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Westminster Hall

Wednesday 16 January 2002

[Sir Alan Haselhurst in the Chair]

Asbestos Sufferers

Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. McNulty.]

9.30 am

Mr. Michael Clapham (Barnsley, West and Penistone): I am fortunate indeed in having been able to secure this debate. I am pleased to have done so because asbestos sufferers are suffering great anxiety, and what is happening in the industry is of great concern to us all. Recent actions by insurance companies, asbestos manufacturers and, in particular, the courts give sufferers the impression that there is a concerted effort to avoid liability and responsibility to those suffering from an asbestos-related disease contracted in the course of their employment and, in most cases, through negligent exposure to asbestos dust.

I have three main points. First, I want to make the Chamber aware of the size of the problem and to emphasise that it is not only historical but very current. Secondly, I want to highlight the difficulty that many people encounter in trying to establish their eligibility for an award under Department for Work and Pensions procedures, and to suggest how that process might be made easier. Thirdly, I want to refer to recent events and, in particular, to draw the attention of the Chamber to the judgment made on 11 December in the Appeal Court. I want also to suggest a way forward.

At present, asbestos dust is responsible for more work-related deaths than any other single cause—a fact that is not always appreciated. The victims are not located in any single industry, but spread throughout UK industry, although it is fair to say that there are more sufferers in industries such as ship-building, construction and energy. Asbestos-related disease creates a chronic respiratory problem for sufferers, many of whom find that their mobility is severely restricted. The dust can also cause mesothelioma cancer, for which there is no cure, and it is associated with other types of cancer which, according to the Health and Safety Commission, are on the increase.

The latest statistics provided by the HSC make a new prediction that male deaths from mesothelioma cancer are likely to peak in about 2011. I say "new prediction" because earlier predictions were based on the work of Professor Peto, who predicted that the peak would come later. The HSC, working on current cases, considers that it will be a little earlier, but I emphasise that its figures relate to male deaths. Mesothelioma deaths in women are running at about a sixth of the rate for men, and the difference is due to exposure to asbestos.

There were 1,595 deaths from mesothelioma in 1999, the last year for which figures are available, and the HSC reckons that there are one or two cases of other asbestos-related cancers for every mesothelioma case. Working from the statistical information provided by

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the HSC, the GMB union considers that about 4,000 people die in the UK annually as a result of exposure to this fatal fibre, and the number is increasing.

The reason for the increase is that the peak of exposure was in the mid-1960s, when blue and brown asbestos were used widely. After the 1960s, exposure levels seemed to fall as workers became much more aware of the dangers. I would contend, however, that one of the major factors in reducing exposure to asbestos was the Health and Safety at Work, etc. Act 1974. The Act and its associated regulations covered all workers, but the fact that it also created the opportunity to appoint workers safety representatives and set up safety committees meant that it put in place a mechanism to extend meaningful protection to workers in asbestos manufacturing.

Mr. Geoffrey Clifton-Brown (Cotswold): Will the hon. Gentleman clarify for the Chamber the statistics that he quoted? I have figures from the Financial Times of 11 December which, reporting on the case to which he referred, says:

I do not know whether the hon. Gentleman has seen that information. How does it correspond with the information that he has?

Mr. Clapham: I referred earlier to the new figures from the HSC, which relate to the year in which it expects male deaths to peak. I said that the prediction was new because the earlier work was done by Professor Peto, who believed that the peak would come later. That may be so—much of the work is based on estimates. The HSC bases its estimates on the current number of mesothelioma cases, which in 1999 was 1,595. The difference between the figure in the Financial Times and mine is merely due to the difference between the estimates from the two sources, Professor Peto and the HSC. We must bear it in mind that the HSC figures do not include female deaths.

Although blue and brown asbestos were banned in 1985, and white asbestos in 1999, it should not be assumed that there is no danger at present. In addition to its industrial use, asbestos has been used in more than 1 million public buildings, and I have seen reference to a figure of more than 1.2 million. From this year, the owners of buildings will have a duty to manage asbestos in their buildings, but workers will still be exposed to it. Electricians, plumbers, joiners and heating engineers are all likely to come into contact with asbestos and risk developing mesothelioma cancer. We know from medical evidence that mesothelioma can be caused not only by long exposure, but by intermittent exposure, to asbestos dust. The risk therefore is current, not merely historical.

Claiming benefit for asbestos-related disease or mesothelioma cancer can be a trial. I dealt with such a case about two and a half years ago, and I still represent people in medical appeal tribunals on Fridays, although not every Friday and not as often as I used to. The case to which I referred is that of Ted Dudley, deceased. After he was diagnosed as having mesothelioma cancer, we still had to prove to the tribunal that he had worked

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in an industry where he was exposed to asbestos. We had to do months of work conclusively to prove to the tribunal with engineers' reports that he had been exposed to asbestos while working as a miner. After that, he had to prove to the satisfaction of the Benefits Agency doctor that he was suffering from mesothelioma, despite the fact that he had been diagnosed as such by his own consultant.

The Occupational and Environmental Diseases Association, to which I pay tribute, has long contended that only a small proportion of people suffering from an asbestos-related disease are in receipt of an award. It will produce statistics in a forthcoming pamphlet which clearly show that. For example, it will show that while it is accepted by insurers in the United Kingdom that 80 to 90 per cent. of mesotheliomas are caused by exposure to asbestos, the number of people receiving industrial disablement benefit does not exceed 38 per cent. Moreover, the OEDA believes that for lung cancer that has been caused by exposure to asbestos, fewer than 3 per cent. of people who could reasonably be expected to receive benefit do so.

In mesothelioma cases and asbestos-related lung cancers, the current dual diagnosis procedure should be ended. Even if a man is diagnosed by the consultant treating him as suffering from the disease, he still has to go to the Benefits Agency doctors for confirmation of his condition before benefit is paid, which can take up to six or seven weeks. That time can be ill-afforded because mesothelioma victims generally have a short lifespan. A way forward would be to end dual diagnosis and use the treating consultant's report as the basis for the disablement assessment and awarding disablement benefit. Benefit for mesothelioma victims should be awarded at 100 per cent. because of their short lifespan.

