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The provisions would come into effect only once the Treasury has laid the necessary regulations and the FSA has made the relevant rules. However, the power provides that rules could permit the liable party to claim contributions in respect of claims dealt with from the date of Royal Assent.
The Treasury will make regulations to be laid as soon as practicable in the autumn, once Parliament
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It is of the utmost importance that all claimants affected by the Barker judgment are able to secure full compensation, including the parties to that case and the cases conjoined with it, and any whose caseshave subsequently been settled or determined onthe apportionment basis proposed by Barker. Amendment No. 7 provides for that.
This is an exceptional step, but we believe that it is justified in the exceptional circumstances that apply here. It would be unacceptable to provide assistance to future claimants but to leave a small group of claimants whose claims are unresolved or have been concluded on the basis of Barker to suffer the real disadvantages arising from that judgment. I believe that that does not raise difficulties in relation to compliance with the European Convention on Human Rights, for a number of reasons.
During debates in another place, Mr Simon Hughes said that it was his understanding that those whom the retrospective change will adversely affect have all, effectively, signed up to it. That appears to be the result of a misunderstanding. I make it absolutely clear that the Government have not approached the parties to individual cases regarding the provision. We have involved the key stakeholders in developing the new clause to ensure that it works.
First, the degree of retrospection is strictly limited and will apply only to a very short period and very few cases. We understand that, following the Barker judgment, the great majority of cases that were under way have been stayed, either pending clarification of the appropriate method of apportionment or in the light of the Government’s announced intention to introduce the amendments. So very few cases may need to be reopened.
In addition, those cases—and any that are currently unconcluded—will have been commenced prior to Barker, so the expectation of both claimants and defendants will have been that joint and several liability would apply. We are therefore not interfering with the settled expectations of the parties to any of those proceedings.
The Scottish Parliament recently passed a legislative consent Motion to enable the provisions to apply directly to Scotland. Colleagues in Northern Ireland have also signalled their wish for the provisions to apply there. Amendment No. 8 therefore ensures that these provisions will apply across the United Kingdom. Finally, to ensure that claimants receive the benefit of the provisions as soon as possible, Amendment No. 6 provides for them to come into effect, together with the provisions in Part 1, on Royal Assent, and Amendment No. 10 makes the necessary consequential changes to the Title.
I must make it clear that the amendments are just part of what the Government are doing. Together with colleagues in the Department for Work and Pensions, we are working with the Association of
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Moved, That the House do agree with the Commons in their Amendment No. 1.—(Baroness Ashton of Upholland.)
Lord Hunt of Wirral moved, as an amendment to Commons Amendment No.1, Amendment No. 1A:
1A: Line 19, after “disease” insert “for all or any part of the period of exposure”
The noble Lord said: My Lords, I declare my interests as set out in the register, in particular as a solicitor and partner in Beachcroft LLP and as president of the All-Party Group on Occupational Safety and Health. All of us in that group are only too well aware of the dreadful mortal implications of mesothelioma. Our priority must be to improve the lot of people who are suffering from one of the most appalling conditions known to medical science. Each year, some 1,800 people are diagnosed with mesothelioma and, as matters stand, that is purely and simply a death sentence. Typically, a sufferer has at most 18 months to live and, within that short span, can expect a catastrophic decline in their quality of life. The number of sufferers is set to rise. The best estimate is that it will peak around 2020 and possibly slightly later.
No one can be satisfied with the manner in which the compensation system for mesothelioma cases currently operates. In a minority of instances, liability is quickly established and a payment is made by a present or former employer or their insurer. However, in many hundreds of cases each year, there is no solvent former employer or insurer, or liability simply cannot be established, so many hundreds of sufferers receive no compensation at all. That is intolerable. What is ideally required is a comprehensive, clear and sustainable system that delivers some form of compensation or benefit quickly after diagnosis and without unnecessary recourse to the courts. This is surely a question of justice and human decency.
