Mesothelioma (Insurance Premiums)

Kate Green Excerpts

Wednesday 29th January 2014 Westminster Hall

[Andy McDonald]

I am grateful to my hon. Friend. His intervention is apposite. There is only one respect in which I would slightly disagree with him: he says that the review is poppycock, although perhaps not in the legal sense, but we may find that there are legal consequences to it. I am of the view that it does not withstand scrutiny as a proper process. No doubt we will return to that.

Making these changes at this pace makes it abundantly clear that the Government had made their mind up way before April 2013 that these exemptions would not last any time at all. Thereafter, to try, in some tortured way, to create a link between the mesothelioma scheme as laid out in the Mesothelioma Bill and the provisions in LASPO is simply to conflate unconnected matters. If there was one American blues artist who epitomised the approach of the Government on this issue, it would be the inimitable Muddy Waters.

[Kate Green (Stretford and Urmston) (Lab)]

I congratulate my hon. Friend on securing this important debate. He will be interested to know that on 13 December, while the Mesothelioma Bill was in Committee—I was a member of that Committee—the Minister wrote to me, saying that

“the Mesothelioma Bill is relevant to the timing of the application of sections 44 and 46 of the LASPO Act to diffuse mesothelioma claims, since we have always intended to implement any such decision in a synchronised manner with other reforms directed to improving the position of mesothelioma sufferers. This was made clear when parliament agreed the relevant provisions in the LASPO Act 2012.”

Has my hon. Friend found any indication of that being made clear to Parliament in 2012? I cannot recall that happening, and I have not been able to find anything that makes it clear to me.

[Andy McDonald]

I am grateful to my hon. Friend for her intervention. Her point is absolutely valid: I have seen no evidence of that. We are trying to compare apples and pears, and it simply does not work. There should be no linkage between LASPO and the Mesothelioma Bill. We are dealing with wholly separate and distinct matters. On the one hand, we are talking about the conduct of cases where employers and insurers are known; those cases progress in the ordinary way. On the other, we are talking about a scheme to deal with cases where insurers are not traced. It is simply disingenuous and grossly insulting to sufferers to try somehow to make a link between the two, and to justify changes that will impact on the conduct of civil cases by saying that the “untraced” scheme is being progressed. If someone suffering from mesothelioma can trace an insurer, their case will proceed in the ordinary way. That others who cannot locate an insurer have recourse to a scheme has no bearing whatever on the conduct of ordinary civil cases. It would be refreshing if the Minister could make that abundantly clear when he responds to the debate, as in my view there is no integrity whatever in such an argument.

Without success fees, some cases that should run will not, as they will be too risky. Removal of the exception will result either in those cases not running, or in mesothelioma victims having to pay out of their compensation. That was clearly not the intention of Parliament, and I urge the Government to reconsider.

--- Later in debate ---

[Tracey Crouch]

I am grateful to the right hon. Gentleman for his intervention. As a strong campaigner for justice for victims, I found myself in a bizarre situation last year, in that I felt sympathetic towards the pre-action protocols originally proposed in the Government review, because I felt that they might speed up access to justice and make the process simpler for victims. As it happens, the Government ditched the pre-action protocols and will introduce measures that may take away 25% of a victim’s damages to fund the conditional fee arrangements and after-the-event insurance. I want to get as much money as possible to the victim as quickly as possible. As the hon. Member for Middlesbrough has said, once people find out that they have mesothelioma, they have little time left in their lives to plan for the financial security of their dependants because, very sadly, they often die quickly and nastily within six to nine months of contracting the illness. They will not be thinking about shopping around for after-the-event insurance or the best-priced legal fees when they are trying to deal with their horrible disease.

There is a slight irony in the fact that I am speaking about mesothelioma from notes written on cards sent to me—and, I assume, all parliamentarians—by Macmillan. This debate gives me a good opportunity to thank those who support victims of mesothelioma, such as Macmillan nurses. They deal with lung cancers all the time, but mesothelioma is quite possibly the worst that they have to deal with. It is an opportune moment to congratulate those who help sufferers of mesothelioma.