As if being diagnosed with an asbestos-related disease were not sufficiently traumatic, developments in the insurance world and asbestos companies have thrown into question the likelihood of victims being able to claim compensation for that terrible disease. Last October, Chester Street became insolvent and Iron Trades was sold off, which left hundreds of pre-1972 cases in limbo. My hon. Friend the Member for Clydebank and Milngavie (Tony Worthington) raised the issue in an Adjournment debate and I shall not go over the ground that he covered. After a great deal of work by my hon. Friends, a number of whom are in the Chamber today, and the Treasury, to which I pay tribute, a scheme was worked out with the insurance industry that covered the pre-1972 cases left by the Chester Street debacle. I understand that under the scheme, the pre-1972 cases, which were a big worry, are receiving 90 per cent. of the full value of their claims.

I very much understand the disappointment of claimants who are not receiving the full worth of their claims. I had hoped that in the Chester Street case the resources apportioned by the administrator would have been added to the 90 per cent., taking the figure nearer to 100 per cent. compensation for victims, but that does not appear to be the case. Lawyers tell me that many people who suffered as a result of the Chester Street collapse have not yet received a pay-out under the scheme; the Minister may be able to check that. From

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30 November last year, the Financial Services Authority established another compensation scheme to replace the previous insurance board protection scheme.

The situation is not the fault of the claimants, who are double victims. First, they were negligently exposed to asbestos by their employers and, secondly, they were let down by the failure of insurance companies, particularly in the Chester Street case, but also in the Turner and Newall case, by the route taken by the parent company, Federal Mogul, to escape liability. The next devastating blow for claimants came when Federal Mogul filed for insolvency in the USA. My hon. Friends the Members for Manchester, Central (Mr. Lloyd) and for Leeds, West (Mr. Battle) gave the House details of that case only last week, so I need not go over them, except to say that there is a document on the web that clearly points out that Turner and Newall and Federal Mogul have taken the insolvency route to escape their responsibility to asbestos victims and their families. The Government must consider that and what route to take to address the issue seriously.

Mr. Tony Lloyd (Manchester, Central): One concern of the victims of Turner and Newall—as my hon. Friend said, they are victims because of the recklessness of asbestos companies in their heyday—is that the Federal Mogul operation not only protects the company in the United States, but may also formally protect the assets of Turner and Newall in the UK within the Federal Mogul empire, so that they will not be available for UK victims of asbestosis and mesothelioma.

Mr. Clapham: I am grateful for my hon. Friend's intervention. There is a real difficulty. As I understand it, Turner and Newall insured its own risks. In addition, its assets are now owned by Federal Mogul, an American company. Even if we can bottom the situation, there is a question about whether Turner and Newall would come under the remit of the FSA compensation scheme, so there is a genuine worry. I understand that the Treasury is working to try to bottom the issue, but it is certainly a great concern. If the victims do not fall under the FSA scheme, the Government and the insurance industry must consider how to address their situation. I shall come to that later.

The hammer blow for sufferers of asbestos-related disease was delivered in the Court of Appeal on 11 December 2001 as a result of the Fairchild case. The Court of Appeal stated that if two defendants equally exposed a claimant to asbestos, the "guilty" fibres could not be identified, so both defendants escaped liability. The judgment specifically says:

That decision effectively overturned the apportionment principle that has existed in the courts in such cases for at least 25 years. Usually, defendants would be joined and liability apportioned according to the time that the person had worked with each employer.

Mr. Mike Hancock (Portsmouth, South): Does not that judgment make it imperative that the Government introduce a national policy of compensation for asbestos workers? In most instances, particularly in the

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building industry, where people may have worked in 30 locations for a dozen employers, it is impossible to prove the source of the disease, and such people have nowhere to go in law. They stand no chance of getting compensation unless a national compensation scheme is put together by national Government.

Mr. Clapham: I agree with the last point. The court decision was a scandal. Using a brief from a causation expert, I hope to demonstrate that the court got it wrong. The difficulty is that leave to appeal to the House of Lords was refused. The decision means that thousands of victims of the fatal disease mesothelioma have been deprived of compensation. The decision was first made in the High Court and the case then went to the Court of Appeal, so asbestos victims have been in limbo for nearly two years. That decision was wrong.

Mr. John Battle (Leeds, West): In support of the case made by the hon. Member for Portsmouth, South (Mr. Hancock), the judgment on fibres is the equivalent of saying that if someone is killed by two bullets, that person is responsible or is not really dead. The courts and the companies seem to be mocking the victims. People who have already won justice in the courts cannot get the compensation that they have been awarded because of corporate gamesmanship by companies that say that they are going into bankruptcy when they are trading and making millions of pounds. We cannot wait for 10 years of extended court proceedings. We need concerted, joined-up, co-ordinated Government help to break through the proceedings, rather than allowing them to drag through the courts for ever.

Mr. Clapham: I agree entirely with my hon. Friend's comments.

I have a brief provided by a causation expert, Mr. Alan Care, of the chemical poisoning department of Russell Jones & Walker. It refers to the court decision and how it dealt with the medical evidence. Mr. Care states:

Mr. Care continues:

The brief adds:

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Dr. Ian Gibson (Norwich, North): Does my hon. Friend agree that that is just another part of the saga? Previously, the argument was that white asbestos was good enough to eat, and that it was blue asbestos that caused all the problems. That argument has had to be rejected, so the credibility of the medical and scientific establishment in the matter is akin to its credibility in the BSE tragedy.

Mr. Clapham: I agree. There is no doubt that there were people who believed that white asbestos could have been spread on cornflakes and eaten for breakfast. It was only the studies carried out in France and later by the Health and Safety Executive that identified white asbestos as a carcinogen. It may be recalled that as a result of the information gained by the French authorities, asbestos was banned in France. Following the ban, the Canadian producers took them to the World Trade Organisation. The WTO tribunal upheld the right of France to ban white asbestos because it was shown to be a carcinogen.

