal.

Mesothelioma is a terrible disease. We recognise its devastating impact on sufferers and their families, and we take extremely seriously the plight of sufferers and their right to claim compensation for negligently caused personal injury. As was clear from the way in which the hon. Member for Sefton Central spoke, this is an emotive subject. This debate highlights the importance of the issue, and the hon. Member for Bolsover (Mr Skinner) also made that clear.

I will deal briefly with three main issues: first, why our reforms to conditional fee arrangements are the right way forward; secondly, why we are taking an exceptional course in respect of mesothelioma claims, and the circumstances in which that exceptional course will be managed once we have improved the position for sufferers who cannot trace their employer’s insurer; and, thirdly, how some reforms have lowered the barriers for claimants in recent years.

On the rationale for conditional fee arrangement reform, it is important to make it clear that our current legal aid reforms do not affect mesothelioma cases, as legal aid is not generally available. The Access to Justice Act 1999 removed legal aid for the majority of personal injury cases, including mesothelioma cases, where alternative forms of funding such as conditional fee arrangements were available. As the hon. Member for Sefton Central will be aware, the Government are implementing the recommendations in Lord Justice Jackson’s review of civil litigation costs, and particularly a fundamental reform of no win, no fee CFAs. Part 2 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 implements those reforms.

Lord Justice Jackson concluded that the current arrangements, under which success fees and after-the-event insurance premiums are payable by the losing side, in addition to standard legal costs, are a major contributor to the high costs of civil litigation, and that it was right in principle to change the arrangements across the board. The truth is that the current system is indefensible. It has turned out to be a racket for lawyers, which is why it is changing. The new system will assist the execution of meritorious claims rather than supporting a claims-management industry.

The Government are committed to addressing disproportionate costs throughout the whole of civil litigation, and the provisions in part 2 of the Act will deal with the unfairness that currently exists in the system between claimants and defendants. These important reforms will ensure that meritorious claims can still be pursued, but at a more proportionate cost. As part of the reforms, earlier settlement will be encouraged and damages for non-pecuniary loss, such as pain suffered and loss of amenity, will be increased by 10%. In time, the reforms will apply to all areas of civil litigation—that was what Lord Justice Jackson recommended, and the Government agree.

The Government are certainly not suggesting that mesothelioma claims are brought inappropriately. Indeed, such claims are often among the easiest in which to establish base merit. I want to be absolutely clear, in response to the tone of the remarks made by the hon. Member for Sefton Central, that these claims are, of course, not part of the compensation culture—no one has suggested that they are. They are, however, part of a process of civil litigation that has to be reformed.

On the temporary exception from conditional fee arrangement reforms for mesothelioma claims, we announced that the relevant provisions in part 2 will come into force in April 2013. In particular, sections 44 and 46 abolish the recoverability of success fees and after-the-event insurance costs from the losing side in all categories of case in which they are currently used. We are, however, deferring implementation in relation to mesothelioma claims until we are satisfied on the way forward for those who are unable to trace their employer’s insurer. I am sure that the hon. Gentleman understands the crucial importance of that.

A number of reforms in recent years have improved the position of mesothelioma sufferers by lowering the barriers to bringing claims. In particular, the Employers’ Liability Tracing Office, which was introduced in April 2011, is designed to be a comprehensive online resource of current and historical employers’ liability policies, thus making it easier for claimants to find the relevant insurer. The database is updated with the results of any new traces, so its size and utility continue to increase. We recognise, however, that there remains a gap where sufferers cannot trace their employer’s insurer. The Department for Work and Pensions is therefore in discussions about the way forward for stakeholders. Primary legislation might be required, but I anticipate that my noble friend Lord Freud, who is working on the matter, will make a statement before the summer recess. If primary legislation is required, however, the hon. Member for Sefton Central and other hon. Members will understand that that will take a considerable period of time.

I can give a commitment that we will consider all the factors raised today when we come to set out the review’s terms of reference. I cannot, however, set out those terms of reference or a timetable, because any review may not happen until we have identified any primary legislation that might be required. Additionally—the hon. Gentleman made this point, and it has also been made by the right hon. Member for Tooting (Sadiq Khan)—that means that the review will occur against the backdrop of a substantially changed conditional fee arrangement market, so we will of course consider the effect of those changes as part of the review.

I have rather more to say, but I regret that I will not be able to do so, given that, understandably, the hon. Gentleman took interventions during his speech. Nevertheless, I have put on the record the substantive responses that he was seeking from the Government.