I return to LASPO. When the Bill went through Parliament, section 48 granted a welcome exemption from sections 44 and 46. Parliament had its say, and the House of Lords defeated the Government on the issue. Paul Goggins, who worked closely with the then Minister on the matter, and I welcomed the measure, and we sought assurances that if there were to be any change, Parliament would be given a say on it. Lord McNally, the then Minister of Justice in the House of Lords, made it clear that although commencement orders would be introduced by statutory instrument in the usual way and did not require the approval of both Houses,

“The amendment means that the commencement cannot begin on mesothelioma claims until a review has been carried out and a report published on the likely effect of the provisions on mesothelioma claims.”—[Official Report, House of Lords, 25 April 2012; Vol. 736, c. 1824.]

I argue that a proper review has not been conducted, and a report has definitely not been published. It is disrespectful to Parliament that a decision was made in a written statement that sections 44 and 46 would be applied in this way. If that assurance was not enough, I received a letter from my hon. Friend the Member for Huntingdon (Mr Djanogly), the Minister’s predecessor, which stated that the Lord Chancellor would review

“the likely impact of the reforms on mesothelioma cases and publish a report.”

We did our very best to secure the exemption for victims of mesothelioma during the passage of LASPO. We did so in good faith, believing that a proper review would take place and that we in Parliament—and those, including the victims, who have real concerns—would see the outcome of that review in a report. We have not yet seen such a report. That is unfair on parliamentarians and, more importantly, victims.

[Kate Green]

I pay tribute to the hon. Lady for all the work that she does on this issue, which I know is much appreciated by victims and their families. Does she agree that without such a report, it is impossible to make sense of any changes in circumstances that have occurred since the passing of LASPO? To observers from outside, there has been no reason for the Government’s complete change in direction.

[Tracey Crouch]

I agree with the hon. Lady. I understand that as part of the mechanism of government, reviews are often carried out, as a consequence of which changes may be made swiftly. When we have been promised a report so that we can assess whether the impact of the changes under LASPO will affect mesothelioma victims, I expect the victims, those who have contributed to the review, and parliamentarians who have spoken about the matter to have access to that report.

Although it might be too early to conduct a proper assessment of the effect of sections 44 and 46, we must be aware that the legal ombudsman has made it clear that the changes are causing considerable stress and excessive loss not only to mesothelioma victims but to other personal injury claimants. Mesothelioma victims are a special case, for reasons that have been outlined. The Government recognised that in their written ministerial statement, and the introduction of section 48 of LASPO indicated that mesothelioma should be considered differently from other personal injury cases.

I want to pick up on the written ministerial statement, which the hon. Member for Middlesbrough has mentioned. It referred to the Mesothelioma Bill, an important piece of legislation for those who cannot trace their insurer, which will be welcomed by the 300 or so victims every year who cannot get compensation through the civil claims process. LASPO is not relevant to the Mesothelioma Bill. LASPO deals with those who are going through the complex civil claims process, but the Mesothelioma Bill is there for entirely different reasons. If we continue to mix the two pieces of legislation—the Minister should listen carefully to this, because it would have a Treasury impact—we may end up providing a disincentive for people to trace their insurer because they find it too difficult to do so through the civil claims process. If they trace their insurer, they may lose 25% of their compensation as a result of sections 44 and 46 of LASPO. We want people to access the scheme for the right reasons, and those measures create a perverse incentive for people to access it for precisely the wrong reasons.

I was going to read the exact quote from the late Paul Goggins that the hon. Member for Middlesbrough used, in order to make the point that people find it repulsive that victims of mesothelioma could be asked to shop around to get the best deal from those who might represent them. However, the hon. Gentleman made that point perfectly adequately, and I hope that the Minister heard it the first time. We must acknowledge the fact that the report has not been published. We are not trying to be difficult with the Minister—I am certainly not. All I want is to put the victim at the centre of the process. To be perfectly honest, it does not feel like that is the case currently.