Mr. Clifton-Brown: Has the hon. Gentleman seen the Library brief on the case to which he referred? It might interest him. It states:

That request was made on 21 December 2001. Will he join me in hoping that their lordships expedite their decision on whether there should be an appeal, and that when the appeal is heard, it will be heard quickly?

Mr. Clapham: The lawyers will petition the House of Lords, and if the House of Lords decides to hear the case, it could be some considerable time before the case is heard. Meanwhile, the victims wait for justice. We must ensure that the case is heard speedily or that another route is taken.

I suggest to my hon. Friend the Minister that there may well be another route: a scheme devised by the insurance industry to pay compensation at the levels that the court has been determining, but possibly through some sort of no-fault liability arrangement. I do not expect an answer this morning, but I ask him to consider that proposal, discuss it with colleagues and determine whether the Government could work with the insurance industry to create such a scheme.

If that cannot be done, we need the House of Lords to consider the case, and speedily, but it must be recognised that the House of Lords may well go the way of the Court of Appeal. In that event, the issue of the victims would still have to be addressed. We would require an insurance industry-initiated scheme to be introduced speedily to pay compensation equivalent to that awarded by the courts in similar cases.

I ask the Minister to give consideration to those two courses of action: proceeding speedily to the House of Lords, or discussing with the insurance industry the implementation of an appropriate scheme to compensate the victims quickly.

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There was also some argument in the Fairchild hearing that the Pneumoconiosis etc. (Workers' Compensation) Act 1979 might enable claimants to obtain compensation. Again, I doubted whether that could happen when I first heard about it. I have received an opinion from APIL, the Association of Personal Injury Lawyers, which clearly states its view that the regulation in question would not apply to Fairchild and others in his position. A barrister member of APIL has said that claimants and their families recently caught by the Court of Appeal's decision on Fairchild have no claim under the 1979 Act, which, apparently, serves as a safety net for claimants with neither a defendant nor insurance. In the Fairchild case, there was a defendant and insurance, but no liability, so the case falls outside the Act's safety net. It may well be, therefore, that the route considered by judges in the Court of Appeal is not a way of dealing with such cases. Will the Minister consider that issue when he consults his colleagues on the best way of dealing with compensation in these cases?

Mr. Lloyd: My hon. Friend makes an important point, but does he agree that even if a route were available through the current workers' compensation scheme, the compensation would be a matter only of thousands of pounds? With proper justice, such compensation may amount to hundreds of thousands of pounds, so the scheme is not adequate in its own right.

Mr. Clapham: I agree completely. The scheme pays small amounts that are linked to weekly payments through the award system of the Department for Work and Pensions. The compensation is nothing like that paid in the courts when negligence is established. I believe that people were negligently exposed in all the cases. If there is to be a scheme, or if the pneumoconiosis compensation scheme is to be the route through which compensation is obtained, it must be significantly enhanced and pay lump sums equivalent to those decided previously in the courts. I urge the Minister, when considering any scheme, to remember that the lump sums, or even periodic payments, must be equivalent to the compensation that people are generally paid in the courts.

Mr. Hancock: The hon. Gentleman is developing his argument well, but there is an unknown factor: the countless tens of thousands of people who cannot prove the origin of their asbestos-related illness. Many such people will not have recourse to the law as they have no such proof, so they will get nothing more than inadequate sums. One of my constituents gets £22.58 a week in industrial benefits at the age of 62, for an illness that is going to kill him and is undoubtedly a result of his working career. What should happen to people who cannot prove where they contracted their illness, are not covered by any sort of insurance and cannot obtain legal redress?

Mr. Clapham: That is an important point. Indeed, it is one of the reasons why the pneumoconiosis workers' compensation scheme came into being in 1979. The scheme was introduced to provide a means of obtaining

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compensation when the responsible company had disappeared and the insurance company could not be traced. However, only pitiable sums are payable under the scheme, which needs to be considered in its entirety with a view to enhancing the payments, which are very small.

I began by saying that much is happening that gives asbestos sufferers the view that a concerted effort is being made to deprive them of their compensation. I want to finish my speech by referring to an article that appeared on 13 December in Post Magazine, which is produced for the insurance industry. The article states:

The article quotes Chris Phillips, head of insurance litigation at Halliwell Landau, which represents one of the defendants, as saying:

That shows clearly that some lawyers in the insurance industry are working not to seek justice for their defendants, but to find a route around the liabilities and responsibilities that the industry has in respect of its asbestos victims. That is a scandal.

The Fairchild case must be put in its historical context, given the scandalous way in which millions of workers in the 1950s and 1960s were exposed to asbestos in UK industry, despite the fact that the dangers were known in the 1930s, when the first legislation was introduced, and even before that. Now a Court of Appeal decision has legally deprived sufferers of the rightful route to compensation. That decision is wrong and shameful. We cannot allow it to stand and the Government must act to put in place a route for compensation for asbestos victims.

10.7 am

Mr. John Battle (Leeds, West): My hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham) has campaigned on these matters for many years and it is to his great credit that he has secured this debate. Having sat in the ministerial chair, I must say that I have never seen such a debate so well attended. That tells me that this matter should be given Government time and be properly debated on the Floor of the House, where it can be fully aired. We are discussing one of the most important and lethal legacies of the 20th century, and it will have to be dealt with in the 21st century. I have recently spoken in the House on these matters, so I shall not detain hon. Members, as I know that others wish to contribute and speak for their constituencies.

