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I close by saying that I commend the orders to the Committee. They are very practical and, in some cases, quite minor, but they adhere to the principles of the primary legislation that we adopted some time ago.
That the Grand Committee do report to the House that it has considered the Safeguarding Vulnerable Groups Act 2006 (Regulated Activity, Devolution and Miscellaneous Provisions) Order 2010.
That the Grand Committee do report to the House that it has considered the Mesothelioma Lump Sum Payments (Conditions and Amounts) (Amendment) Regulations 2010.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government & Department for Work and Pensions (Lord McKenzie of Luton): My Lords, I shall speak also to the draft Pneumoconiosis etc. (Workers' Compensation) (Payment of Claims) (Amendment) Regulations 2010. I confirm that these provisions are compatible with the European Convention on Human Rights. I am very pleased to introduce here two sets of regulations on behalf of the Government, both of which increase payments made to people suffering or bereaved as a result of terrible industrial illnesses.
The first regulations are being made under the Pneumoconiosis etc. (Workers' Compensation) Act 1979. Their purpose is to increase the lump sum amounts paid under the Act by 1.5 per cent. The other regulations are being made under Part 4 of the Child Maintenance and Other Payments Act 2008. Their purpose is to increase the amount of compensation paid under the 2008 mesothelioma scheme, so that payments are made at the same level as those paid to mesothelioma sufferers or their dependants under the more generous 1979 Act. In addition, both sets of regulations provide for the majority of dependants who receive awards under the
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Noble Lords will be aware of the background to the 1979 Act, but it may help if I briefly recap. A person who is injured or contracts an industrial disease as a result of working for a negligent employer may sue the employer for damages. However, some diseases, especially those which are dust-related-for example, mesothelioma, caused by exposure to asbestos-can take a long time to develop and may not be diagnosed until many years after exposure to the agent that caused the illness. By that time, the employer responsible may no longer exist, resulting in people experiencing great difficulty in obtaining compensation for their illness.
The Pneumoconiosis etc. (Workers' Compensation) Act 1979 was introduced to help such people by paying lump-sum compensation to sufferers of certain dust-related diseases, or to their dependants, if they are unable to pursue civil action because their former employers have ceased to carry on business. The 1979 Act covers a number of respiratory diseases, most of which are directly related to asbestos exposure, including mesothelioma, pneumoconiosis, asbestosis, diffuse pleural thickening and primary carcinoma of the lung. The non-asbestos-related diseases covered include coalworkers' pneumoconiosis, caused by exposure to coal dust; byssinosis, caused by exposure to cotton dust; and silicosis, caused by exposure to silica, among slate miners for example. Noble Lords will need no reminding that all of these are terrible diseases and a heavy legacy of our industrial past.
Following the transfer of responsibilities for the 1979 Act to the DWP, we made a commitment to uprate the levels of payment under the Act annually. Traditionally, we have done so in line with increases to industrial injuries disablement benefit payments. Noble Lords will be aware that receipt of IIDB is one of the eligibility criteria for 1979 Act payments. Like other non-income-based social security benefits, IIDB is usually uprated in line with the September retail prices index. As a result of the recent global downturn, however, RPI moved into negative territory for the first time in around 50 years, standing in September 2009 at minus 1.4 per cent.
That negative inflation would have meant no increases in those social security benefits uprated by RPI, with those relying on them seeing their benefits frozen in cash terms from this April. As such, my right honourable friend the Chancellor announced in last year's Pre-Budget Report an increase for key carer and disability benefits of 1.5 per cent from April, providing help to people now, when they need it most. This includes an increase in IIDB. We are passing the same increases on to the 1979 Act payments.
