Compensation payments under the new Mesothelioma Act will increase over time to give victims 100% of what they are due, the Labour peer who led his party’s response to the legislation has predicted.
Attendees at a roundtable on reforming mesothelioma claims, organised last week by insurance law firm Kennedys, also heard that there is likely to be political support for extending the scheme to other types of disease.
Under the Act – which received Royal Assent on Thursday – an annual 3% levy on the insurance industry will be used to compensate an estimated 300 mesothelioma victims a year who cannot identify an employer liability policy for the period when they contracted the disease.
Under the scheme, they will receive 75% of the compensation amount they would have been awarded by a court, which was opposed by claimant lawyers and became a major point of contention during passage of the legislation through Parliament.
Lord McKenzie of Luton, who led on the Bill for Labour in the House of Lords, told the roundtable that after the scheme’s early years, as it settles down and the number of claims levels off, the levy “should enable 100% compensation”.
The peer praised the government for taking the Act forward “in a robust way”. Despite the debates about the scope of the scheme, “most important was getting it on the statute book as quickly and efficiently as possible”, he said. At the same time, he described it as “unfinished business” as the scheme could be extended in the future to include other types of diseases.
Also at the roundtable, Lee Eplett, the official at the Department of Work and Pensions who oversaw the legislation, emphasised that the levy was set at a level insurers had said they could absorb without having to pass on the costs to businesses. He warned that if there was evidence that insurance premiums were in fact rising as a result of the levy, the government would revisit the issue.
He acknowledged the difficulty that has arisen in relation to HM Revenue & Customs releasing deceased persons’ employment histories to their legal representatives; HMRC will now only do so once a court application is made. Mr Eplett said the government was looking at the problem, while a coroner was bringing a judicial review against HMRC.
Mr Eplett also drew attention to what he described as an important but sometimes overlooked aspect of the Act that provides for the creation of a technical committee that would make binding decisions on whether an insurer was on cover at the time of the claimant’s exposure to asbestos, saving the time and cost of having a court determine the question.
Mr Eplett confirmed that once it had received Royal Assent – which happened subsequent to the roundtable – the government would confirm the successful bidder for delivery of the scheme.
Kennedys partner Philippa Craven, who chaired the event, said: “We welcome the cross-party consensus that formed around establishing the scheme and the balance the legislation has achieved between its different stakeholders.
“Lord McKenzie also spoke of the importance of stakeholders getting involved in the legislative process from the start and fortified our determination to play an active and constructive role in the development of policy that affects our clients and help ensure effective legislation is passed by Parliament.”