Lord Faulks, the civil justice minister, has denied that the government did a secret deal with the insurance industry on the handling of mesothelioma claims.
Labour MP John McDonnell told the justice select committee yesterday that the existence of a “heads of agreement” document between the government and the Association of British Insurers only came to light when it was sent to the committee, “probably misguidedly”, by the industry itself.
Mr McDonnell said the committee was not told about the document by the government or ministers and the industry later tried to withdraw it.
He questioned whether it could be a “pure coincidence” that after the industry’s discussion with the government, “quite a range” of its demands were implemented.
Fellow Labour MP Andy McDonald explained that under the deal the government would be rewarded for agreeing to remove the exemption for mesothelioma claims, inserted into LASPO during its passage through Parliament, allowing recoverability of success fees and insurance premiums to continue.
In return, he said the industry agreed to fund the special scheme for mesothelioma payments outlined in the Mesothelioma Act 2014 for victims cannot trace an employer or an employer’s insurance policy.
Mr McDonald said the document did not fill the committee with confidence that things had been done in “an open and transparent manner” and that no agreement had been reached “behind the scenes”.
Lord Faulks said he was not a minister at the time and had “no dealings” with the document. He said the document was “unusual” in having terms which were not implemented.
“If one looks at the government’s responses, they don’t actually agreed with all the industry required. I haven’t seen anything to suggest that any inappropriate bargaining was involved.
“This was a discussion with the industry, not a conventional contractual relationship between two commercial parties with interests which they are trying to compromise by way of an agreement.”
The minister said that the “heads of agreement” document was a list of bullet points in which “the parties came to a view on what they had agreed”. He accepted that it was “slightly unusual”.
Lord Faulks went on: “In my practice as a lawyer, I have not seen something like this quite before – not to say that it is inappropriate, but it is somewhat unusual”.
He added that the first payments under the Mesothelioma Act scheme would be made shortly, despite a judicial review hearing at the end of next month, challenging the consultation exercise carried out before the scheme was announced.