I am sure that the Minister is aware that over the past few years 15 people have died of mesothelioma in his own constituency. That is the 15 deaths that are registered; it is not necessarily the 15 people who have had secondary exposure, such as the women who washed overalls or the children who hugged their father when he came home from work. Of the 15 people who were registered, statistically two of them would not have bothered to go into the civil claims process because it is too complex. Those who have, I hope, have been adequately compensated for simply going to work and contracting a disease. The danger is that the legislative changes proposed on the Minister’s watch could mean that more people do not get the financial compensation they deserve, either because they do not go through the civil claims process, or because they do and are punished by losing 25% of what they should get to lawyers or insurers.

Our system should be simple, faster and better for victims. We know how many people have died of this disease so far; we do not know how many people will die of it in future. We do know, however, that they will die quickly. We also know that they will want to pass away leaving some sort of financial security for their dependents. I urge the Minister not only to publish the report—it is a moot point as to whether the process was conducted properly or whether the question asked was at all relevant to mesothelioma victims—but to halt the introduction of sections 44 and 46 until much further consideration has taken place.

[Ian Lavery (Wansbeck) (Lab)]

It is, as ever, a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Middlesbrough (Andy McDonald) on securing this important debate.

Before Christmas, I was a member of the Public Bill Committee that scrutinised the Mesothelioma Bill, and it really was informative. The Labour Opposition and I missed great opportunities to try to get the rightful compensation for people who have suffered greatly as a consequence of mesothelioma. As I look around the Chamber, I see people, including the hon. Member for Chatham and Aylesford (Tracey Crouch), who clearly understand how this disease affects individuals. It is as vicious as any work-related condition that anyone could experience. We must never forget the impact it has had on families and friends.

Mesothelioma is one of those diseases where once someone has been diagnosed, the prognosis is basically death within—if they are lucky—18 months. As politicians of whatever party—red, blue, yellow or whatever— we have a duty to look after people whose only crime was going to work in unsafe conditions. At the time they were very much unaware of how unsafe the conditions were. We heard tales of people—young people; apprentices—making asbestos snowballs at work and throwing them at each other, not knowing that in future it could have a dramatic impact on their lives and those of their families. The issue is really, really serious.

I cannot continue without paying tribute, as has each Member who has spoken, to the late Paul Goggins. He made a fantastic contribution to the Mesothelioma Bill Committee and was for a long time a fantastic campaigner on similar issues, particularly those related to cancer. Of course, he was especially dedicated to mesothelioma, and throughout our consideration of the Bill he was at the front, together with the Labour Front-Bench team, fighting for what was right and for justice for these people.

The Mesothelioma Bill was a missed opportunity. Once enacted, it will underpay people who are suffering—the victims. As the hon. Member for Chatham and Aylesford said, we must at all times “put the victim at the centre of the process.” Too many others have been involved, such as the insurance company that has led things from the front. During scrutiny of the Bill, the Minister in the Committee, the Minister of State, Department for Work and Pensions, the hon. Member for Hemel Hempstead (Mike Penning), said quite clearly that it was not a case of bringing the insurance companies to the table to discuss compensation; they had to be dragged there. The insurance companies have made fortunes—millions if not billions of pounds—from premiums. We must not forget that premiums were paid. It is not a case of insurance companies looking for finance that was not there: the premiums had been paid by the employers, and the insurance companies have paid out dividends to shareholders instead of keeping the money for compensating dying victims of mesothelioma.

We often forget the families. The cut-off date in the Mesothelioma Bill is July 2012. That means that millions—sorry, I am getting carried away with my figures—certainly hundreds if not thousands of people will miss out on any form of compensation. At best, the individuals affected will receive 75% of damages. It is beyond me why they have to accept that. If someone gets hurt and the employer accepts it, why should the insurance company demand that they get only 75% of what the injury is actually worth? That is absurd and should not be the case for this horrendous disease. At the same time as getting only 75% of damages, the benefits clawback is being pitched at 100%.

