Memorandum submitted by the Department
for Business, Enterprise and Regulatory Reform
In advance of my appearance before the Public
Accounts Committee on 22 October 2007 I thought it might be helpful
to provide Members of the Committee with a brief update on the
progress which has been made on the Coal Health Compensation Schemes
since the NAO Report was published in July. Please note that the
NAO has not audited the updated figures.
1. OVERALL UPDATE
ON PROGRESSION
OF SETTLED
CLAIMS AS
AT END
SEPTEMBER 2007
The following table summarises the current position
on progress in settlement of claims:
| NAO Report (Based on End March 2007 Data)
| At End Sept 2007 |
| VWF | |
|
| Total VWF claims received | 169,617 (2.3, Page 11)
| 169,617 |
| Claims settled[18]
| 145,000 (1.10, Page 9) | 157,301
|
| Outstanding VWF claims | 27,000 (4.3, Page 26)
| 12,316 |
| Estimate: awaiting a first time VWF offer or denial as at 31 October 2007
| c. 6,000 (Figure 5, Page 19) | 5,500
|
| COPD | |
|
| Total COPD claims received | 591,706 (2.3, Page 11)
| 591,751 |
| Claims settled1 | 430,000 (1.10, Page 9)
| 475,547 |
| Outstanding COPD claims | 168,000 (4.3, Page 26)
| 116,204 |
| Number of claims in OROS scheme[19]
| 170,000 (11, Page 6) | 175,192
|
| | 100,253 (DOROS)
|
| | 74,939 (LOROS)
|
| LOROS[20] claims paid
| 71,635 (96%)[21]
| 72,086 (96%) |
| DOROS[22] claims paid
| 61,695 (62%) 4 | 81,377 (81%)
|
| Overall | |
|
| Total compensation paid to date |
| £3.7 billion |
2. VIBRATION WHITE
FINGER (VWF) SCHEME
At paragraph 4.10 the NAO Report identified two issues which
could complicate completion of the VWF Scheme:
i. Services Claims: The NAO reported that about 17,000
claims remained to be resolved. We are now forecasting that we
will be down to around 5,000 Services claims outstanding awaiting
a first time offer by end October and have revised our planning
assumptions to complete these by end of March 2008 with an intermediate
milestone in December 2007. Key to achieving resolution of these
claims remains co-operation from solicitors and claimants themselves
in resolving questions on employment history.
ii. Co-Defended General Damages Claims: We are now forecasting
that we should be down to around 400 outstanding co-defended General
Damages claims by end of October. The Department is continuing
to apply the "best endeavours" process endorsed by the
Court in September 2006 to achieve resolution of these claims.
Where agreement can not be reached with co-defendants the process
allows us to confirm a proportionate offer and as at the end of
September, 131 such offers have been made.
The Department has now also settled the tariff to be paid
to claimant representatives for VWF Services Claims. Following
detailed negotiations and mediation the Department achieved a
settlement representing a total cost of £48.87 million (£43.58
million for CSG firms and between £4.81 and £5.77 for
UDM firms) which represents an estimated saving of around £20
million against the fees that the Claimants Co-ordinating Group
of Solicitors were seeking to secure.
3. CHRONIC OBSTRUCTIVE
PULMONARY DISEASE
(COPD) SCHEME
At paragraph 4.11 the NAO Report identified two key issues
which threaten the COPD closure date. The following aims to summarise
the current position:
i. Surface Workers: There are currently 10,000 claimants
who worked solely on the surface whose claims have been denied
on the grounds that there is no legal liability to compensate
for injury to workers who were not employed underground. This
has been disputed and preparations to take "test cases"
to common law have been undertaken. Following a decision by Court
in July 2007 this cohort of claimants has now been narrowed to
around 5,500 claims from those that worked in Coal Preparation
Plants on the surface. At 3-5 October Court hearing it was agreed
that those representing claimants would now present position papers
to the Court by December 2007. In response the Department will
be providing details of the issues that we feel need to be addressed
in resolution of these cases. The next stages of the process will
then be discussed at the court hearing in week beginning 17 December
2007. The Judge has made clear that she would like to see the
cases involved brought to trial next year to enable resolution
of this long standing issue.
ii. Co-defendants: The Department continues to recognise
the issues associated with co-defended claims. To that end the
Department presented a paper on the latest position to 3-5 October
2007 Court hearing. The Judge expressed her concerns on progress
and urged all parties to make progress. To that end she also made
an Order in relation to specific issues relating to the position
with UK Coal and resolution of matters relating to calculators
to confirm compensation entitlements.
In addition we can inform the Committee that progress has
been made on the recovery of the overpayment of costs to solicitors
in the light of the April 2007 ruling on the level of fees to
be paid to claimant representatives for the handling of Fast Track
cases. Around £80.7 million is to be recovered and as at
the beginning of October 2007 some £33.6 million (42% of
total) has been received. At the October Court hearing the Judge
also ordered that all payments should be made by 31 March 2008.
4. KNEE LITIGATION
At paragraph 4.13 the NAO reported on the preliminary stages
of the knee litigation seeking compensation for acceleration of
osteoarthritis and meniscal damage to the knee.
A case management Court hearing was held on 28 September
in Leeds to progress this case. As a result of submissions made
by respective Counsel, the Judge ruled on a future timetable whereby
the claimants must put forward their generic statement of case
against the Department by 21 December 2007. The Department must
then file its generic defence by 20 March 2008. A ruling on the
costs cap is to be made before Christmas and further case management
conferences should take place in early 2008.
18
Includes denied & withdrawn claims Back
19
Includes those claims that failed DOROS Qualification cut-off Back
20
Live Optional Risk Offer Scheme LOROS (Fast Track) Back
21
Figures provided by Capita as at end March 2007 Back
22
Deceased Optional Risk Offer Scheme DOROS (Fast Track) Back
|
