| Previous Section | Index | Home Page |
Orders of the Day
Compensation Bill [ Lords]
As amended in the Standing Committee, considered.
‘(1) This section applies where—
(a) a person (“the responsible person”) has negligently or in breach of statutory duty caused or permitted another person (“the victim”) to be exposed to asbestos,
(b) the victim has contracted mesothelioma as a result of exposure to asbestos,
(c) because of the nature of mesothelioma and the state of medical science, it is not possible to determine with certainty whether it was the exposure mentioned in paragraph (a) or another exposure which caused the victim to become ill, and
(d) the responsible person is liable in tort, by virtue of the exposure mentioned in paragraph (a), in connection with damage caused to the victim by the disease (whether by reason of having materially increased a risk or for any other reason).
(2) The responsible person shall be liable—
(a) in respect of the whole of the damage caused to the victim by the disease (irrespective of whether the victim was also exposed to asbestos—
(i) other than by the responsible person, whether or not in circumstances in which another person has liability in tort, or
(ii) by the responsible person in circumstances in which he has no liability in tort), and
(b) jointly and severally with any other responsible person.
(3) Subsection (2) does not prevent—
(a) one responsible person from claiming a contribution from another, or
(b) a finding of contributory negligence.
(4) In determining the extent of contributions of different responsible persons in accordance with subsection (3)(a), a court shall have regard to the relative lengths of the periods of exposure for which each was responsible; but this subsection shall not apply—
(a) if or to the extent that responsible persons agree to apportion responsibility amongst themselves on some other basis, or
(b) if or to the extent that the court thinks that another basis for determining contributions is more appropriate in the circumstances of a particular case.
(5) In subsection (1) the reference to causing or permitting a person to be exposed to asbestos includes a reference to failing to protect a person from exposure to asbestos.
(6) In the application of this section to Scotland—
(a) a reference to tort shall be taken as a reference to delict, and
(b) a reference to a court shall be taken to include a reference to a jury.
(7) The Treasury may make regulations about the provision of compensation to a responsible person where—
(a) he claims, or would claim, a contribution from another responsible person in accordance with subsection (3)(a), but
(b) he is unable or likely to be unable to obtain the contribution, because an insurer of the other responsible person is unable or likely to be unable to satisfy the claim for a contribution.
(8) The regulations may, in particular—
(a) replicate or apply (with or without modification) a provision of the Financial Services Compensation Scheme;
(b) replicate or apply (with or without modification) a transitional compensation provision;
(c) provide for a specified person to assess and pay compensation;
(d) provide for expenses incurred (including the payment of compensation) to be met out of levies collected in accordance with section 213(3)(b) of the Financial Services and Markets Act 2000 (c. 8) (the Financial Services Compensation Scheme);
(e) modify the effect of a transitional compensation provision;
(f) enable the Financial Services Authority to amend the Financial Services Compensation Scheme;
(g) modify the Financial Services and Markets Act 2000 in its application to an amendment pursuant to paragraph (f);
(h) make, or require the making of, provision for the making of a claim by a responsible person for compensation whether or not he has already satisfied claims in tort against him;
(i) make, or require the making of, provision which has effect in relation to claims for contributions made on or after the date on which this Act is passed.
(9) Provision made by virtue of subsection (8)(a) shall cease to have effect when the Financial Services Compensation Scheme is amended by the Financial Services Authority by virtue of subsection (8)(f).
(10) In subsections (7) and (8)—
(a) a reference to a responsible person includes a reference to an insurer of a responsible person, and
(b) “transitional compensation provision” means a provision of an enactment which is made under the Financial Services and Markets Act 2000 and—
(i) preserves the effect of the Policyholders Protection Act 1975 (c. 75), or
(ii) applies the Financial Services Compensation Scheme in relation to matters arising before its establishment.
(11) Regulations under subsection (7)—
(a) may include consequential or incidental provision,
(b) may make provision which has effect generally or only in relation to specified cases or circumstances,
(c) may make different provision for different cases or circumstances,
(d) shall be made by statutory instrument, and
(e) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.’.— [Bridget Prentice.]
