Mesothelioma Claims - Justice Committee Contents

1  The Committee's inquiry and its background

1. Mesothelioma, a cancer of the lining of the lung, is one of several very serious diseases caused by exposure to asbestos. The short inquiry which we have carried out into the mesothelioma claims process was prompted by the Government's decision to apply sections 44 and 46 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012[1] to mesothelioma claims as well as to other personal injury claims. The effect of these sections is to remove the capacity of a successful claimant to recover certain costs from the losing party. We sought evidence on the appropriateness of that decision, taking into account:

·  the potential impact of the provisions on mesothelioma claims;

·  features which distinguish mesothelioma claims from other personal injury claims; and

·  the process of the review under section 48 of the Act.

We received 28 written submissions, which are published on our webpages[2], and we held two oral evidence sessions. At the first of these we heard from panels of witnesses opposing and supporting the Government's decision, and at the second we took evidence from the responsible Minister, Lord Faulks QC, Minister of State for Civil Justice and Legal Policy.[3] We are grateful to all those who provided evidence to us.

2. Part 2 of LASPO implemented recommendations made in a review by Lord Justice Jackson,[4] which changed the funding arrangements for civil litigation, including for personal injury cases. Prior to the entry into force of LASPO, personal injury claims were brought under conditional fee agreements (CFAs), the most common type of which were "no win, no fee" agreements, under which, if the case was lost, the lawyer was not paid. If the case was successful, the lawyer was paid the ordinary legal fees plus an uplift, the "success fee", comprising a percentage of the ordinary legal fees. A personal injury claimant could also purchase after the event (ATE) insurance against the risk of having to pay the defendant's costs if they lose. The losing party could be required to pay the winning party's ordinary legal fees, as well as any success fees and any ATE insurance premium.

3. Sections 44 and 46 of LASPO provide that the winning party is no longer able to recover the success fee or the ATE insurance premium from the losing party. These provisions came into effect for all personal injury cases other than mesothelioma claims in April 2013. In recognition of the fact that claimants would now bear the burden of success fees and ATE premiums, three additional measures were introduced:

·  a cap on the success fee: the Conditional Fee Agreements Order 2013 imposes a cap of 25% of the damages awarded (excluding damages for future loss and care);

·  a 10% increase in awards: a 10% increase in damages for non-pecuniary loss, in part to compensate claimants for having to pay the success fee, was recommended by the Jackson Review and effectively implemented by the Court of Appeal decision in the case of Simmons v Castle.[5]

·  a system of Qualified One Way Costs Shifting (QOCS), a form of costs protection for claimants, under which an unsuccessful claimant is protected from liability to pay the defendant's costs, except in cases where the claimant has behaved unreasonably or has failed to accept an appropriate offer.

4. Debate in both Houses on the Legal Aid, Sentencing and Punishment of Offenders Bill showed that this package of reforms was controversial, and especially so in relation to mesothelioma cases. An amendment to the Bill was made in the House of Lords to exempt claims arising from occupationally-related respiratory illness or disease from the new arrangements. In an episode of parliamentary "ping-pong" this amendment was initially disagreed to by the House of Commons but, following a Lords insistence, a compromise solution was effected by addition in the Commons of a Government New Clause (now section 48 of the Act) as an amendment in lieu of the Lords Amendment. This provided an exemption for mesothelioma cases alone until a review of the likely effect of sections 44 and 46 on mesothelioma proceedings had been undertaken and published by the Government.[6]

5. Between July and October 2013 the Government conducted a consultation on the mesothelioma claims process.[7] The three main proposals for change included in this consultation, which formed a package supported by — indeed to a large extent constructed by — defendant lawyers and insurers were —

·  introduction of a dedicated Mesothelioma Pre-Action Protocol (MPAP) to be used instead of the Pre-Action Protocol for Disease and Illness (DPAP), which many argue has not proved suitable for enabling mesothelioma claims to be dealt with swiftly enough;

·  establishment of an online Secure Mesothelioma Claims Gateway, acting in support of the MPAP to facilitate exchange of information relating to claims;

·  introduction of a fixed recoverable costs regime.

6. In parallel the Government introduced legislation to set up a Diffuse Mesothelioma Payment Scheme, funded by employers' liability insurers, to provide compensation to mesothelioma sufferers unable to trace a liable employer or insurer. This legislation received Royal Assent on 30 January 2014 as the Mesothelioma Act 2014, with the first payments expected to be made under the scheme in July 2014.

7. The second part of the Government's consultation paper of July 2013 explained that the Government was conducting a review under section 48 of LASPO of the likely effects of the application of sections 44 and 46 on mesothelioma proceedings. Question 15 in the consultation paper asked:

    Do you agree that sections 44 and 46 of the LASPO Act 2012 should be brought into force in relation to mesothelioma claims, in the light of the proposed reforms described in this consultation, the increase in general damages and costs protection, and the Mesothelioma Bill?[8]

8. In a Written Statement dated 4 December 2013, the Government announced that it had decided to apply sections 44 and 46 of LASPO to mesothelioma cases with effect from July 2014.[9] In its formal response to the consultation, published on 6 March 2014,[10] the Government confirmed this position. In the letter he sent us following the oral evidence session, however, Lord Faulks said it would no longer be possible to commence the provisions in July and the Government's intention was to proceed with implementation in autumn 2014.[11] In its consultation response the Government also stated that it would not take forward any of the other main proposals set out in the consultation paper: the MPAP, the Secure Gateway and the fixed recoverable costs regime. In our inquiry we have not considered in any detail the merits of these proposals: we have confined ourselves to consideration of the case for the Government's decision in the context of the claims process as it is currently operating. At the same time, we should make clear that our inquiry is conducted independently of the process of review which the Government has conducted under section 48 of LASPO. Our inquiry is also separate from the judicial review which is being brought against the Government's decision.[12] The House's sub judice resolution, which precludes reference in parliamentary proceedings to most cases which are before UK courts, does not apply to judicial reviews of ministerial decisions.

1   Henceforth "LASPO". Back

2   Mesothelioma claims written evidence Back

3   Mesothelioma claims oral evidence Back

4   Review of Civil Litigation Costs: Final Report, Lord Justice Jackson, December 2009 Back

5   [2012] EWCA Civ 1039 Back

6   HL Deb 14 March 2012 cols 309-333; HC Deb 17 April 2012 cols 264-285; HL Deb 23 April 2012 cols 1606-1625;
HC Deb 24 April 2012 cols 830-854 Back

7   Reforming mesothelioma claims: a consultation on proposals to speed up the settlement of mesothelioma claims in England and Wales, Ministry of Justice, July 2013 Back

8   Reforming mesothelioma claims: a consultation on proposals to speed up the settlement of mesothelioma claims in England and Wales, Ministry of Justice, July 2013, paragraph 76. Back

9   HC Deb 4 December 2013 cols 55-56 WS Back

10   Reforming mesothelioma claims: The Government response to consultation on proposals to speed up the settlement of mesothelioma claims in England and Wales, Ministry of Justice, 6 March 2014. Back

11   Ministry of Justice (MSC0029) Back

12   R on the application of Tony Whitston (for and on behalf of the Asbestos Victims Support Groups Forum UK) v Secretary of State for Justice. Back

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