5 December 2013Print This Post

Government backtracks on mesothelioma reforms but moves to end recoverability

Mesothelioma: insurance industry's reforms rejected after outcry

The government has responded to widespread pressure and scrapped plans to impose an insurance industry-devised mesothelioma pre-action protocol (PAP) and the fixed recoverable costs regime (FRC) that underpinned it.

But the return to the drawing board on asbestos cancer will also see claims aligned with other PI claims by ending recoverability.

The turnaround followed a consultation that ended on 2 October and to which more than 100 responses were received. The reason given by the Ministry of Justice was that “there is not a strong enough case” that the reforms “will meet the government’s declared aim of ensuring that… claims are settled quickly – where necessary – and fairly”.

From July 2014, reforms to conditional fee agreements in part 2 of LASPO that end the recoverability of success fees and ATE premiums will apply to mesothelioma claims, which were initially exempted until a review had taken place.

Explaining the decision, the MoJ said: “The government does not believe that the case has been made for mesothelioma cases to continue to be treated differently, in particular by comparison to other personal injuries, which can also have profound consequences for the sufferer.”

At the same time, a compulsory payment scheme is due to come into force, assuming the Mesothelioma Bill, which was introduced in May, receives royal assent. Victims who cannot trace their employer or its insurer will be able to draw on a £350m fund. Each year, the disease kills around 2,200 people.

The government said the insurance industry “will wish to reconsider” whether to go ahead with a consultation proposal to set up an electronic claims gateway for mesothelioma claims.

The PAP and the FRC had the backing of the Association of British Insurers (ABI) and sought to speed claims, after research showed half of mesothelioma cases took more than a year to settle, despite victims living only seven to nine months on average after diagnosis.

The FRC was fiercely opposed by the Law Society, which said it would lower the quality of fee-earner engaged in the claim and prevent the development of practitioner specialism in the area. It said it supported a PAP in principle but not the one proposed.

Also, the Asbestos Victims Support Groups Forum accused the MoJ of striking a deal with the ABI to enact its proposals for the PAP, secure mesothelioma claims gateway and fixed costs, in return for a levy to pay for claims.

As recently as last month, the Civil Justice Council questioned the need for reforms to mesothelioma claims and said it was “unfortunate” that the ABI proposals had been put to consultation “without apparent amendment”.

At the time the protocol was proposed, the then Association of Personal Injury Lawyers president Karl Tonks said “it sounds like a great idea in principle. But taking cases to the specialist mesothelioma court is usually the only way to persuade defendants and their insurers to admit liability for causing the disease, and to get the claim settled quickly.”

Responding to yesterday's decision, Mr Tonks welcomed it and said: “Recognition that the consultation proposals would not help to settle cases quickly… shows that the government has listened to impassioned arguments of victims, their families and their representatives.”

But he objected to the end of the LASPO exemption. “We argued from the outset that the cost implications of the changes could mean that some mesothelioma claims may never be brought to court at all. In those cases which do go ahead, sufferers may have to make deductions from their damages to pay their costs, which they can ill afford to do.

“We understand the government has conducted a review of this issue and we await justification for this decision.”

Courts minister Shailesh Vara said: “We will be working closely with victims, their representatives, insurers and others over the next few months to establish the best way to get claims settled fairly and quickly.”

By Dan Bindman