House of Commons - Trade and Industry

Select Committee on Trade and Industry Fourteenth Report

2 Background to the coal health schemes

4. There are two schemes, both of which are now closed to new claims. The scheme for those suffering from 'Vibration White Finger' (VWF) disease (now called Hand Arm Vibration Syndrome) caused by using vibrating tools closed at the end of October 2002. Vibration White Finger is a condition which affects the hand or hands to varying degrees of severity with symptoms falling within two broad categories, vascular, induced by cold intolerance, and sensorineural, which include reduced dexterity, numbness and tingling. General damages are payable in respect of the condition varying according to the age of the claimant and the severity of the disease. In addition, where proven damages may also be payable for handicap on the labour market, for the inability to undertake tasks (or services)—for example, DIY, gardening, basic car maintenance—and for wage loss.

5. The Chronic Obstructive Pulmonary Disease (COPD) Scheme considers claims from miners suffering from respiratory disease (chronic bronchitis and emphysema) resulting from work in the dusty conditions found in a mine. This scheme closed at the end of March 2004.

Implementation of the schemes

Handling Agreements

6. By 1999 a Handling Agreement had been negotiated for each scheme with solicitors representing the large numbers of firms involved. Each Agreement defined the role and responsibilities of claimants' solicitors; the DTI's claims handlers and medical assessors; and any others involved in the process; the fee due to claimants' solicitors for handling their case; and laid down the medical assessment process (MAP) to be followed in each case. We were told that both agreements were underpinned by the principle that each claimant should receive the compensation he would have expected to get if he had pursued his claim under common law through the courts, and were designed to give claimants a fair entitlement tailored to reflect their disability.[6]

7. The Handling Agreements were approved by the judges concerned who are still in overall charge of the process of paying out the compensation. The DTI reports back regularly to the judge on progress (3-4 times a year for each scheme). The Handling Agreements are contracts between the DTI and the miners' solicitors. Any changes can only be introduced by mutual agreement.[7] Separate Handling Agreements were signed with the Union of Democratic Mineworkers (UDM), a fact which drew criticism from the English Monitoring Group and the CSG.[8] However, the Parliamentary Under-Secretary of State assured us that these Agreements were identical to those signed with the Claimants' Solicitors Groups except for the levels of costs paid, which were lower as the UDM handled claims through their own claims handling agent.[9] The same offer had been made to the National Union of Mineworkers.[10]

Delivery

8. We were told that claims were registered on behalf of claimants (or if deceased, their relatives) by solicitors, who are represented by the Claimants Solicitors Groups (one Group for each scheme). Capita-IRISC now acted as the DTI's claims handler. The medical assessment procedures for both COPD and VWF claims were handled by the DTI's appointed medical assessors, Atos Origin. In addition, the specialised MAP2 for VWF claimants who claim for Services—additional assistance in carrying out household tasks such as gardening and DIY—was conducted by Capita Health Solutions.[11]

The process

9. A detailed representation of the claims and assessment processes was given in Figures 1 to 3 of the DTI's memorandum.[12] To begin the claims process, each claimant completed an application pack, which was lodged with a solicitor who registered it with IRISC, a company now owned by Capita following the takeover of responsibility for administration of the schemes from Aon-IRISC. Capita-IRISC requested the British Coal employment and other records from Iron Mountain, a document storage company employed by the DTI to store these data, which are the property of the Department.[13] Thereafter, the process varied according to the type of claim being made. For each scheme, however, there was an agreed disputes resolution procedure. Claimants also retained the right to pursue a common law claim should they so wish.

VWF claims

10. For each VWF claim, the occupational history of the claimant was used to determine if there was a valid claim for VWF. If this was established, the claimant was invited to undergo the medical assessment, which would include a secondary assessment (MAP2) if assistance for services had been claimed. Once the MAP had been completed, the results were provided by IRISC to the solicitor, and settlement should be reached using a model based on the time over which the claimant was exposed to vibrating machinery. The Handling Agreement for VWF identified three occupational groups for the purpose of determining the level of compensation payable:

— Group 1 - where vibratory tools were generally recognised as a substantial part of the occupation;

— Group 2 - where the use of such tools were not necessarily a substantial part of the job, but may have been used; and

— Group 3 - where such tools should not have been used and evidence of use was required to support a claim for compensation.