However, we on these Benches in no way seek to oppose the Government’s efforts to regularise the position on mesothelioma claims, even if the provisions deal with only one aspect of the subject. I congratulate the Minister and her team on their hard work on the new clause, and on doing their best to consult stakeholders widely, despite the very tight timescale and what must have been more or less intolerable pressure from elsewhere in Government. However, we should not delude ourselves; the Government’s new clauses may be a necessary part of an overall settlement, but they will not, and cannot, deliver the reforms that are needed. This is no more or less than a first step, but it will also have some consequences, which is causing serious concern.
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One might quietly reflect for a moment, after this aspect of the matter is resolved for now, that the courts were directed to this point by the Government. It is also unfortunate that, having played a leading role in initiating the appeal process that led to the decision of this House in an appellate capacity, the Government have now sought to reverse the judgment in the three test cases, as the Minister has just acknowledged, without consulting some of those who are most affected. Many parliamentarians seemed to be under the impression that the insurers and employers involved in mesothelioma cases had willingly signed up to the Government’s new policy when they had not. I very much welcome the way in which the Minister has put the record straight.
Speed is of the essence, but this lack of full consultation and consensus is about more than just courtesy; it is about ensuring that the system works. It is vital that the new clause should operate for the benefit of all those involved in cases relating to this extremely unpleasant disease. Of course, claimants must be able to recover full damages to which they are entitled quickly and without undue complication. It is only fair, however, that those who pay such claims should have the opportunity to resolve sometimes difficult and complicated apportionment issues between themselves as economically and speedily as possible. I therefore particularly welcome the way in which the proposals prefer a simple “time on risk” approach between defendants, avoiding the need for extensive inquiries into and expert evidence on the effects of different types of asbestos and varying degrees of exposure. Such inquiries would be equally unwelcome for claimants, who would often have to be the main, perhaps the only, source of information, and it must be right that this sort of intrusion and unnecessary wasting of time should be avoided wherever possible.
5.15 pm
I also welcome the approach of the Minister to the difficulties caused by the current rules of the financial services compensation scheme. Although it has not been possible to settle those matters finally within the Bill itself, we recognise the amount of work that has already been done by the department, the Treasury and the FSA in getting this far. I welcome the Minister’s commitment to resolving these matters and I hope that she will be able to reassure me that her department will work closely with the Civil Procedure Rule Committee on this.
However, I should like to highlight a couple of points that in my view remain to be resolved. First, it is essential to the operation of this clause as between defendants that the claimant should provide as full an employment history as possible at a very early stage. The occupational disease protocol already flags the need for this. Moreover, it is generally recognised and acknowledged that insurers and other defendant interests have approached the drafting of this important amendment in a positive and constructive fashion. In fairness to them, their acceptance of the amendment must be on the basis that those representing claimants also abide by the spirit of compromise and provide the necessary information
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We should also reflect on the broader significance of this amendment. Not only have the Government acted to reverse what they believe to be the injustice of the decision of this House in its appellate capacity on Barker v Corus, but they have also been encouraged by the engagement of stakeholders to widen the scope of the clause so that it sets the scene for simplifying claims for mesothelioma in general. I know that the Secretary of State for Work and Pensions and his department continue to work with the Minister and with claimant defendant and insurer interests on ways of speeding up and simplifying the process, and we look forward to the Statement which the Minister has told us will be made tomorrow.
Much progress has been made, but like all too many injury claims, those for mesothelioma are too complex and transactional costs are too high. For satisfactory progress to continue, everyone involved must be prepared to compromise and even to act against their own short-term interests from time to time for the greater good. I would also urge the Minister to look at one remaining gap which I consider has not yet been closed, and hence Amendment No. 1A. Under Barker and current case law, a claimant whose single former employer is now insolvent and who can trace only part of that employer’s insurance cover runs a substantial risk of seeing his damages reduced. While subsection (2) covers other gaps created by the Barker decision, it arguably does not address this particular area. If the Minister is confident that the courts will deal with this in the time-honoured fashion, it would be helpful if she were able to confirm that today.