I represent a community in Armley, Leeds, where asbestos dust was blown out of the J. W. Roberts factory and on to the neighbouring streets. People who lived in the neighbourhood and played in the dust years later have contracted mesothelioma and died from it. It took us 10 years to fight the owner of the factory, Turner and Newall, which denied that it owned the company or had any records or documents, even though we unearthed 27,000 documents about what was happening. We won

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the 1995 case of Margereson and Hancock, who courageously took on the company and won a verdict saying that it was responsible for polluting them and their neighbourhood. It was a groundbreaking case. At the time, I thought that, as a Member of Parliament, I could then leave it to lawyers to do the decent thing, put the other cases forward, get the medical evidence, take them to the courts and get the compensation. Some 15 or 16 people were paid compensation, but others are in train and waiting to go through the process. Some hundreds of people are waiting. Some cases remain to be filed, while some people are waiting for medical evidence.

What happened next? From being a national company in Britain, Turner and Newall became part of a mega, multinational company—Federal Mogul in the United States of America—which started to play global corporate games and decided that it could wrap all the claims together, bury those of Armley and hold off liabilities. Consequently, even those who had won their case in court found that the cheque from the company bounced. Solicitors' letters stated that the company had been put into administration, was filing for bankruptcy and therefore did not need to respond. That process of administration could take years.

It has been reported that the company is trying to sort out the claims, but was Turner and Newall properly insured from the outset? From 1977, the board minutes show that there were doubts about its insurance. Who were the insurers? Nobody knows. When the case was won in 1995, Sir Colin Hope, the chairman of the company, said that he was confident that there was money in the kitty to pay the claims. He was confident that claims of up to £1 billion would be covered and that the victims of Armley would get the money. Where is it? Where is the money for the victims? Is it locked in administration? Why cannot we know? Why are we told that Turner and Newall's insurance cover is commercially confidential? Victims' lawyers cannot know about it.

If the company is not properly insured, it should be prosecuted. The Department of Trade and Industry should have prosecuted it in the past for illegal trading. If it is properly insured, why cannot the insurance money be made available to victims now, outside the administration process?

Games are being played in the world of insurance. We are in murky waters when we consider Turner and Newall's insurance cover. It now claims to be self-insured. I have a copy of the "General Report and Background to the Proposals of the Joint Administrators". The company went to the administrators and asked, "Please make us bankrupt", even though it is trading, getting millions of contracts every week and making millions of pounds. The report to the administrator states:

it trades from Guernsey rather than the rest of the United Kingdom—

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The report continues:

The company is trying every trick in the book to avoid its liabilities.

We need a co-ordinated, joined-up Government response that involves the Treasury as well as the Department of Trade and Industry because the victims cannot wait for 10 years of litigation. The Armley victims have won court cases that prove the company's negligence. They are not covered by the workers' occupational schemes because they did not work in the company. The employers' liability schemes would not therefore cover them. We need a separate package for them. The proposals of my hon. Friend the Member for Barnsley, West and Penistone are along exactly the right lines and further proposals could tackle matters in the interim. Victims cannot wait for years for the determination of the court cases.

The companies are engaged in corporate gamesmanship on a massive scale to evade their liabilities. In other contexts, we have discussed corporate manslaughter. We are currently considering a classic example. We are not discussing hired hands in the 19th century; people's lives have been taken and the companies walk away and are not held to account. That is wrong and scandalous, and the Government must tackle it.

Mr. George Stevenson (in the Chair): Time is not on our side, and I therefore make a plea for brevity so that as many hon. Members as possible can speak.

10.14 am

Tony Worthington (Clydebank and Milngavie): I shall try to be brief. I congratulate my hon. Friends the Members for Barnsley, West and Penistone (Mr. Clapham) and for Leeds, West (Mr. Battle) on their speeches. I want to pick up on the point of my hon. Friend the Member for Leeds, West that the Government must act more co-operatively. Sometimes there almost seems to be a conspiracy to hit the people who have suffered from such an appalling disease. Everyone appears to be lining up to beat them. They come into contact with the Government through the Treasury, the Department of Trade and Industry, the Department of Health, social security and the legal system. They receive a good service from none of them. The Government must therefore be much more proactive.

We were delighted when the Government produced a response in early May to the Chester Street debacle. However, if it had not been for a handful of Members of Parliament and for asbestos campaigners, thousands of people would have suffered from what is called the genius of capitalism, whereby companies walk away from their responsibilities and profits remain high.

We met the Financial Services Authority when we were campaigning for improvements. I am sure that my hon. Friend the Member for Barnsley, West and

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Penistone agrees that it was a bemusing experience. The FSA did not appear to understand that the matter had anything to do with it. We could not understand why the FSA had approved the Chester Street restructuring when it was obvious that the company was headed for oblivion. The FSA interpreted its duties as protecting the companies and their shareholders, not the customers and the small people who were the victims of the action. That view persists.

We subsequently met the liquidators who were checking the way in which the company had been run. Again, that was a disturbing experience because their statutory duty appeared simply to be to ascertain whether the board had taken proper advice, even it was bad, and protected shareholders' interests. They did not understand that there was something appallingly wrong in a chief executive taking more than £1 million from a failing company and thousands losing the insurance that they believed that they had. They did not appear to have a duty to consider that.

I am worried about the new scheme that the FSA introduced at the beginning of December because hardly anyone knows about it. I receive many letters from colleagues who are asking about its details. The FSA introduced the scheme without consulting Members of Parliament who campaigned on the issue, asbestos groups or victims. Document 108 sets out the scheme, but I look around the room and see people who have actively campaigned on the matter and do not know about it.

I shall not say much about the Fairchild judgment because it has been covered admirably, but it is a disaster. The law made itself an ass in that case. Everyone knows what constitutes justice. People have been poisoned by employers who knew about the risks for years. If those employers will not face up to their responsibilities, the Government must ensure that they do. I have lost faith in the courts. The Government must have a law ready to do justice to the victims.

Why will not the Government or the FSA tell us what they are doing about Federal Mogul and Turner and Newall? This company has for years flagged up the fact that it is a chancer. Clydebank suffered under a Turner and Newall company for years. It eventually went and, as always under the genius of capitalism, the public had to pick up the cost. It cost between £10 million and £12 million to make the site safe, and Turner and Newall did not pay a penny. We have to ask the Government what they are doing about this. I do not want letters from the Minister saying that they are monitoring the situation. I know what the word "monitoring" means. It means that they are lying back and hoping that nothing comes to their attention. I want something active done about Turner and Newall.