From April 2010, the maximum amount payable to a person under the 1979 Act will increase to £75,176 for a person aged 37 or under at diagnosis. The actual amount of money paid as a lump sum under the scheme will of course vary for different people, based on the age at which they are diagnosed and their level of disability. The highest amounts are paid for those diagnosed at an early age and for those with higher
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As I said a moment ago, one of the key diseases that the 1979 Act was designed to compensate for is mesothelioma. It is a particularly unpleasant and fatal disease, caused almost exclusively by exposure to asbestos. Those with mesothelioma often have a short life expectancy and experience complex, debilitating symptoms. I am afraid that the number of deaths from mesothelioma in Great Britain has risen substantially during the past 30 years and continues to rise, with the peak not expected until sometime between 2010 and 2015. In 1968, 153 people died from mesothelioma. By contrast, in 2005, there were more than 2,000 deaths. Between 2006 and 2020, we expect that up to 30,000 people in the UK will die of the disease. Put another way, estimates indicate that one out of every 100 men born between 1940 and 1950 will die from the disease.
Although people who develop mesothelioma through their employment have access to lump-sum payments through the 1979 Act, there was previously no provision for people who developed mesothelioma but not as a consequence of their employment. We recognised that this was a weakness in the provision of compensation and, to remedy the situation, we introduced in 2008 the new mesothelioma scheme. The scheme provides for the first time lump-sum payments for mesothelioma sufferers who have been exposed to asbestos but not in the workplace. They may, for example, have been exposed to asbestos through a relative who worked with asbestos, or by living near to an asbestos-producing factory, or from self-employment. Prior to the commencement of the 2008 mesothelioma scheme, those people, whose suffering is as great as those who develop this dreadful disease as a consequence of their employment, may have had no other means of redress.
Up to the end of February 2010, 743 mesothelioma sufferers and 74 dependants had received help from the scheme. The amounts payable to sufferers ranged from a minimum of £8,197 to a maximum of £52,772, with an average amount of around £16,000 being paid.
The cost of the 2008 mesothelioma scheme is met by compensation recovery; that is, compensation recovered from individuals who are successful in a civil damages claim but who have already received a payment under the 1979 Act or the 2008 scheme. When we started the scheme in 2008, we set awards at a level consistent with the amount of recoveries we expected to make. This meant that payments through the 2008 scheme were lower than amounts payable to mesothelioma sufferers under the 1979 Act.
When we introduced the 2008 scheme, we made a commitment to increase the level of payments to match amounts payable to people with mesothelioma under the 1979 Act at the earliest opportunity and as levels of compensation recovery allowed. We expected to be able to do so in the scheme's third year of operation, in 2011. I am very pleased that we are now able to deliver that commitment from April, only 18 months after the scheme started.
From April 2010, therefore, lump-sum payments from the 2008 scheme will increase by around 40 per cent to the same level as those paid under the 1979 Act, taking into account the 1.5 per cent increase to 1979 Act payments. The minimum payment to sufferers therefore increases from £8,197 to £11,678, and the maximum from £52,772 to £75,176. This is the first increase in the amounts payable under the 2008 mesothelioma scheme since its commencement on 1 October 2008. It is our intention in future years to maintain parity in the rates payable under both schemes.
The third element of this package of regulations is an increase in the level of payments made to dependants under both schemes. Currently, payments made to dependants under both schemes are at a much lower rate than those made to sufferers during life. We recognise the terrible effects that these diseases can have on families, who have to cope with the effect of the disease on their loved ones, witnessing their pain, suffering and, ultimately, their death. While we acknowledge this by making payments to the families of people who die from these diseases, payments have been at a much lower rate than those made to sufferers during life.
That differential in payments puts pressure on sufferers during already extremely difficult times. For example, many feel that they need to rush through a quick claim to the department in order to maximise compensation for their families. Some are too sick to make a claim before dying and therefore their families are able to claim only the lesser amount after the claimant's death. In addition, because mesothelioma is difficult to diagnose and the disease onset is rapid, some sufferers are not diagnosed until after death.