Brought up, and read the First time.
4.34 pm
The Parliamentary Under-Secretary of State for Constitutional Affairs (Bridget Prentice): I beg to move, That the clause be read a Second time.
Mr. Speaker: With this it will be convenient to discuss the following:
New clause 6— Mesothelioma Compensation Board—
‘(1) The Secretary of State may by regulations establish a body known as the Mesothelioma Compensation Board.
(2) Regulations made under this section shall make provision as to the functions and powers of the Board.’.
New clause 7— Asymptomatic chemical exposure—
‘The lodging in the body of a chemical or substance which may cause injury as a consequence of negligence or breach of statutory duty, shall give rise to a cause of action whether or not the lodging has caused symptoms at the time the action is commenced or brought to trial.’.
New clause 8— Disapplication of Crown Proceedings Acts—
‘The Crown Proceedings Act 1947 and the Crown Proceedings (Armed Forces) Act 1987 shall not provide a defence to a claim brought after the Act came into force, in respect of injury caused by exposure to chemicals or substances occurring before that date but which did not manifest symptoms in the claimant until after that date.’.
Government amendments Nos. 7 to 10.
Bridget Prentice: I am delighted to be introducing new clause 13 and related Government amendments Nos. 7 to 10, which, I believe, will make a real difference to sufferers of mesothelioma and their families who have been, or would have been, affected by the recent House of Lords judgment in the case of Barker v. Corus.
Mr. Frank Field (Birkenhead) (Lab): The Minister rightly talks about her pleasure in moving the new clause. That pleasure is widely felt, certainly among Members on the Labour Benches, because many of our constituents have a real interest in what she is about to say. I thank her.
Bridget Prentice: I am grateful to my right hon. Friend for his intervention, especially because I want to ensure that I make it clear throughout my speech how grateful I am to my right hon. and hon. Friends for the campaigning that they have done on this issue and the pressure that they have put on me, and the Government as a whole, to ensure that we would consider new clause 13 and the Government amendments today. I agree that the measures are important to many hon. Members, and they are especially important to the families and constituents whom they represent.
Mr. Oliver Heald (North-East Hertfordshire) (Con): Of course we welcome the new clause and amendments. However, how would the Minister respond to a letter that I have received from the solicitor who acted for the Department of Trade and Industry when it instigated the litigation that resulted in the House of Lords decision in Barker v. Corus? The solicitor writes:
“It appears that the same government for which I was acting in what was then considered to be in the public interest has now apparently decided, following a clamour of protest, to legislate to reverse the decision which it itself sought.”
Will the hon. Lady explain which Minister decided to take the case of Barker v. Corus forward? How much did it cost, and why have the Government got into this mess?
Bridget
Prentice: I am disappointed that the
hon. Gentleman is trying to make juvenile
points— [Interruption.] If he is prepared to listen, I
will explain to him one of the simple things about cases in both the
Court of Appeal and the House of Lords. Cases are given the title of
the person taking the action and the person defending the action. The
hon. Gentleman will see that no Government name appears in the case of
Barker v. Corus as either the appellant or the defendant. The
case was taken by the families against Corus. He should stop trying to
make silly interventions and allow us to take a historic decision today
that will change the lives of people who are suffering because of a
horrible
disease.
Mr. Heald rose—
Bridget Prentice: If I may, I would like to get past the first sentence of my speech. I will give way again shortly.
Let me outline the situation. In the 2002 case of Fairchild v. Glenhaven Funeral Services, the House of Lords decided that a person who had contracted mesothelioma after wrongful exposure to asbestos—
Mr. Heald: On a point of order, Madam Deputy Speaker. Is it in order for the Minister to misrepresent the position, albeit no doubt inadvertently? It was British Shipbuilders (Hydrodynamics) Ltd that took the case to the House of Lords, funded by the Department of Trade and Industry. I have quoted from a letter from the solicitor—
Madam Deputy Speaker (Sylvia Heal): Order. That is a matter for debate, rather than a point of order for the Chair.
