On 25 July 2012, the Department of Work and Pensions (DWP) introduced a new support scheme designed to compensate sufferers of mesothelioma as a result of negligent exposure to asbestos at work, who are unable to claim compensation because they cannot identify a solvent employer or employers’ liability (EL) insurers.
The scheme will be relevant for anyone diagnosed with mesothelioma from the date of its launch. The scheme is, however, subject to relevant primary legislation being passed and it is anticipated that it will take until July 2014 for it to be fully operational.
Outline of the scheme
It will now be compulsory for all EL insurers to become members of the Employers’ Liability Tracing Office (ELTO). This will include companies who have provided EL insurance in the past.
The ELTO was set up in April 2011 by the Association of British Insurers (ABI) on a voluntary basis and it maintains an electronic database of EL policies. Currently 99 per cent of EL insurers provide data to the ELTO. The government announcement will, therefore, ensure that 100 per cent of relevant insurers are captured, thereby ensuring that all liable insurers pay claims.
Government figures suggest that some 3,000 people will be eligible to apply to the scheme, with approximately £300 million in payments being made in the first 10 years.
The intended integrated package of measures will include a levy on EL insurers to fund the scheme at an estimated cost of £25 to £35 million a year. This cost will be in addition to the £200 million the insurance industry already pays each year in compensating mesothelioma sufferers.
As well as compulsory membership of the ELTO, the investigative powers of the ELTO is expected to increase, with a technical committee being created to permit the ELTO to determine disputes as to the existence of insurance cover. The improvements to the ELTO are also expected to benefit sufferers who can identify a solvent employer/insurer - it is anticipated that an additional 124 claims for full compensation will be made resulting in additional compensation payments of £19.8 million.
The "package of measures" includes changes to the compensation process in order to promote greater efficiency and cost saving. These changes are proposed in line with the wider civil justice reforms, including those now encapsulated in the Legal Aid, Sentencing and Punishment of Offenders (LASPO) Act 2012 (containing the Jackson proposals) and the extension of the RTA portal to other types of claims (including EL and PL claims).
Specifically, measures intended to improve the process for mesothelioma claimants include:
- Changes to the Civil Procedure Rules to support the use of the dedicated pre-action protocol, including early disclosure
- The creation of a dedicated online portal to enable claimants to register claims, exchange information with the defendant and settle claims
- Improvements in providing the information held by government needed to support claims e.g. standardised medical diagnosis, employment schedules from HMRC and information on state benefits from the DWP
Under the Scheme the Government will be able to recover from solvent insurers or other paymasters in the course of civil claims the payments that it makes to mesothelioma sufferers by way of benefits and lump sum payments. However, it is not envisaged that the scheme will be able to offset these from any of the actual scheme payments.
Whilst those from the claimant camp have voiced concerns that the scheme will not apply to a wider range of people with asbestos-related diseases, the ABI has confirmed its commitment to working with the government to provide support to mesothelioma sufferers. Our clients have and continue to demonstrate their commitment to resolving these claims and the measures being introduced should, we believe, have a positive impact on the overall process.
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