These people, who have suffered, are suffering greatly and will suffer in future, are confused. They are confused by our debating LASPO. These people are ill, their families are looking ahead to a lifetime without their loved ones, and they are trying to understand what LASPO and CFA mean. As politicians we should be above that. We should have ensured that the families came first, as the hon. Member for Chatham and Aylesford said. The families are not aware of what section 44 and section 46 mean. They have not got a clue and, let us be honest, they are not even bothered what section 44, section 46 and section 48 of the LASPO Act mean. What they want is justice for their families and for the person who sadly will be leaving the family within 18 months at best. The review is totally flawed. As I said in an intervention, the Government should abandon the section 48 consultation.

One reason I say that the review is fatally flawed is that the Government abandoned the consultation reforms that were relevant to sections 44 and 46. They conceded that the Mesothelioma Bill really has nothing to do with the effects of sections 44 and 46, but they said that it was always their intention to “synchronise” the section 48 review and the Bill.

[Kate Green]

Does my hon. Friend agree that that must be at best a quite cynical statement? The argument about the Mesothelioma Bill was that a deal was being negotiated with the insurance industry, and that it would not be possible to introduce a scheme to have effect prior to the conclusion of that deal on 25 July 2012. It seems that at the beginning of 2012, when the LASPO Act was passed, Ministers were envisaging a deal that did not exist, as the present justification for saying that the two can be synchronised. They cannot possibly have been waiting to synchronise with a deal that might never have come to fruition.

[Ian Lavery]

My hon. Friend has hit the nail on the head with that important point, which she raised during the progress of the Bill.

The second issue is the fact that the section 48 review did not ask respondents to make the case for the mesothelioma exemption. It asked if respondents agreed with the Government that the exemption should be lifted in the light of the consultation reforms, plus the CFA reforms and the Mesothelioma Bill. Had the Government asked for the case to be made, the recent legal ombudsman’s report on no win, no fee arrangements would have been most pertinent. The report states that the CFA agreements are not simple to understand and contain unclear terms and conditions, and that there is evidence of some lawyers failing to make clear the financial risks of CFA agreements and trying to pass on the risk to customers. That is precisely the situation that the Lords feared and would not tolerate for dying mesothelioma sufferers.

As it stands, the review is not based on the effects of sections 44 and 46 on mesothelioma claims. It is based on a reiteration of the Government’s intention to apply the CFA LASPO reforms to mesothelioma claims. That can hardly be described as a review. Members of Parliament should ask the Government to abandon the so-called review and seek a proper, fuller one.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I echo the words uttered about our former colleague, Paul Goggins. If Paul was with us, there is no doubt that he would have been in the Chamber with us today, expressing his views as passionately as he always did. Paul spoke with conviction and passion on a number of issues, and he will be sorely missed by all of us. He was a true parliamentarian, and a very decent parliamentarian at that. We will all miss him.

I congratulate the hon. Member for Middlesbrough (Andy McDonald) on securing this important debate. I commend him on the passion with which he spoke. All Members from across the political divide have spoken on this important subject with conviction and passion.

A number of issues have been raised, and I hope to be able to address some of them in the time remaining. I refer colleagues to the last sentence of the written ministerial statement of 4 December 2013:

“The Government will publish their response to the consultation, and the report under section 48 of the LASPO Act, shortly.”—[Official Report, 4 December 2013; Vol. 571, c. 56WS.]

The report is not something that is not going to appear; it will appear. I hope that hon. Members appreciate that today’s debate is in response to a request by the hon. Member for Middlesbrough. That request was made before the report was published, but it will be forthcoming.

Other issues were raised. The hon. Member for Hammersmith (Mr Slaughter) referred to comments by the Lord Chancellor. He rightly referred to consultation, and we hope to consult further with stakeholders to try to ensure that we improve the claims process. I will return to that.

[Kate Green]

I note the final sentence of the written ministerial statement. Presumably the report, which must be in the Minister’s hands by now, offered sufficient information and analysis to enable the Government to make their decision, so will he explain what has held up its publication for almost two months?