I want to raise an issue that has not been raised so far, and I shall refer here to British Shipbuilders. A press release from the Chief Secretary to the Treasury on 10 May 2001 contained the very welcome news that the uncertainty of asbestos sufferers would soon be over, due to a partnership between the Government and the insurance industry. It stated:

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That includes British Shipbuilders.

I am told—if necessary I could provide names—that British Shipbuilders is now not paying up in settled cases. In other words, it is becoming a debtor. Far from co-operating, it is refusing to pay what it has agreed to pay in judgments. Furthermore, in cases in which it had previously agreed liability, it is now withdrawing admissions of responsibility. Just what is going on? Will the Minister give me an undertaking that he will find out, and apply the necessary pressure on British Shipbuilders to act decently and honour the Chief Secretary's promise?

In several of these instances, there are implications for Government expenditure if the insurance industry and the courts do not play the game. We will have to pick up the bill. We are in danger of losing the much-deserved credit that we gained for the Government's response to the Chester Street case if we do not get these other matters right. People in my constituency ask me all the time about how the new scheme is being administered, about Turner and Newall, and about British Shipbuilders.

I would also like the Government to launch an inquiry—and to provide us with the resulting information—into whether payments have dried up, as is stated in complaints that I am receiving. That applies whether the payments were set up under the old Policyholders Protection Board or under the new arrangements. Will the Minister produce some statistics on that? What has been happening to the paying out of compensation over the last few months? Will the Minister also, through Government channels, please tell the FSA that it is simply failing to communicate to the people we represent about how it is responding to their needs. I am delighted that we have had this debate today; I wish that it could have been much longer. The turnout in the Chamber proves how necessary it has been.

10.23 am

Mr. Stephen Hepburn (Jarrow): I congratulate my colleague on securing this important debate; I also welcome the opportunity briefly to highlight a couple of issues.

First and foremost, I want to highlight the severity of asbestos-related diseases in the country and, more specifically, on Tyneside. I was also going to expose the injustice of the Fairchild judgment, but that has already been well covered today. I shall mention the case of a constituent of mine later. I do not need to explain the horrors of asbestos-related disease, because hon. Members know about that only too well from their constituents, whether through their mailbags or from their neighbours.

I do, however, want to reveal the extent of the problem. It is known that there are more than 50,000 sufferers nationally. Locally, on Tyneside, there are more than 10,000. Over the past four years, one person has died of asbestos-related disease every three days on Tyneside. This will only get worse as we come to terms with our industrial past, and with the hard life that people in shipyards, ship repair and shipbuilding—as well as building workers—have endured over the years. They never had it easy. They endured hard conditions involving night shifts, work in dock bottoms and low

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wages. When those people make claims, all sorts of blocks are put in their way by evasive employers such as Turner and Newall, and evasive insurance companies such as Chester Street. The recent judgment in the Fairchild case only adds insult to injury.

Mr. Kevan Jones (North Durham): Does my hon. Friend agree that the effect of the Fairchild judgment in the north-east has been to stop many former shipyard workers living in Jarrow and Durham, for example, getting any access to justice? The nature of the industry was that people moved around from one employer to another, and Fairchild has, in one fell swoop, stopped access to justice for thousands of former workers in heavy engineering and shipbuilding in the north-east.

Mr. Hepburn: That is an excellent point. The Fairchild judgment is unfair; it denies justice to people with mesothelioma—the cancer caused by asbestos. Workers in the shipyards and in the building industry often work for a number of different employers, so how on earth can they prove where a single fibre came from?

I want to highlight the problem by mentioning the case of a constituent of mine, Mr. William Cuskin. He worked as a painter in the shipyards for many years. He worked for a number of companies and came into contact with asbestos on a daily basis. He contracted mesothelioma and, sadly, died in August last year. He contacted me earlier last year, having sought legal advice at the time, and I am dealing with his case now. He died an agonising death, but because of the Fairchild judgment, no compensation will be paid, which is absolutely disgraceful. That is the travesty of justice that people face today. That is the main point that I wanted to raise and, as many hon. Members want to speak, I thank you for your indulgence, Mr. Stevenson.

10.27 am

Mr. Tony Lloyd (Manchester, Central): I shall be brief. I endorse the remarks made by all the previous speakers. The history of suffering in the asbestos industry has been one of companies behaving recklessly. Their consideration for their moral obligations has been so low that they deserve condemnation for their actions past and present. That must be placed on record because they are corporate fat cats who, living successfully themselves, have been quite prepared to dismiss with absolute contempt the needs of some of the most victimised people in society. We have heard this morning how large the scale of asbestos-related suffering is.

My hon. Friend the Member for Leeds, West (Mr. Battle) raised many issues about the way in which Turner and Newall is using legal devices to avoid obligation. The Government must satisfy themselves as to whether the company was legally insured under the national employers obligation scheme. That is central to the argument, because if it was not, the company should have been prosecuted for that failure, and if it was, that insurance should now kick in.

There are huge questions about the irresponsibility of the insurance industry. Insurance, by its nature, is about the taking on of risk, and about making payments when that risk goes wrong. The insurers try to ensure that they take the money at the front end, but attempt to deny

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liability in all circumstances. That is a disgrace, because, by definition, we are not talking about a group of claimants who can sit and wait for government processes, court processes and administrative and bureaucratic systems to work. People do not have that time. The lifespan of someone diagnosed with mesothelioma is about 19 months.

Mr. Hancock: If they are lucky.

Mr. Lloyd: Indeed. That means that all those people with the disease who are around at the moment will be dead before their claims are settled, unless central Government say to the insurers, "You have to do something very quickly. To do otherwise flies in the face of morality." If the Government would not let them even contemplate that flight from responsibility, they would be forced to act.

