Blacklisting in Employment: Final Report - Scottish Affairs Contents

Appendix 3: Letter to Chair from Richard Slaven, Partner, Pinsent Masons LLP, 9 March 2015

Dear Mr Davidson

The Construction Workers Compensation Scheme

You have asked for us to provide an update to the committee on the Construction Workers Compensation Scheme (the "Scheme").

Although the Scheme officially launched in July 2014 two factors ensured that the inflow of applications did not commence until, effectively, late autumn 2014.

First, for approximately 12 weeks following launch, solicitors representing the Claimant/union group engaged in lengthy correspondence concerning the terms of the Scheme, which appears to have delayed any advice being given to their clients on joining the Scheme. Second, and as a direct result of the Claimant/union group's objection to the Scheme Administrator holding the Consulting Association data ("TCA data") for validation and compensation purposes, all enquiry forms were delayed by initial ICO assessment against TCA data. That process had been taking up to 6 weeks although we have continued to work on solutions to reduce this delay. The effect of these factors is that a sizeable majority of applications to the Scheme have been submitted only in the last 4 months or so.

The Scheme statistics for the period up to the end of February 2015 are as follows:

·  444 formal written enquiry forms have been received.

·  210 applicants have been validated as eligible to join the scheme and have either joined or have been provided with the joining documents for execution.

·  60 further individuals are still awaiting initial assessment by the ICO or are being held pending further enquiries to confirm identity.

·  132 claims have been settled and have either been paid (104) or are in the process of being paid (28).

In addition, you have asked for a breakdown of the 132 awards that have been settled. The position is set out in the table below.

*No applicant eligible to join the Full Review which requires proof of loss (maximum award £100,000) has yet chosen to do so.

To put the above figures in context, we understand that as at the end of February 2015 there were 325 Claimants involved in the group litigation, parts of which have been underway for at least three years.

Whilst these early Scheme figures are encouraging, they have been achieved despite considerable headwinds in communicating and administering the Scheme. This will, inevitably, have negatively impacted take-up. Notwithstanding these extrinsic obstacles, the Scheme has been widely advertised at a local and regional level, with information also provided to media outlets to raise awareness. Very few applications, however, have resulted from this activity. As we have emphasised to your Committee in the past, the Scheme is attempting to reach 3,000 or so affected individuals as against a wider UK population of 62 million. Many of those that the Scheme is trying to reach are of retirement age and will have left work.

As we have sought to explain throughout, it remains clear that the single most important factor that will prevent the Scheme from compensating a greater percentage of the affected individuals is an absence of direct and repeated communication to those affected. The ICO has, under the direction of the court, conducted a limited exercise to communicate both the litigation and the Scheme to those for whom it holds current details, but this falls well short of the repeat direct communication the Scheme Administrator would have conducted.

Unlike the Claimant/union group the Scheme Administrator does not have the benefit of current or past members contact information. Further, as a result of objections from the Claimant/union group, the Scheme Administrator does not have access to the historical TCA data which contains past addresses and other information which might help identify and target affected individuals. Finally, the Claimant/union group has also prevented the Scheme gaining access to the current addresses of some 1,100 individuals which were matched by the Department of Work and Pensions, from National Insurance numbers held on TCA data. These objections have been made despite the fact that the Scheme provides that all applicants receive legal advice so that they can make an informed decision on whether to join the Scheme.

You have asked whether it is possible to compare take up of the Scheme by reference to other redress schemes. As we highlight above the Scheme operation is still in its early stages. You will also understand that all schemes must be seen in their specific context: Statutory redress schemes for industrial injuries for example are not helpful comparators because the population of affected individuals is generally unknown. Schemes such as FCA-supervised consumer redress schemes (under s404 FSMA 2000) have the ability to contact affected individuals. One of the most recent redress schemes for those who purchased card and identity protection policies from CPP Group PLC is reported by the FCA to have attracted take-up of 33.8% of eligible claimants over its life despite those affected having been contacted direct on several occasions.

Voluntary redress schemes, such as the Voicemail Interception Compensation Scheme introduced by News International in April 2011 (the redress scheme most similar to our Scheme in architecture) provide a choice of compensation through the scheme as an alternative to a Court process. It has been reported that the News International scheme over its entire life of two years, settled a total of 60 claims. That settlement figure is against 250 applications and a total population of affected individuals estimated at between 1,000 and 4,000.

I hope the information contained in this letter is helpful to the Committee and I would be happy to provide further information or clarification if required.

Yours Sincerely

Richard Slaven


Pinsent Masons LLP

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