I do, however, have very great concerns about retrospective application, and I believe that those concerns are shared by many others in the House. Since the judgment of this House, I understand that most mesothelioma cases have been deferred and relatively few have settled as courts have awaited the Government’s response to the judgment. Nonetheless, I cannot recall ever a previous situation in which Parliament has been asked to enact legislation that would go so far as to overturn existing decisions of the courts in individual cases or reopen agreements reached between legally represented parties. Only yesterday there was a debate on this very point on the Government of Wales Bill in another place. If it is the will of the Crown in Parliament to impose retrospection, of course it has the power to do so. Yet all the foundations of our civil society, our legal and constitutional life, the Human Rights Act, centuries of accumulated statute and common law, basic principles of fairness and the very concept of the rule of law itself all resonate with grave doubts about any such move.
As my colleague Dominic Grieve said in another place only last night:
“It is not common practice for the House to pass measures that can apply retrospectively. Retrospective powers enable the Government to interfere with private rights in a way that is
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We must be cautious, ensuring that any such provision is tightly defined, will not be the subject of unjustified or unnecessary attempts to widen its scope and does not set a precedent.
I was reassured by the words of Bridget Prentice in another place on Monday when she described the application of retrospection in this instance as,
- “an exceptional step ... given the exceptional circumstances”.—[Official Report, Commons, 17/7/06; col. 47.]
The Minister has used similar language. I want it to be unique—a one-off. I hope she will be able to confirm that it will be.
Turning to further points of detail, I fear the current amendment to Clause 15 is not clear enough to prevent those who have settled their claims in full, without a discount for Barker, from believing that here is an opportunity to reopen those claims and seek more damages. The modest amendments I propose—Amendments Nos. 7A, 7B and 7C—would make the position absolutely clear. If the Minister is not prepared to accept those amendments, I invite her to make it abundantly clear in a Statement to this House, and perhaps also in writing, that these provisions will be available only in those cases where it is clear that the claimant has been directly and negatively affected by the decision in Barker v Corus. Bearing in mind that we are dealing with an amendment to a Bill designed to curb the excesses of claims management companies, it would be ironic and intolerable if this clause were to have the unintended effect of rekindling the kind of speculative claims that we have seen all too often in other areas in the past.
In closing, I have to say—in sorrow, not anger—that these past few days have not seen the parliamentary process in its best light. A judicial decision of the House’s Appellate Committee was made in May; an amendment to overturn it first appeared on the Order Paper last Friday; it was then debated and adopted in another place on Monday; just two days later, here we are debating it in the expectation that it will receive Royal Assent in a matter of days. I fully accept the urgency of this matter—this disease will not indulge us in our deliberations and every day more people are struck down—but it might have been better for the Government to have spent the summer preparing a comprehensive Bill to overhaul the system in a holistic, coherent fashion rather than unbalancing the Bill in this way.
I believe that we all have a responsibility to ensure that the somewhat tarnished reputation of our political life is rehabilitated and restored. Until this point, I have had nothing but praise for the manner in which the noble Baroness and her ministerial and departmental colleagues had conducted themselves; they consulted widely and consistently demonstrated courtesy, patience and a willingness both to listen and to be swayed by argument. In recent days and weeks, I fear, they have been somewhat swept away on a tide of party-political considerations and pressures from elsewhere within Government and from the Back Benches in another place. There has been a great deal
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Lord Goodhart: My Lords, I am pleased to see the noble and learned Lord, Lord Hoffmann, in his place. He delivered the lead speech in your Lordships' House in the decision in Barker v Corus and if he chose to intervene in the debate, I would be interested to hear what he had to say. He shakes his head.