[Mr Vara]

I hope the hon. Lady will agree that, given the sensitivity and importance of the matter, it is right and proper that we should make known to the public our broad thrust of thought, rather than people having to wait a further few months before the report comes out. The hon. Member for Sefton Central (Bill Esterson) secured a debate when there was much agitation about the timing of the review, what it would say and so on. I am sorry if trying to be helpful is now being held against the Government.

Let me say at the outset that the Government recognise that mesothelioma is a terrible disease and has a devastating impact on the families of its sufferers. We take very seriously the plight of sufferers and their right to be able to claim compensation for negligently caused personal injury. The subject is, understandably, emotive, and that has been demonstrated in our heartfelt and thorough debate today, as well as during the passage through both Houses of the Legal Aid, Sentencing and Punishment of Offenders Act 2012. Debates on LASPO included consideration of the Government’s reforms to no win, no fee conditional fee agreements, or CFAs, and led to the limited exception of mesothelioma cases, to which I will return shortly.

This debate has highlighted the importance of the issue, and the Government wholeheartedly agree that, given the short life expectancy after the disease has been diagnosed, it is imperative that there is early payment of compensation when necessary. That is why we announced on 4 December 2013 that we will explore whether more can be done to improve the compensation claims process.

I appreciate that today’s debate has been about the Government’s decision to remove the limited exception from no win, no fee reforms in relation to mesothelioma cases. I want to deal with three main issues. The first is why our reforms to CFAs are the right way forward, and the second is the limited exception to these rules in respect of mesothelioma claims and the circumstances in which that exception will end; thirdly, I want to clarify the position relating to the section 48 review and how it was carried out.

I will start by setting out briefly the rationale for our changes to CFAs. Many mesothelioma claims are funded under such agreements. Legal aid has not been available for some time. The previous Government’s Access to Justice Act 1999 removed legal aid for the majority of personal injury cases, including mesothelioma cases, when alternative forms of funding, such as CFAs, were available. As hon. Members will know, the Government have introduced reforms in England and Wales relating to the way that civil cases are funded, and the costs involved in bringing those cases. Those reforms are set out in part 2 of LASPO and took forward recommendations by Lord Justice Jackson, a distinguished Court of Appeal judge.

Hon. Members will be aware that Lord Justice Jackson had been asked to investigate the high costs of civil litigation, and to make recommendations for reform. He found that the arrangements for CFAs were

“the major contributor to disproportionate costs in civil litigation in England and Wales.”

He recommended that the recovery of success fees and after-the-event insurance from defendants be abolished, saying that that would lead to

“significant costs savings, whilst still enabling those who need access to justice to obtain it.”

The Government accepted the recommendations, and they were implemented in sections 44 and 46 of LASPO, with the reforms coming into effect in April 2013.

These important reforms will generally ensure that meritorious claims can still be pursued, but at a more proportionate cost. As part of our reforms, earlier settlement will be encouraged, and damages for non-pecuniary loss, such as pain, suffering and loss of amenity, will be increased by 10%. The Government agreed with Lord Justice Jackson that the level of such damages in England and Wales was generally low, and that a 10% increase could assist claimants in meeting the costs of the success fee and other funding changes. Lord Justice Jackson argued that in the majority of cases his proposals

“should leave successful claimants no worse off than they are under the current regime”.

Those words are relevant.

During LASPO’s passage through Parliament, the Government accepted that the reforms should not be brought into effect for mesothelioma claims until a review had been carried out of the likely effect of those reforms on such cases. That review provision is in section 48 of the Act. If Parliament had intended the LASPO provisions not to apply to such claims at all, it could have legislated to that effect. In the event, mesothelioma claims were exempted, and Parliament legislated to the effect that the provisions could be commenced for claims following the conduct of a review, as set out in section 48. Of course, we must recognise that a review could lead to a number of possible outcomes—to claims continuing to be exempted from the reforms, or alternatively to the exemption not continuing.

The Government carried out the section 48 review as part of the consultation on reforming mesothelioma cases, which concluded on 2 October 2013. That was a 10-week public consultation, and all interested parties had the opportunity to participate. Some 105 responses were received from interested parties and expert stakeholders on both sides of the debate; that is the specific advantage of a public consultation. The respondents included Thompsons, the personal injury solicitors firm to which the hon. Member for Middlesbrough referred when declaring an interest at the outset of the debate.