Bridget Prentice: In the 2002 case of Fairchild, the House of Lords decided that someone who had contracted mesothelioma after wrongful exposure to asbestos at different times by more than one negligent employer could sue any of them, notwithstanding the fact that he could not prove which exposure had caused the disease, because all had materially contributed to the risk of his contracting that disease. Fairchild did not resolve whether liability should be joint and several, although it was presumed by the parties that that would be the rule, and that was the approach taken in practice. However, in Barker v. Corus, the House of Lords decided that instead the damages were to be apportioned among those responsible for the wrongful exposure according to their relative degree of contribution to the chance of the person contracting the disease.
That decision did not impose a limit on the damages that could be recovered from those responsible for the exposure to asbestos, but it did mean that the risk of any of them being insolvent and unable to pay the appropriate share would fall on the claimant, and that in practice the claimant would have to trace all relevant defendants, as far as that was possible, before liability could be apportioned and full compensation paid, or alternatively to issue multiple claims to recover damages on a piecemeal basis.
David Howarth (Cambridge) (LD): I fear that the Minister has missed one important part of the argument in the Barker case: it extended liability to cover cases where part of the exposure was caused by the claimant himself. Is not there a danger that the law will go back to its state before Barker if the new clause is passed?
Bridget Prentice: In one sense the law will go back to before Barker—to Fairchild, which represents the position that we wish to put people in. As I said at the beginning, although Fairchild did not in itself determine joint and several liability, in practice that is what happened, and that is what we want to achieve.
David Howarth: I am grateful to the Minister for giving way again, because this is a very important point. There are two aspects of Barker. One was in favour of the claimant, by expanding the scope of the Fairchild ruling; the other was the imposition of proportionate several liability instead of joint and several liability. If we return to Fairchild completely, the liability rule will contract and fewer people will gain damages in the first place.
Bridget Prentice: I do not accept the hon. Gentleman’s version of what will happen as a result of the amendments. If he will allow me to go through the rest of the outline of why and how we are doing this, with a bit of luck it will all become clearer.
The practical effects of the decision, which the Law Lords were not asked to consider, would be that claims could take much longer to be concluded and would be much more difficult and time-consuming for claimants, when they and their families are already under considerable pain and stress. That is why we are taking action today to reverse the effects of the Barker judgment and to help claimants suffering from this terrible disease to receive the compensation to which they are entitled as soon as possible.
Tony Lloyd (Manchester, Central) (Lab): May I too congratulate my hon. Friend on this important step? Although she is absolutely right to emphasise that the decision is fair to the claimants, it is also logical medically. I know of no doctor who believes that it is even remotely sensible to try to apportion the responsibility or the causality among different former employers. The Barker decision was treated with total incredulity by the medical profession, who of course must deal with the consequences of the outrageous actions of the asbestos purveyors of the past.
Bridget Prentice: My hon. Friend makes a very important point. That is why we have tabled the amendments. The very fact that a single fibre of asbestos is enough for someone to contract this horrible disease makes it very difficult medically to decide directly where that might have happened.
I should make it clear that the amendments are just part of what the Government are doing. Together with colleagues in the Department for Work and Pensions, we are working with the Association of British Insurers, the Association of Personal Injury Lawyers and the TUC urgently to identify ways of speeding up the settlement of mesothelioma claims. My right hon. Friend the Secretary of State for Work and Pensions has already indicated that he will be making a statement about that work before the recess. I thank the ABI, APIL and the TUC for the helpful and constructive discussions that we had when formulating the amendments.
4.45 pm
Chris Bryant (Rhondda) (Lab): Those of us who last week heard the Minister for Employment and Welfare Reform make a commitment to providing a statement before the recess were encouraged. Will the Under-Secretary underline the importance of taking swift action? Sadly, people who contract mesothelioma may have no more than a year or 18 months between the moment when they know that they have contracted the illness and dying, so it is important that the Government move swiftly, and that the system is swift to administer. Does my hon. Friend agree?