It would be incorrect to say that the decision in Barker v Corus was wrong. In a sense, no decision of the Appellate Committee of your Lordships' House can be wrong; its members declare the law, and the law, as declared by them, is the law. I have read the decision in Barker v Corus—I understand and agree with the logical process by which it was arrived at, by a majority of, I think, four to one—but, nevertheless, it does not follow that because a decision is correct it should be followed unquestioningly. It is the role of the members of the Appellate Committee to declare what the law is, not what it ought to be. I agree that the decision in Barker v Corus would undoubtedly cause severe hardship to a number of people with what seem to me to be legitimate claims to compensation. Therefore, we on these Benches very much welcome the amendments. They would mean that people who get this dreadful disease will receive full compensation, except to the extent to which their own contributory negligence is a possible cause.
When I first saw what was proposed, I was seriously worried by the retrospective effect of the legislation. I was entirely happy that the Bill should apply to cases where the cause of action had not yet arisen, but I was doubtful about its application to cases still in progress or where the cause of action had arisen but action had not yet been commenced.
I agree with the noble Lord, Lord Hunt, about retrospective legislation. The problem is that a retrospective overruling by Parliament of the decisions of the courts is, in principle, a breach of the rule of law. That is particularly so where the case is a decision on rights between private individuals or companies. Observing the rule of law in this way is of special importance in a country where respect for the rule of law has persuaded many foreign businesses to use our courts to settle their legal disputes, to our great financial advantage.
I have, however, been persuaded that retrospectivity is acceptable here by the wholly exceptional circumstances of this case. First, there is the unusual nature of the disease; it is caused not by an accumulation of exposure, such as silicosis, which is contracted by miners, or lung cancer, which is caused by smoking, but may be caused by the inhalation of even a single fibre of asbestos. Secondly, another exceptional circumstance is that since the Fairchild decision, it appears that most employers and insurers have acted on the assumption that liability would be joint and several, and not several
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5.30 pm
There are some points of more detail. In the House of Commons, my honourable friend David Howarth raised a question of whether it could be argued that the drafting of the Bill left a possibility that damages could not be awarded at all in some cases. In the House of Commons, the Minister said that she would see whether the provision could be improved. Nothing has been done on this, which is presumably on the basis of legal advice. Was advice given that an amendment was not necessary, as suggested byMr Howarth? In case there is any remaining uncertainty, will the Minister assure us that claimants are not excluded from compensation on the grounds in any circumstances that they are guilty of contributory negligence?
It seems, regrettably, that there is no possible way of providing compensation where all the claimants, employers and their insurers are either insolvent or have gone into solvent liquidation and have been wound up. In such cases, there is no defendant against whom proceedings can be brought. Will the Minister confirm that nothing in this Bill succeeds in giving compensation where there is no available defendant against whom proceedings can be commenced?
It appears that compensation can be paid out of the financial services compensation scheme only if it is the insurer who is unable to pay. Does that mean that a defendant cannot claim against the scheme if another liable employer with the same victim has ceased to exist and was uninsured? What will happen if, as was the case with Barker, the victim was employed long ago and it cannot be ascertained whether the employer was insured? Is there any possibility in such a case of Corus being entitled to claim compensation from the scheme?
I am concerned by the costs incurred on both sides in the Barker v Corus appeal to your Lordships' House. No order has yet been made and it is not clear who will be ordered to pay them. However, the decision of the Appellate Committee has been rendered largely irrelevant by this Bill and costs incurred by both sides have been to a very considerable extent wasted. Since the purpose of the Bill is specifically to overrule the decision in Barkerv Corus, would it not be appropriate for the Government to make a contribution towards the costs
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Subject to those points, I have no other comments on the amendments in this group. I welcome the hope and expectation that they will very shortly become law.
Lord Dixon: My Lords, perhaps I may enter the debate as an ex-shipyard worker rather than a solicitor or someone from the legal profession. I assure the House that the Barker decision caused a great deal of concern in the area in which I live. I agreed with most of what the noble Lord, Lord Hunt of Wirral, said but, on retrospection, would he have a look at the Employment Act 1982, which his Government introduced, and see that there was a certain amount of retrospection then?
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