I make an appeal to the Minister: please can we have joined-up government? Will Ministers from the relevant Departments get together, so that we do not find ourselves here in a year's time saying that we are monitoring progress? We should be here in a year's time saying to the Minister and his colleagues, "Thank you very much for moving this matter forward on behalf of those people in society who deserve a lot better from those who have betrayed them."

10.30 am

Mr. Mike Hancock (Portsmouth, South): I congratulate the hon. Member for Barnsley, West and Penistone (Mr. Clapham) on having had the good fortune to be able to introduce the debate and, more important, on the consistency that he has shown in fighting this cause and bringing it to the House's attention on numerous occasions. He has displayed continued determination over getting justice for so many people.

The hon. Member for Leeds, West (Mr. Battle) referred to corporate manslaughter and I agree with him entirely. I would go further and say that there has been corporate fraud. The directors of those companies are nothing short of corporate spivs, as they have given people no support, no protection under the law and little or no opportunity to get decent compensation, which is a fundamental issue because the private sector is not the only party involved and the Government are not blameless. They are not the first to admit liability. Employees who were able to track their work record back have been denied justice and service personnel have been denied justice and told that they must claim.

The statistics are interesting. In the year up to 1998, 11,400 people with asbestos-related illnesses received industrial benefit and 12,900 claimed benefit in 1995. There is a genuine issue here: those who can claim find it difficult to get benefit because of dual diagnosis. They have to go through two hoops, as they have to get their own doctor and a consultant to agree and then convince the Benefits Agency that they have a claim to make. If they are successful, the maximum they are entitled to if they are 100 per cent. disabled because of asbestos-related illness is £108 a week. That may be topped up by other benefits, but only to a maximum of £237 a week.

I am speaking on behalf of a number of my Liberal Democrat colleagues today, and, as is the case for many Members, hardly a day goes by in my constituency

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without a coroner's court addressing a death from asbestos-related illness. That is not unique to Portsmouth, although the situation is worse in the Portsmouth area because of the high concentration of asbestos in ships and the fact that many of the 40,000 people employed in Her Majesty's dockyard 50 years ago worked with asbestos each day.

I shall give two examples of the difficulties. Mr. Winnicott of Eastney in Portsmouth worked in the building industry for 40 years. He recognised that his asbestos-related cancer was caused by working on the docks in Southampton—the very city that the Minister represents. His only benefit is £22.58 in industrial benefit. He has been to several solicitors, none of whom want to take his case on because of the difficulty of the burden of proof.

The example of Mr. Leigh Tongue shows how such a situation can arise so quickly. Mr. Tongue was a pretty formidable character who led a good life. Early in 2000, just before his death, but before he knew he was ill, he wrote to his colleagues to say that he had a great job, a lovely home, a wife he loved and who loved him and two beautiful children. He added, "Life does not get much better than this." On 29 November 2000, he was diagnosed as having cancer through asbestos. He died on 1 March 2001. He was 44. He had run in the Portsmouth command field gun crew twice and he was a physical training instructor in the Royal Navy. He had a great career in civilian life in front of him, having left the Navy.

I took the case up and the Minister wrote to me to say that Mr. Tongue's wife had redress through the benefits system. The benefits system could never replace what she lost and it is hopelessly misplaced as a solution in respect of compensation for that man's two young children. He was denied at least 20 years of working life and his family have been denied his presence for ever, yet the Government suggest that the benefits system can cope with compensation.

I want a system introduced similar to that for the mining industry. I recently asked questions about miners' compensation. On average, it takes 16 months to process a miner's claim from start to finish under the Government's scheme. In November 2001, they processed 7,000 claims totalling £47 million. The number of claims stands at 173,600; a total of 58,000 have been settled and £238 million has been paid out. There are 133,000 vibration white finger claims and £438 million is being paid out.

I want the same justice to be given to those with asbestos-related illnesses. Many suffer an agonising death and every Member in the Chamber will have had first-hand contact with constituents who went through that. I am dealing with more than 200 cases and 30 have been submitted to Ministers for them to use as a test for introducing a Government-related scheme. All 30 involve Government employment in one form or another. We may criticise private companies, but we are not blameless and it is a national disgrace that this moral obligation has not been taken up sooner.

I am delighted that so many Members are here to have their say. Many people fought their claim, but were denied justice. They went to the grave knowing that

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their families would have to continue the battle or give up. That simply is not right. We are short of time, but I am pleased to have played a part in the debate. However, I hope that we are doing more than playing a part. The Minister must take back the strong message that the majority of the House of Commons demands action to deal with this issue in the private and Government sectors.

10.37 am

Mr. Geoffrey Clifton-Brown (Cotswold): Thank you for allowing me to catch your eye, Mr. Stevenson. I shall be brief in order to give the Minister time to respond to the widespread concerns expressed in the Chamber. I congratulate the hon. Member for Barnsley, West and Penistone (Mr. Clapham) on securing the debate, and a number of Labour Members and my Liberal colleague, the hon. Member for Portsmouth, South (Mr. Hancock), on ably expressing the anxieties over this serious issue.

There were 1,595 new cases of asbestos-related disease in 1999 and 678 in 2000. Sadly, those figures are likely to represent a rising trend. The Health and Safety Commission 1993-94 annual report confirmed the continuing upward trend in deaths from asbestos-related diseases in Britain and predicted that the number of such deaths will probably increase until 2010 and possibly 2025. That is a serious problem and it will get worse.

Much has been made of the way in which Chester Insurance Holdings Ltd. was able to become insolvent and avoid its liabilities. The Government should look into that very carefully. The Financial Services Authority needs to take much tougher action in this respect. Without rehearsing the whole history of how the company went into insolvency, it is worth remembering that it was taken over by an American company whose rules on chapter 11 corporate insolvency are considerably different. It has used those rules deliberately to avoid its liabilities. Constituents of the hon. Member for Barnsley, West and Penistone and others are therefore unlikely to receive the insurance cover to which they are entitled. That is a disgrace, and the Minister should say something about it when he winds up.

