Mesothelioma Claims - Justice Committee Contents

5  The Heads of Agreement between the Government and insurers

26. One further serious allegation was made in evidence to us about the Government's consultation. Ian McFall alleged that the consultation was in effect a mechanism to implement a policy objective which had been "agreed behind closed doors between the Government and the insurance industry".[41] We asked James Dalton of the ABI whether in discussions between the Government and insurers there had been a link between the payment by insurers of a levy to fund the Diffuse Mesothelioma Payment Scheme and the lifting of the LASPO exemption. He said that the "legal framework for mesothelioma claimants in particular was discussed".[42] In his evidence he also pointed out:

    If this is some sort of dirty deal that the insurance industry did with the Government, those things have not been implemented, and we want them to be implemented. The Government consulted on them, and they were not implemented.[43]

27. Following the oral evidence session, Mr Dalton wrote to us on 22 May 2014 appending a document entitled "Mesothelioma Heads of Agreement dated 13 July 2012: Her Majesty's Government and the Association of British Insurers".[44] This document described the proposals contained within it as an "indivisible package", which included a number of action points for delivery by the industry, and a number for delivery by the Government, including a "commitment to conduct the review of the applicability of provisions of the Legal Aid, Sentencing and Punishment of Offenders Act to mesothelioma claims as soon as appropriate and in line with the overall intention of the Mesothelioma package".[45] Mr Dalton said that there was no commitment from the Government to introduce any of the reforms to the process, and that, given the Ministry did not proceed with certain proposals in its consultation, "it cannot be argued, as some members of the Select Committee sought to do during the hearing, that the ABI and the insurance industry was provided any favourable treatment in relation to the ….consultation paper."[46]

28. Asked about the Government's understanding of the status of this Heads of Agreement document, Lord Faulks conceded that the document was "somewhat unusual" and amplified his position as follows:

    We have the Government agreeing to deliver certain things and the industry agreeing to deliver certain things. In fact, the Government did not deliver quite a few of the things in the bullet points in that section, so it is a slightly unusual agreement in the context of an agreement as one would normally regard it.[47]

29. It is undeniably the case that although elements of this Heads of Agreement have been delivered by both sides, including the LASPO section 48 review, it has proved to be in no sense a binding contract: the "indivisible package" which it set out has proved to be eminently divisible. It might be better understood to be a memorandum of understanding or intent drawn up between the insurance industry and the Government. It is not however the precise status of the document, legal or otherwise, which is of primary concern to us. Nor are we surprised that the Government was discussing these matters in private with the insurance industry. We are concerned that the Government has not been transparent or open, either with us or with other interested parties, about the fact that its overall policy in relation to mesothelioma has been shaped in accordance with an "agreement", however informal and elastic, which it had reached with employers' liability insurers. It is hard to see how a balanced and informed public debate can take place when a prior agreement has been reached between two of the principal parties to that debate, and that agreement is not known to others participating in the debate, including victims.

41   Q 22 Back

42   Q 59 Back

43   Q 27 Back

44   Association of British Insurers (MSC0028) Back

45   Ibid. Back

46   Ibid. Back

47   Q 87 Back

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Prepared 1 August 2014