Bridget Prentice: I absolutely agree with my hon. Friend, and I hope later to reassure him that we are making sure that that happens. It is all very well our introducing the amendments, but if people who are suffering had to wait an extended time to receive their compensation, much of what we are doing today would be undermined, so my hon. Friend is right to make that point.
Mr. John Greenway (Ryedale) (Con): I, too, thank the Minister for the speedy way in which she has responded to this problem, which dominated Second Reading. She mentioned the ABI, and I am grateful for the changes that the Government have implemented. The new clause is complex, and amends, for example, the financial services compensation scheme. Can she give the House the assurance that all claimants will receive full compensation? If all those responsible were insolvent, there would be a loophole, and a gap in provision. That requires a great deal of attention, so it would be helpful to all of us if she gave that assurance. Finally, I endorse the point about speed, which is particularly important, given that the rules committee has to draw up a new framework to ensure that compensation is made speedily. That process has, in the past, been protracted, and that would not be appropriate in the circumstances.
Bridget Prentice: The hon. Gentleman makes a fair point. Officials are working on that issue, virtually as we speak. He is right about the effect on the Financial Services and Markets Act 2000, and indeed on the Policyholders Protection Act 1997. We are not changing liability under that scheme, but we will make sure that people are properly covered and that FSMA, as it is affectionately known, is used properly. Work on that is going on now. Later, I hope to show that people can receive compensation even before the regulations are made, and that the money can be drawn back later by the people who pay it. I hope that I have given the hon. Gentleman reassurance.
I want to deal with the detail of the amendments, and I hope that the explanatory note that has been provided will be of assistance. New clause 13 provides that where a person
“has negligently or in breach of statutory duty caused or permitted another person...to be exposed to asbestos,”
“the victim has contracted mesothelioma as a result”,
the
negligent person will be jointly and severally liable. That will enable
the claimant to recover full compensation from any responsible person,
and will
also apply to claims made by the claimant’s estate or dependants
when the claimant has not made or resolved a claim prior to his
death.
Mr. David Hamilton (Midlothian) (Lab): I, too, congratulate the Minister and her officials on the manner in which they took the Bill through the House, and on ensuring that it will apply to Scotland throughout the period in question. The issue is extremely important, so does the Minister share my disappointment that Members from the Scottish National party do not see fit to be in the Chamber, even though the issue affects so many Scots?
Bridget Prentice: My hon. Friend points out the absence of SNP Members, but it does not surprise me, as they rarely come to the Chamber when something of such importance to many of their constituents is being debated. I am not surprised—disappointed, perhaps, but I may be too old and cynical even to be disappointed any more.
With reference to Scotland, I am grateful to our colleagues in the Scottish Executive who worked extremely hard in a very short time to agree the Sewel motion, which will allow the provision to apply to Scotland. I put on record my thanks to them for taking on board the issues that we raised with them, despite the fact that we did not necessarily have every t crossed and every i dotted.
The provision will apply regardless of where the exposure took place. I am aware that some concerns have been expressed that this may extend the principle contained in Fairchild. I do not believe that this is the case. Although the case of Fairchild related to a workplace exposure, the principle contained in the House of Lords judgment was not restricted to such cases. To restrict the provision to workplace exposure would mean that some of the claimants affected by Barker would be left in exactly the same difficulties as they are now suffering, and that different claimants would be treated in different ways purely because of where the exposure occurred. That cannot be right.
Mr. John Redwood (Wokingham) (Con): Can the Minister give us an idea of how much in total might be paid out if the new clause goes through, and what that would mean for each sufferer?