I should like the Minister to comment on the various insurance schemes that are available, and on how they are working. We know that the insurance industry—through the Policyholders Protection Board—

It would be useful to know from the Minister how the two schemes are working. We know that the pneumoconiosis claims scheme in the mining industry is working quite well. There is inconsistency, in that miners can receive quite generous compensation—

Ian Stewart (Eccles): Well deserved.

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Mr. Clifton-Brown: It is well deserved. I am casting no aspersions, nor am I wishing to downplay the deservedness of miners' cases. I am merely seeking to highlight the fact that they are getting generous compensation while people with asbestos claims are suffering and are not receiving the same generous treatment for the same type or class of disease. The Government should look at the issue in the round and make sure that the two sets of claimants are receiving the same sort of compensation.

In order to give the Minister plenty of time to reply, I will bring my remarks to a close. He has much of substance to deal with. Many Members have raised concerns today about a huge issue that affects many constituents, particularly in certain constituencies. It will be interesting to hear what the Minister has to say.

10.42 am

The Parliamentary Under–Secretary of State for Transport, Local Government and the Regions (Dr. Alan Whitehead): First, I should like to congratulate my hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham) on securing the debate. The attendance and the forcefully expressed sentiments of hon. Members this morning underline the importance of the issue and the need to ensure that we deal with it in a way that provides justice and reflects the severity of certain people's plight and the speedy loss of life that can occur after mesothelioma has been diagnosed in patients.

There is a need to ensure that compensation, where it is required, is delivered speedily and effectively to those who have contracted those awful diseases as a result of their work, or, as my hon. Friend the Member for Leeds, West (Mr. Battle) has said, as a result simply of being in a certain neighbourhood where an industrial process is taking place.

I am aware of the efforts that my hon. Friend the Member for Barnsley, West and Penistone has made, and continues to make, on behalf of the sufferers of dust-related diseases. The Government are very sympathetic about the concerns that he has expressed about many issues, particularly the effect of the recent judgment of the Court of Appeal on the Fairchild case on sufferers from work-related mesothelioma who wish to claim compensation and who feel that their scope for bringing claims against employers in the courts has been reduced.

My Department has a particular interest in the matter, to the extent that we administer a scheme—the pneumoconiosis (workers' compensation) scheme—that provides for the payment of compensation to sufferers of certain dust-related diseases who are unable to obtain redress in the courts because the employer has gone out of business and there is therefore no one at whom they can direct a legal action. We have received inquiries about the effect of the ruling on the pneumoconiosis (workers' compensation) scheme, as set up by the Pneumoconiosis etc. (Workers' Compensation) Act 1979.

It is worth emphasising that, overwhelmingly these days, the compensation scheme does not provide compensation for miners. The hon. Member for Portsmouth, South (Mr. Hancock) indicated the existence of the separate miners' scheme.

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Overwhelmingly those people who are provided with compensation have not spent their working lives in the mining industry.

Members are also right to say that the number of cases and claims is rising and that that is likely to continue for some time. Indeed, the number of claims made in the last complete year of the scheme stood at almost 1,000, whereas the number of payments to date over the 20 years from 1980 is less than 10,000. Those payments are clearly going up annually at present.

It might be helpful if I outlined the Fairchild judgment and what it means. One might liken some of the considerations in the Fairchild case to the consequences of the legal proceedings following an attack on a passer-by by six hoodlums. Witnesses have said that the passer-by was beaten-up by a group that they can identify, but because they cannot state with certainty who landed the blows and kicks, no one is prosecuted. That seems to defy common sense. The Fairchild judgment—whether or not it is correct in terms of the exact legal definition—frankly seems to lack justice in terms of people's judgment of the concept of a just outcome to a certain event.

The Court of Appeal commented that for the claimants not to receive compensation was a major injustice—it said that its own judgment was a major injustice—and that it was one that should be remedied by express statutory provision or by an agreed insurance industry compensation scheme. There is a fine balance to be struck. It could be said that unfairness would have been created whichever way the Court of Appeal had ruled, resulting either in the claimants not receiving compensation or defendants having to pay damages for injuries for which they may not have been responsible.

In the six appeals that the Court of Appeal heard, it decided upon three different issues that arise in cases where a claimant suffers or may suffer asbestos-induced mesothelioma after being exposed to asbestos dust having worked for more than one employer. Historically, there have been cases where the proportion of the compensation between different employers has effectively been worked out as a method of joint payment. The Fairchild judgment appears to suggest somehow that that route produces injustice to the employer. That is not entirely in accordance with common sense.

John Mann (Bassetlaw): The funeral will take place tomorrow of my neighbour and constituent Mike Ledger. He worked for two employers, and worked with asbestos for one, Harworth Glass Bulbs, for 33 years. How could justice be served proportionately by deeming that the 33 out of the 39 years of his working life that he worked with asbestos were not relevant to the cause of his death?

Dr. Whitehead: My hon. Friend makes a powerful point. The commonsense view of what has happened to my hon. Friend's constituent would fly in the face of the direction of the Fairchild judgment. We are grappling with that issue.

The judgment suggests that as the claimant cannot establish, on the balance of probabilities, when it was that inhalation took place of the asbestos fibre or fibres that caused a mesothelial cell in the pleura to become

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malignant, he cannot show that a particular defendant was responsible for causing the disease, and cannot recover any damages. The Court of Appeal considered that the claimants could not prove on the balance of probabilities which period of exposure caused or materially contributed to the cause of the mesothelioma. Bringing a case when the case has not been made out on the balance of probabilities may impose on an employer with whom the claimant was employed for quite a short time in a long working life liability for the whole of an insidious disease. The Court of Appeal considered that allowing such a claim to succeed would be yielding to a contention that all those who have suffered injury from which someone else should have protected them should be able to recover compensation, even when they are unable to prove who was the culprit.

The Court of Appeal said that the only damages that can be claimed are for contracting the disease. Until the disease develops, the employee does not know that they have an injury capable of giving rise to a cause of action. Once it does develop, he has to establish on the balance of probabilities that the particular defendant caused the disease. None of the claimants in Fairchild could establish that.

