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
Partner
Pinsent Masons LLP
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