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Compensation Bill [HL]
5 pm
The Parliamentary Under-Secretary of State, Department for Constitutional Affairs (Baroness Ashton of Upholland): My Lords, I beg to move that the Commons amendments be now considered.
Moved accordingly, and, on Question, Motion agreed to.
commons amendments[The page and line references are to Bill 155 as first printed for the Commons.]
1: After Clause 2, insert the following new Clause-
(a) a person (“the responsible person”) has negligently or in breach of statutory duty caused or permitted another person (“the victim”) to be exposed to asbestos,(b) the victim has contracted mesothelioma as a result of exposure to asbestos,(c) because of the nature of mesothelioma and the state of medical science, it is not possible to determine with certainty whether it was the exposure mentioned in paragraph (a) or another exposure which caused the victim to become ill, and(d) the responsible person is liable in tort, by virtue of the exposure mentioned in paragraph (a), in connection with damage caused to the victim by the disease (whether by reason of having materially increased a risk or for any other reason).(a) in respect of the whole of the damage caused to the victim by the disease (irrespective of whether the victim was also exposed to asbestos-(i) other than by the responsible person, whether or not in circumstances in which another person has liability in tort, or (ii) by the responsible person in circumstances in which he has no liability in tort), and(b) jointly and severally with any other responsible person.(a) one responsible person from claiming a contribution from another, or(b) a finding of contributory negligence.- (4) In
determining the extent of contributions of different responsible
persons in accordance with subsection (3)(a), a court
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- (5) In subsection
(1) the reference to causing or permitting a person to be exposed to
asbestos includes a reference to failing to protect a person from
exposure to asbestos.
- (7) The Treasury may
make regulations about the provision of compensation to a responsible
person where-
- (9) Provision made
by virtue of subsection (8)(a) shall cease to have effect when the
Financial Services Compensation Scheme is amended by the Financial
Services Authority by virtue of subsection
(8)(f).
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Baroness Ashton of Upholland: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 1. In speaking to Amendment No. 1, I shall speak also to Amendments Nos. 6, 7, 8 and 10. This group of amendments will make a real difference to sufferers from mesothelioma and their families who have been or would have been affected by the recent House of Lords’ judgment in the case of Barker v Corus, and conjoined cases.
As noble Lords who have been following these issues will know, the case of Fairchild fundamentally changed some of the principles of liability, but did not resolve whether liability should be joint and several. It was important to clarify that. The practical effects that became apparent as a result of the House of Lords’ judgment have made this legislation necessary.
In practice, the claimant would have to trace all relevant defendants so far as possible before liability could be apportioned and full compensation paid, or alternatively to issue multiple claims to recover damages on a piecemeal basis. That would cause delays in resolving claims and increase difficulties for claimants when, as I am sure noble Lords will appreciate, they and their families are already suffering considerable pain and stress.
The Government have therefore acted quickly to address these problems. I am, as always, grateful to the noble Lord, Lord Goodhart, who in discussing these issues met my noble and learned friend the Lord Chancellor. I am very grateful to the team of the noble Lord, Lord Hunt, who have been extremely helpful in discussing these issues with us over the past few weeks and to the ABI, APIL and the TUC for their helpful and constructive input into these amendments.
By providing for joint and several liability, Amendment No. 1 will enable the claimant to recover full compensation from any responsible person. It will also apply to claims made by the claimant’s estate or dependants where he has not made or resolved a claim prior to his death.
The provision will apply regardless of
where the exposure has taken place. I am aware of views that this may
extend the principle contained in Fairchild. That is not the case.
Although the case of Fairchild related to a workplace exposure, the
principle contained in the House of Lords’ judgment was not
restricted to these cases. To restrict this provision to workplace
exposure would mean that some claimants affected by the Barker judgment
would be left in exactly the same difficulties that they are now
suffering, and that different claimants would be
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It also ensures that where a claimant has worked for a single employer who is now insolvent, but where only part of the period of exposure is covered by insurance, the claimant will be able to recover compensation from that insurer on the same basis as they could before the Barker case.
Subsection (3) makes clear that this provision does not affect the existing law on contributory negligence. Where a claimant is responsible for part of the negligent exposure, it is right that that should be reflected in the level of compensation that he is awarded when liability is determined. But the provision will apply where, for example, a self-employed person has been negligently exposed by another while working as a contractor. Subsection (3) also makes clear that a person who has paid full compensation can then seek a contribution to the damages awarded from other responsible persons under the Civil Liability (Contribution) Act 1978. We think it is right to make it as easy as possible for defendants and insurers to recover contributions. Subsection (4) will ensure that defendants and insurers are able to recover contributions in as straightforward a way as possible.
It is also important that the lawyers acting for claimants ensure that defendants are provided with a full employment and exposure history. We are looking at whether amendments to secondary legislation will help to achieve this.
Subsections (7) to (11) confer a power on Her Majesty’s Treasury to make regulations about the provision of compensation to a responsible person or an insurer of a responsible person in specified circumstances. These provisions are essential in helping to avoid delay in paying compensation and will allow the current practice to continue of employers or insurers making parallel payments with the Financial Services Compensation Scheme. As well as speeding up the claims process, that will also produce a fair outcome for insurers.
The subsections confer a power for Her Majesty's Treasury to make provisions that would facilitate the speeding up of payment of claims to mesothelioma victims. Those provisions would then enable responsible persons to claim money back from the financial services compensation scheme when another responsible person and their insurer are both insolvent and therefore unable to pay their share of compensation payments. The power includes the ability to deal with situations arising prior to the establishment of the financial services compensation scheme that were settled under the Policyholders Protection Act 1975.
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 underway 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 time scale 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.
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
without difficulty. Secondly, while subsection (4) goes a long way to
applying a presumption in favour of
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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 contrary to the principles of the rule of law
in this country”.—[Official Report, Commons,
18/7/06; col. 219.]
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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.]
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 of emotion—I understand that.
I only wish I could be certain that these amendments would enhance the
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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.
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