11. VWF claims were assessed against a generally agreed scale of injury by a physician using information provided by the claimant backed up by medical testing. This assessment established the "staging" of the disease which was then read across to agreed tariffs in the Claims Handling Agreement and a settlement offer was made by Capita-IRISC.

COPD claims

12. Having submitted a claim giving details of ill health, work history and smoking habits, the claimant would be invited for a Spirometry Test for lung function. Although this test established the extent of lung damage and not the cause, it did allow the assessors to prioritise claimants to ensure that the oldest and most severely damaged claimants were put through the assessment procedure first. Depending on the result of this, the claimant might be given an expedited offer which would speed up the process of payment. If the expedited offer was rejected by the claimant, or if on the basis of the Spirometry Test he was not entitled to an expedited offer, the claimant would be submitted to the full MAP before an offer of compensation could be made. In this a respiratory specialist, aided by lung function test results, medical records and a consultation with the claimant (in live cases), diagnosed any diseases and assessed disability due to COPD discounting co-morbidity, other disabling conditions for which the DTI was not liable.[14] Atos Origin told us that it employed about 50 respiratory specialists at assessment centres throughout the country to assess the COPD claim by means of the Respiratory test and the full MAP. A medical reference panel oversaw the medical process.[15]

Prioritisation of all claims

13. The Handling Agreements provided for claims from the most elderly and ill claimants to be given priority, followed by other surviving claimants, widows of claimants, and then estate claims (not from widows). The last are being processed only as and when Capita-IRISC resources permit.[16]

Rate of progress

14. The volume of claims has been much higher than anyone expected and the DTI and CSG agreed that the unforeseen number of claims has led to administrative and other problems, although they disagreed over the causes for delay.[17] At the time of the lead case trial judgment there were fewer than 5,000 VWF cases and the DTI's best estimate was that this would rise to about 40,000. On COPD, the figures were 30,000 and 70,000.[18] The DTI acknowledged that they did not have a firm basis for making these estimates—British Coal had estimated their total liability very much lower (only £50m was included as a provision in their accounts).[19] In the event, nearly 170,000 VWF claims have been registered and 576,000 claims for COPD have been made.[20]

15. As at 9 January 2005, Capita-IRISC had settled 97,000 claims for VWF in full. A total of £1.1 billion of compensation had been paid. For COPD, 172,000 claims had been settled in full and final offers made in another 179,827 cases. In all £1.29 billion had been paid in compensation for COPD. The DTI expects to pay about £7.5 billion in compensation under the two schemes.[21]

DTI's Aspirational End Dates

VWF

16. The DTI have defined a number of aspirational end dates for the VWF scheme. The Department reported that by the end of December 2004 the first of these had been achieved—the issue of offers for general damages to all claimants who had undergone their medical assessment. The DTI intends that all general damages claims should be settled by the end of September 2005. Capita IRISC has been asked to complete investigation of VHF Group 3 claims by the same time. VWF medical assessments for Services claims are to be complete by the end of 2006, and all Services claims should be settled by the end of 2007.[22]

COPD

17. At the current rate of progress, the COPD scheme would extend up to 2009 for live claimants, and 2011 for deceased claims. The DTI estimated that, under the arrangements for expedited claims to be introduced from 1 March onwards (and which are discussed below), the end dates should be brought forward to 2007 for live claims and 2009 for deceased claims.[23]

6 Appendix 2, para 7 Back

7 Ibid Back

8 Appendix 5, para 35; Appendix 8, para 9 Back

9 Q120 Back

10 Q121, Appendix 3 Back

11 Appendix 2, paras 9-10 Back

12 Appendix 2, Figures 1 to 3 Back

13 Appendix 2, paras 14-22 Back

14 Appendix 2, paras 14-16 Back

15 Q 72 Back

16 Appendix 2, para 12 Back

17 Ibid, para 31; Appendix 5 Back