Bridget Prentice: No, I regret that I cannot give the right hon. Gentleman a figure for the sum that would be paid out. When my right hon. Friend the Secretary of State for Work and Pensions makes his statement, he may have more detail. I shall let him know that that would be of interest to the House. If he can, I am sure that he will try to give a figure, but it is difficult to make a direct statement on such matters. We know that there are between 1,000 and 2,000 cases per year, so we can work on that basis. The changes to the FSCS will improve the speed with which claimants receive compensation, but as I said earlier, they do not alter liability under the scheme.
The provision also ensures that where a claimant has worked for a single employer who is now insolvent, but where only part of the period of exposure is covered by insurance, the claimant will be able to recover compensation from that insurer on the same basis as before the Barker case. That is a point that the hon. Member for Ryedale (Mr. Greenway) raised.
Subsection (3) makes it clear that the provision does not affect the existing law on contributory negligence. Where a claimant has himself been responsible for part of the negligent exposure, it is right that that should be reflected in the level of compensation, but the provision will apply where, for example, a self-employed person has been negligently exposed by another while working as a contractor.
Subsection (3) also makes it clear that a person who has paid full compensation can then seek a contribution to the damages awarded from other responsible persons under the Civil Liability (Contributions) Act 1978. In the light of concerns expressed by insurers, subsection (4) provides for contributions to be apportioned on the basis of the relative lengths of the periods of exposure for which each was responsible, unless the parties agree otherwise or the court thinks that another approach is more appropriate. That will ensure that defendants and insurers are able to recover contributions in as straightforward a way as possible. In that context, it is also important that the lawyers acting for claimants ensure that defendants are provided with a full employment and exposure history, and we are looking to see whether amendments to secondary legislation will help to achieve this. That, too, will help to speed up compensation.
Subsections (7) to (11) confer a power on the Treasury to make regulations about the provision of compensation to a responsible person or an insurer of a responsible person in specified circumstances. These provisions are essential to help avoid delay in paying compensation, and will allow the current practice of employers and insurers making parallel payments with the FSCS to continue. As well as speeding up the claims process, they also produce a fair outcome for insurers.
These subsections confer a power for the Treasury to make provisions that would facilitate speeding up the payment of claims to mesothelioma victims. These provisions would enable responsible persons to claim money back from the financial services compensation scheme, when another responsible person and their insurer are both insolvent and thus unable to pay their own share of compensation payments—again, that is related to the point that the hon. Member for Ryedale made. The power includes the ability to dealwith situations arising before the establishment of the FSCS that were, as I have said, settled under the Policyholders Protection Act 1975.
The power will come into effect only when the Treasury has laid the necessary regulations and the Financial Services Authority has made the relevant rules. However, the rules permit the liable party to claim contributions in respect of claims dealt with from the date of Royal Assent—that is the point that my hon. Friend the Member for Rhondda (Chris Bryant) asked about. The Treasury will make regulations, which will be laid as soon as practicable in the autumn, once Parliament reconvenes.
The FSA is considering what changes may be needed to the FSCS to facilitate the swifter settlement of mesothelioma claims in accordance with the amendment of this Bill. The FSA proposes to take forward any changes as a matter of priority.
Jim Sheridan (Paisley and Renfrewshire, North) (Lab): On the subject of the Treasury, my hon. Friend knows that many voluntary organisations are involved in helping victims and families through such traumatic times. Will she tell the House whether the Bill will assist voluntary groups such as Clydeside Action on Asbestos, which does a terrific job helping people to prepare claims and apply for compensation?
Bridget Prentice: When we consider other parts of the Bill, my hon. Friend will find out what we are doing to exempt some groups, and the organisation that he has mentioned may fall into that category. Where charitable and voluntary organisations are helping victims, I hope that the Bill will protect them and allow them to continue their good work.
Simon Hughes (North Southwark and Bermondsey) (LD): The Minister knows that I welcome the initiative, about which I shall say more later. When she secured the general support of the Association of British Insurers for a compensation scheme, what was her answer to its proposal that there should be a separate body to deal with claims, which might be a quicker method than the one that she has just described? May I assume that she will go on to discuss how the Government are sure that they will be justified in law and that the retrospective aspects of the proposal will not be overturned?