The Court of Appeal's judgment made reference to the Pneumoconiosis etc. (Workers' Compensation) Act 1979, and the scheme that my Department administers under it. We are looking very closely—we are not simply monitoring what is happening, but are actively involved—at the implications of the Fairchild judgment on the pneumoconiosis compensation scheme and I hope to be able to let my hon. Friends know the outcome of that in due course, and at an early stage.

Mr. Clapham: It would be a travesty if the insurance industry were able to jettison its responsibility and liability and leave it with the taxpayer. If the Minister is exploring the potential use of the pneumoconiosis scheme, I suggest that discussions should be held with the insurance industry with a view to its contributing to the scheme, to enhance it so that it could make reasonable payments.

Dr. Whitehead: Discussions are being held with the insurance industry. I am sure that my hon. Friends will accept that simply introducing a Government scheme that allows all the people who have been mentioned this morning to walk away from their liabilities would not be a satisfactory way forward. It is right, as far as the pneumoconiosis scheme is concerned, that in the first instance action should be taken against former employers of people who contract one of those awful diseases. Only when it is not possible, for various reasons, to establish the liable employer does the pneumoconiosis scheme take over. That is right in principle, but we must balance it against the other point that, because of various activities, some of which hon. Members have mentioned this morning, it is possible that some people—for reasons entirely beyond their influence—will not get the compensation that they deserve, and it is important that the Government take that into account.

Mr. Kevan Jones: Does the Minister accept that some companies have gone into liquidation or otherwise

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disappeared, but others—as mentioned by my hon. Friend the Member for Leeds, West (Mr. Battle)—are using tactics such as voluntarily going into liquidation to avoid liability? They are a very different proposition from the companies that have genuinely gone bust.

Dr. Whitehead: My hon. Friend is right. I was attempting to draw attention to the general principles of the scheme, which should hold. However, in the particular circumstances in which a company has gone into administration or an insurance company has gone into liquidation, we should rightly distinguish between the generality of the principle and the specific circumstances of those cases.

Mr. Clifton-Brown: While the Government consider whether the insurance companies or the employers should bear the liability, people are suffering and many will die. Can the Minister give us some assurance that the Government will consider the problem urgently and ensure that—unlike the pneumoconiosis scheme in the mining industry—a scheme is drawn up quickly and people get the money to which they are entitled?

Dr. Whitehead: The Government are urgently considering the issue, for precisely the reasons that I have mentioned. It would not be right for the Government to stand aside while the issues are debated protractedly, to the detriment of those people who have deserving claims. At the same time, it is important that the principle of the pneumoconiosis scheme is upheld. As hon. Members have agreed, it is not right that companies that are properly liable should simply be able to walk away because a scheme has been put in place that somehow absolves them of that liability.

Mr. Lloyd: The real concern is that many crooks are involved, some of them in high places in the insurance and other companies. Will my hon. Friend undertake to bring those people together and tell them that if they do not act quickly, the Government will make them act? That is the real issue.

Dr. Whitehead: I would love to be able to do that, but frankly the situation with several of the companies is that the process of legal examination of their positions has to be gone through. The issue is the extent to which—as a result of those legal processes being pursued—injustice is meted out, simply by the effluxion of time, to people who are entitled to receive quick compensation. The Government must ensure that the issues relating to the companies are properly expedited, but at the same time we must not lose sight of the fact that people are suffering while those legal discussions are taking place.

One of the companies involved is Chester Street and I note the comments of my hon. Friend the Member for Barnsley, West and Penistone on that issue. I will ensure that the concerns he raises are investigated and I will write to him. On the question of delays in payments, under the Policyholders' Protection Board scheme the board's processes to validate the claims and make payments are usually completed within one week, once the provisional liquidators' team has brought the claim to settlement point, obtained a signed deed of assignment from the policyholder, satisfied its own tests

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to establish eligibility for protection and sent the appropriate documentation to the PPB. I share the concerns of my hon. Friend to ensure that all valid claims are paid as quickly as possible to those who are eligible for compensation. The PPB and the provisional liquidators are conscious of the need to speed up the totality of the settlement process and are continuing to work together towards that end.

Mr. Hancock: The Minister has addressed the problems in the private sector. Will he also give an undertaking to speed up the Government's response to claims lodged against them?

Dr. Whitehead: The hon. Gentleman has made that point and I am happy to write to him.

Tony Worthington: What about shipbuilders?

Dr. Whitehead: My hon. Friend mentions British Shipbuilders and I am happy to undertake to write to him. Indeed, several letters will be sent after the debate, but it is important that the issues are given proper consideration.

Under the insurance industry's scheme, it is taking a total of four to five weeks to settle and pay most claims, including a seven to 10 day turnaround at the Association of British Insurers—the ABI. The insurance industry has paid about £350,000 so far under the scheme. Occasionally, claims may be delayed beyond the time scales indicated. The provisional liquidator has a duty in the interests of the creditors of Chester Street to defend the assets of Chester Street against invalid claims. Some claims are delayed by gathering and evaluating evidence, disputes over liability, and litigation. Those delays would have happened irrespective of Chester Street's insolvency. After 30 November, the financial services compensation scheme has worked with the provisional liquidators to ensure claims which are eligible for payment by FSCS are paid as quickly as possible.

My hon. Friend the Member for Leeds, West (Mr. Battle) mentioned Turner and Newall. Unfortunately, it would take more time than we have to tease out the details of what has happened with Federal Mogul and Turner and Newall. I endorse many of my hon. Friend's comments about what has happened and the effect on those poor people who have been caught up in claims from across the Atlantic in which they have no part and with which they have no power to deal. My hon. Friend mentioned Turner and Newall last week and I know that the legal specialists are working hard to resolve the insurance position. On that occasion, the Minister replied to my hon. Friend that she had asked officials in her Department's insolvency service to keep her in touch with the progress of the case; she also invited him to discuss further with her in the Department the aspects to which he wanted to draw attention.

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