In our blog post on 9 May 2014, we set out details of the new Diffuse Mesothelioma Payment Scheme (the “Scheme) which opened to applications from victims of mesothelioma and their dependents in April 2014. The purpose of the Scheme is to assist those victims of mesothelioma, a disease with a latency period of up to 40 years, and their dependents who cannot access compensation elsewhere, usually because they cannot trace their employer or their employer’s insurer.

The Scheme will be funded by the insurance industry and we can now report that details of the funding arrangements have been published in the Diffuse Mesothelioma Payment Scheme (Levy) Regulations 2014 (the “Regulations“) which came into force on 28 November 2014.

The Regulations

Under the Regulations, active insurers are required to contribute to an annual levy which will meet the costs of the Scheme. The amount each active insurer is required to pay is based on their relative market share for the calendar year two years before the reference period.

The Regulations require the Secretary of State to notify active insurers in writing of the amounts they are due to pay, the date or dates in the financial year by which the payment amount is required and details of how the payment amount can be made. Active insurers must be given sufficient information to enable them to determine how the payment amount in their case was calculated.  The Secretary of State is also required to publish the costs of the Scheme annually.

Costs 2014-2015

The Department of Work and Pensions announced on 28 November 2014 that the estimated total amount of the levy for the first year of the Scheme is £32 million, although as this is a demand-led scheme the final costs may vary.   This total amount will be payable by active insurers by the end of March 2015 and in accordance with the Regulations, each active insurer will be informed of the specific amount they will be required to pay.

The Scheme appears to have been busy so far. The Scheme started paying out to claimants in July 2014 and, according to the DWP, it has so far received over 200 applications with approximately £16.5 million being paid out at an average of £126,000 per claimant (slightly higher than the £123,000 average payment expected before the Scheme opened). Victims of mesothelioma and their dependents are clearly benefiting from this additional avenue from which to claim compensation for their suffering from this terrible disease.