Some respondents to the consultation questioned the timing of the review and how it was carried out. However, the Government are satisfied that it meets our obligations under section 48. The Act makes it clear that in conducting the review under section 48, the Government are required to consider the likely effect of sections 44 and 46 on proceedings on a claim for damages in respect of diffuse mesothelioma. That is what we have done.

Comments have been made about the Mesothelioma Bill and the timing of the review. As Members will know, the Government introduced the Bill in May 2013. It creates a compulsory payment scheme for victims who are unable to trace a liable employer, or liable employer liability insurer, from which to claim the damages that are rightly due. The Bill has completed all stages in both Houses and is awaiting Royal Assent. It is an important milestone in ensuring that those who were previously unable to claim can do so when the scheme is up and running.

--- Later in debate ---

[Mr Vara]

I am coming immediately to the point that I anticipated the hon. Gentleman would refer to. In conducting the review, the Government focused their consideration on matters relevant to claims for mesothelioma that are subject to litigation—in other words, where a solvent defendant is identified. The provisions of the Mesothelioma Bill, however, apply to sufferers who cannot trace a defendant to sue for compensation. If claimants are able to identify a defendant, the Mesothelioma Bill is not directly relevant to their claim, and the Government have carefully borne this in mind.

The Government have not therefore taken the Bill into account in relation to litigated cases in respect of the review. However, the Bill is relevant to the timing of the application of sections 44 and 46 of LASPO, since we have always intended to synchronise the implementation of any decision on this matter with other reforms directed at improving the position of mesothelioma sufferers. This was made clear when Parliament agreed the relevant provisions in LASPO. Much was made of that in earlier speeches, so I refer hon. Members to a debate on LASPO on 24 April 2012. The late Paul Goggins asked the then Justice Minister, my hon. Friend the Member for Huntingdon (Mr Djanogly):

“Crucially, how will the commencement of the relevant provisions of the Bill be aligned with the proposals that the Department for Work and Pensions hopes to publish before the summer recess? I would be happy to take an intervention from the Minister if he wishes to make a clear commitment this afternoon that he will not seek to implement the relevant provisions in the Bill unless and until an improved system of compensation is in place.”

My hon. Friend the Justice Minister replied:

“I do not want to give any binding commitments about the process today, because things have not been finalised. However, I can tell the right hon. Gentleman that if the process is to be improved by the Department for Work and Pensions, which we hope it will be—he will have some insight into our proposals from the discussions he has had—that could well require DWP legislation, in which case”—

the relevant words—

“we would look to roll the ending of the provisions into the commencement of the DWP provisions. That is how I foresee the process now, but again, I am not making that a commitment.”—[Official Report, 24 April 2012; Vol. 543, c. 838-39.]

The following day, the noble Lord Alton questioned the Justice Minister in the upper House, the noble Lord McNally. Lord Alton asked:

“First, is the Minister able to assure us that there will be absolute synchronisation between the Ministry of Justice and the Department for Work and Pensions to ensure that the mesothelioma provisions in the Bill will not be implemented in advance of the new regime coming into force?”

Later in the debate, Lord McNally responded:

“I can absolutely guarantee that we will work in a synchronised way with the DWP.”—[Official Report, House of Lords, 25 April 2012; Vol. 736, c. 1818 and 1824.]

The hon. Member for Stretford and Urmston (Kate Green) was present at the House of Commons debate. She made a contribution at Hansard column 834—

[Kate Green]

I accept everything that the Minister has said. Are we to conclude therefore that the connection is simply about synchronisation of timing, and not in any way about synchronisation of approach to treatment of victims, or am I misunderstanding what he is saying?

[Mr Vara]

I hope that I am clear when I say that it is important that we synchronise the timing, so that everyone affected by this terrible illness knows what the position is, whether or not they have a traceable employer or liable insurer. It is the timing that is at issue. That is what was referred to in the debates in both the upper and lower Houses.