Bridget Prentice: I will discuss the retrospective aspects of the proposal shortly. The ABI has been helpful, and we have taken on board a number of issues that it has raised. We think that that method will be faster than setting up a board, which would require rules, regulations and appointments. We will be able to get compensation to people from the moment of Royal Assent, which employers and insurers will, where appropriate, be able to claim back. The system will be swifter and simpler for victims—the hon. Gentleman supports the new clause, and he knows that our main focus is getting compensation to victims as swiftly as possible.
On retrospection, amendment No. 8 allows the provision to be retrospective, which means that it will apply to claims settled or determined on or after 3 May 2006—the date of the Barker judgment—and it allows parties to seek the variation of any such settlement or determination. It will also apply to cases that have not been concluded. We regard it as being of the utmost importance that all claimants affected by the Barker judgment can secure full compensation, including the parties to that case, the parties to the cases conjoined with that case and the parties to cases subsequently settled or determined on the apportionment basis proposed by Barker.
I recognise that this is an exceptional step, but I believe that it is justified. I hope that it will have thefull support of this House given the exceptional circumstances and that it will not raise difficulties in relation to compliance with the European convention on human rights. There are number of reasons why that is the case, and I want to set them out.
First, the degree of retrospection is strictly limited and will apply only to a very short period and a very few cases. It is my understanding that following Barker, the great majority of cases that were under way have been stayed pending clarification of the appropriate method of apportionment or in the light of the Government’s announcement that they intended to introduce these amendments. I am grateful to the judiciary for waiting to hear exactly what we intended to do before they carried those cases through. In addition, those cases—and any that have currently not been concluded—will have commenced prior to Barker, so the expectation of both claimants and defendants will have been that joint and several liability would apply. We are therefore not interfering with the settled expectations of the parties to any of those proceedings.
5 pm
I believe that it would be unacceptable to provide assistance to future claimants but to leave a small group whose claims are unresolved, or have been concluded on the basis of Barker, to suffer the real disadvantages arising from that judgment—and I therefore believe that the provisions on retrospectivity are therefore proportionate and justifiable. We are talking about barely seven or eight weeks.
Mr. Michael Clapham (Barnsley, West and Penistone) (Lab): Has my hon. Friend any idea of the number of cases that may have gone through the courts in the period since 3 May following the Barker decision? As she will recall, I referred a case to her following a question that had been put to me by the Liverpool asbestos group, which cited a case that the judge had refused to defer, and with which he insisted on proceeding. As a result, the compensation was supposedly less than it would have been. Under the Government amendment, that case could be heard again, but it would be good to have an idea of the number of cases that have gone through the courts in that time.
Bridget Prentice: My hon. Friend has raised that case with me before. We have tried to find out how many cases there are, and as far as we are aware, the vast majority have been stayed pending the decisions of this House and the other place on the Bill. I am grateful for that, as it means that everyone is in the pre-Barker position. I do not know exactly how many cases have gone through. However, we are allowing this tiny amount of retrospectivity to ensure that people do not end up unjustly penalised because their cases were unfortunate enough to fall within the two months between Barker and the time when the Bill will, I hope, receive Royal Assent.
The Scottish Parliament recently passed a legislative consent motion, and amendment No. 9 therefore ensures that these provisions will apply across the United Kingdom. Colleagues in Northern Ireland have also signalled a wish for the provisions to apply there.
To ensure that claimants receive the benefit of the provisions as soon as possible, amendment No. 7 provides for them to come into effect, together with the provisions in part 1 of the Bill, on Royal Assent. Amendment No. 10 makes the necessary consequential change to the title of the Bill.
New clause 6 would give the Secretary of State the power by regulation to establish a mesothelioma compensation board and to define its functions and powers. As I said to the hon. Member for North Southwark and Bermondsey (Simon Hughes), it would be premature to create a statutory power of that nature.
| Next Section | Index | Home Page |