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UK: Mesothelioma – Where are we now that Royal Assent has been given?

19 February 2014
Mesothelioma is a cancer that is strongly associated with asbestos exposure. It can take up to fifty years for symptoms to show and, once they have, the prognosis is bad and treatment seeks to control symptoms and improve quality of life, rather than to cure. Mesothelioma has been in the limelight over recent years in relation to the way in which sufferers (and their dependants) can claim against past employers and their insurers.

The Mesothelioma Bill achieved Royal Assent on 30 January 2014 (the "Act").  This marks the culmination of just over 4 years of – often controversial and heated - consultations and debate. It is part of a larger review whereby the Government has been looking at mesothelioma claims overall.

The Act

The Act provides the legislative framework for the establishment of a Diffuse Mesothelioma Payment Scheme ("DMPS"). The DMPS will make payments to people with diffuse mesothelioma (and their dependants, if they are eligible) who were exposed to asbestos either negligently or in breach of statutory duty by an employer, and who are unable to bring a claim for damages against the employer or an Employers' Liability insurer.

The DMPS will only make payments to people who were first diagnosed on or after 25 July 2012 at a compensation rate of 75% of average civil compensation levels. It is currently anticipated that the first payments will start in the summer of 2014.

The DMPS will be funded by a levy on insurance companies that are currently active in the Employers' Liability insurance market. The exact details of such a levy will be dealt with by regulation and at present we are not aware of any details of this.

Whilst the Act has been welcomed by many, it has also come in for criticism from those who think it does not go far enough, for example:

  • it is argued by some that the limitation of the DMPS to those diagnosed after 25 July 2012 is arbitrary and should cover earlier diagnoses;
  • some commentators are of the view that it should cover more asbestos related diseases, not just diffuse mesothelioma; and
  • it is argued that it should also cover those who were self-employed when they were exposed to asbestos.

Mesothelioma claims reform

Alongside the Act, the Government has been consulting on proposals to speed up and improve the efficiency of the process for making civil compensation claims for mesothelioma. The consultation proposed, among other things;

  • a new dedicated Mesothelioma Pre-Action Protocol aimed at settling straightforward cases quickly and without litigation (currently many sufferers die before their claims are paid out); and
  • an industry funded secure mesothelioma claims gateway

In April 2013 when the Legal Aid and Sentencing of Offenders Act 2012 (LASPO) came into force, it ended the ability for a winning claimant to recover both a success fee under a conditional fee agreement and an after the event insurance premium, from a losing defendant. However, mesothelioma claims were excluded from this whilst the Government consulted on the impact of this new provision on mesothelioma claims.

It was announced in December 2013 that the Government would not be taking forward the proposals contained in the consultation. As at the time of writing, the Government has not published its full response to the consultation. However, of note, the Government stated that it intends to apply the provisions of LASPO to mesothelioma claims in the same way as for all other personal injury cases – they do not believe that a case has been made for mesothelioma claims to be treated differently. Consequently (and controversially), it is currently anticipated that LASPO will be amended accordingly and will apply to mesothelioma claims as from July 2014.

Where next for EL Insurers?

The provisions relating to the claims process primarily affect mesothelioma claimants; from the point of view of an Employer's Liability Insurer, a continued watch on developments will include the level of the annual DMPS levy that they will have to pay. They will also be interested in the provision in the Act which enables the Government to establish a Technical Committee to determine disputes between mesothelioma claimants and EL insurers as to whether their employer maintained EL cover with the insurer at the relevant times.





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