We have listened to the argument put forward by stakeholders and parliamentarians that the difference in payment is unfair and unhelpful. To help families to cope during these extremely difficult times, dependants will now receive an increase of up to £5,000 above the current pay scales. This brings the rate of payment between sufferers and dependants closer together and goes some way towards our commitment to bridge that gap. Dependants who already receive close to the amount paid to the sufferer will receive a proportionate amount, bringing their award up to the level of that paid to the sufferer in life.
I am very pleased that these schemes are now performing an important role, providing substantial financial support at very difficult times. However, I am aware that this success is a sad reflection of the rising number of people being affected by asbestos-related diseases. Noble Lords will, I am sure, agree that, while no amount of money will ever compensate individuals and families for the suffering and loss caused by mesothelioma, those who are suffering rightly deserve some form of monetary compensation, and it is essential that sufferers receive compensation before it is too late.
These regulations increase the levels of support through the government compensation schemes; they help to ensure that mesothelioma sufferers are able to receive the same amount of compensation from the Government, regardless of whether the disease is a consequence of their employment; and they go a long
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Lord Freud: My Lords, I thank the Minister for introducing these regulations, which I welcome. Although I do not think that I need to declare an interest, I mention that my father died of mesothelioma a few years ago, albeit before the 2008 scheme was introduced. However, I can attest to the speed and severity with which these lung diseases attack and kill those who have been exposed. I welcome the proposals both to have higher rates for people with mesothelioma and for that payment to go to dependants as well to get rid of the anomaly and extra time pressure that the differentiation created.
I am also pleased that statutory payments for pneumoconiosis are being uprated in line with the industrial injuries disablement benefit, which is increasing rather faster than inflation. It is proving to take quite a long time to process payments, and this uprating at least provides some compensation for the delays.
When debating, on 5 March, the Damages (Asbestos-Related Conditions) Bill introduced by the noble Baroness, Lady Quin, my noble friend Lord Henley probed the Minister a little about the establishment of a working group to speed up the payments to sufferers and their dependants. I was hoping that we might be able to hear a little more about that group today. Can the Minister give us some more details?
Baroness Thomas of Winchester: My Lords, I too, thank the Minister for explaining the detail of these important regulations and giving much of the background, particularly the numbers of those affected under the schemes. I am also grateful to the department, particularly Susan Parker, who explained how the compensation scheme worked-in particular the fact that sufferers do not face a long wait before receiving a pay-out. From these Benches, we fully support the regulations which increase the rates of payments made under both the 1979 Act and the 2008 scheme.
The diseases we are talking about are, as we have heard, very serious respiratory diseases brought on by people working with asbestos, living near an asbestos-producing factory, or perhaps even living with someone who worked with asbestos. As the Minister said, these diseases do not always manifest themselves until 20, 30 or 40 years later, and when the most serious-mesothelioma-is diagnosed, the prognosis is grim, as the noble Lord, Lord Freud, has testified. These diseases are not confined just to the industrial heartlands of the country, but are found across the UK-for example, in workers who many years ago produced brake linings in the car industry. The incidence of mesothelioma is expected to peak in about five years' time, which was something of a surprise to me, since the dangers posed by asbestos itself have been known about for a long time now.
I pay tribute to the Health and Safety Executive, which has done a great deal to make sure that the working environment is now much safer than it was when these devastating diseases, caused by exposure
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Legislation was introduced in 1979 to help those diagnosed as suffering from a dust-related industrial disease by a lump sum payment, in addition to any industrial injuries disablement benefit. This was, as we have heard, because many employers could not be sued since they were no longer in business, so compensation was very difficult to obtain. I gather that the DWP is at the moment consulting on improving support for people who need to trace employers' liability insurance policies to obtain compensation for an accident or industrial disease. Although the Association of British Insurers and the Lloyd's Market Association have committed since 1999 to a voluntary code of practice for tracing employers' liability insurance policies, there are still believed to be more than 3,000 people who are left without help. I believe the Government now propose to establish both an employers' liability tracing office and an employers' liability insurance bureau to oversee this process. Perhaps the Minister would confirm this. Could the Minister also tell me whether retired members of the Armed Forces, who contracted mesothelioma while serving, are covered by these regulations?
The 2008 mesothelioma scheme, which, as we have heard, pays out a lump sum to those ineligible for the original 1979 scheme because they contracted the disease through environmental exposure, is wholly funded from compensation recovery. It is good news that the level of civil damages received is higher than expected at this point and that, therefore, all payments are being increased to the 1979 level from 15 April so that the amounts are equalised to all sufferers, however they contracted the disease. It is also good news that awards to dependants will be increased by up to £5,000 by way of a lump sum.
It is worth making it clear that the 1.5 per cent uprating we are talking about in relation to the regulations under the pneumoconiosis Act is a draw-down from next year's uprating, and is not an uprating in its own right, so to speak. It will therefore not be consolidated into the base level for future upratings. I do not envy the job of whoever is the Minister in having to explain next year's uprating. In closing, I reiterate that we fully support these important orders and send our sympathy to all those suffering from these terrible diseases and their dependants.
Lord McKenzie of Luton: My Lords, I thank both noble Lords for participating in this discussion and their support for these regulations. It is a great sadness to hear of the personal experience of the noble Lord, Lord Freud, and his understanding of the impact of mesothelioma on individuals and their families.
The noble Lord asked about the working group on the processing and the time in which claims may be paid. With regard to the 1979 Act, claims are processed
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"We will therefore establish a working group composed of claimant solicitors, trade unions, insurers, the judiciary, and civil servants to examine litigation practices and procedures for compensation claims relating to mesothelioma, and identify options for streamlining them in order to reduce the time taken to conclude cases. In particular the working group will consider ... the operation of the Practice Direction for court proceedings introduced in April 2008 to ensure that it is working effectively ... possible solutions to difficulties arising from delays in obtaining medical reports because of the shortage of medical experts in this area ... why more claims don't settle, and whether any provisions in relation to pre-action behaviour would be helpful in reducing the time taken to establish liability without the need for court proceedings ... We also intend to consider changes to the substantive law to ... resolve difficulties experienced by mesothelioma sufferers as a result of differences in the value of claims which are settled before or after the death of the person concerned and to clarify the limitation period for bringing a claim ... clarify that the limitation period for bringing a claim runs from the date that the claimant becomes aware that he or she has mesothelioma rather than from the date they became aware of the original exposure to asbestos" [Official Report, Commons, Col. 81WS].
The noble Baroness, Lady Thomas, gave her support to these regulations, and I am grateful for that. She made reference to the fact that the instance of mesothelioma has yet to peak. One challenge of this terrible condition is its long latency period. That raises all sorts of issues. The noble Baroness praised the HSE, which I was pleased to hear, as that does not happen often enough. It does lots of work at the moment trying to spot what might be the long-term latency issues of other modern practices-for example, nanotechnologies-and what that might mean in future.
The noble Baroness said that asbestos is banned in the UK but not in the developing world. I regret that asbestos is still commonly used in the third world; my understanding is that it is commonly used in India, both in processing and uncontrolled environments, such as ship-breaking. The HSE works closely with colleagues abroad, and I shall certainly ask them to continue to share their expert surveillance. The noble Baroness asked about Armed Forces personnel; they are not covered by these regulations, but they are covered by separate arrangements provided by the Ministry of Defence.
The noble Baroness asked, too, about proposals around employers' liability insurance bureaus and the employers' liability tracing office. We fully appreciate the difficult situation facing individuals who struggle to trace a relevant insurance policy. While the vast majority of individuals are able to find an employer or
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In addition to providing government support to individuals, we want to ensure that people can access civil compensation. We have therefore been working to improve people's ability to trace employers' liability insurance policies. In 1999, in conjunction with the insurance industry, we launched a voluntary code of practice to help to trace these policies where other routes have failed. The code has led to some improvement, but there are still too many people who are left without help. The Government do not think that is acceptable and therefore believe that more must be done.
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