The Ministry of Justice has confirmed that the planned consultation to improve the process for mesothelioma claimants will be published in July 2013. Currently, a full 12 week consultation period is planned.
The consultation is intended to cover the Government’s agreement, made in July 2012, with the Association of British Insurers to speed up the process of compensating mesothelioma victims. It is also intended to meet the requirement to review the effect on mesothelioma cases of the changes to the recoverability of additional liabilities (success fees and ATE insurance premiums), as made by section 48 of the Legal Aid, Sentencing and Punishment of Offenders (LASPO) Act 2012, which came into force on 1 April 2013.
This article intends to examine the proposed change to the process of managing mesothelioma cases, which includes the creation of a dedicated online portal, supported by a dedicated pre-action protocol. Drawing on the observations and concerns around the draft protocols for other types of claims, we examine whether the nuances of a mesothelioma case could make it suitable to a portal process and if so, highlight some of the main features which any supporting protocol must realise.
Commitment to the cause
The LASPO Act 2012 and related reforms reflect the Government’s determination to tackle litigation costs and streamline the claims process. Managing claims through an online portal began in April 2010 when the road traffic accident (RTA) protocol was implemented, aimed at managing low value RTA claims valued between £1,000 and £10,000. Now, following extensive consultation, new protocols extending the scheme to claims up to £25,000 and to employers’ liability (EL) and public liability (PL) claims will be implemented at the end of July 2013. Accompanying fixed recoverable costs regimes (including for claims which fall out of the extended protocols) will also take effect. (Those protocols currently remain in draft form and are due to be finalised in May or June 2013.)
Our view has always been that the special status already given to mesothelioma victims under existing legislation, case law and working party guidelines meant that there ought not to have been an exemption under the LASPO Bill to those claims. The exemption having been made, there is still, however, divided opinion as to whether the reforms can be applied to mesothelioma claims.
A key feature of the concerns around further streamlining disease claims (and indeed EL/PL claims generally) concerns tracing an identifiable insurer. Whilst the EL Tracing Office (ELTO) has been established now for two years and has undertaken in excess of 4,050 searches, there remain difficulties in tracing or identifying insurers to deal with these claims. Of those 4,050 searches undertaken, 2,354 were successful. (Data taken between May 2011 and April 2012.)
Where insurance cover is disputed in mesothelioma cases due to missing or incomplete records, ELTO intends to introduce a Technical Committee to consider and adjudicate upon whether there was insurance in place with a particular insurer at the time of exposure. Where evidence of insurance is accepted by the Technical Committee, claims will be allowed to go into the proposed portal process and proceed within the same time limits that apply as if there was no dispute over insurance.
A tight timeframe
It waits to be seen how the protocol timeframes will be revised for mesothelioma claims. Those already dealing with mesothelioma claims have, of course, become accustomed to dealing with claims proactively and within tight time parameters by virtue of the Pre-Action Protocol for Disease and Illness Claims and the Mesothelioma Practice Direction at CPR PD 3.D. Nevertheless, the proposed timeframes for protocol compliance in the soon to be extended EL and PL portal have caused concern. In particular, fears have been expressed about the time periods for responding to claim notification: 30 and 40 working days in an EL and PL claim, respectively, which represent a significant reduction of the current 90 day period to investigate and respond to a claim.
Other key areas which will require particular consideration in a revised protocol are:
- Stipulation of sufficiently comprehensive details in the claim notification form, as now required in a letter of claim, including precise dates of employment/exposure.
- Assessment of damages. Living claims are currently fast tracked and claimants are awarded interim payments to enable them to have the benefit in life of some of their damages. It will be important that claimants provide their evidence and documentation in support of the quantum of the claim to enable a proper and fair assessment of damages and ensure claims are kept within the portal whilst dealing with interim payments.
- Loss of earnings. Under the current EL/PL protocol, an insurer is required to provide loss of earnings details within 20 days of making an admission. The sanction for failure to do so is currently not clear (and is assumed not to be a trigger for ejection from the portal). Should a similar requirement be added for mesothelioma claims, the accompanying protocol should specifically provide for the frequent need for pension information to be obtained and the corresponding delay that can occur from obtaining it from third party providers.
- Schedule of loss. The disease claimant is currently required to serve a schedule "as soon as practicable". It will be interesting to see whether this provision will be firmed up to stipulate a timeframe, which would be welcomed. (The extended EL/PL protocol places a 15 day requirement on the claimant.)
Cost saving measures
Notwithstanding the above observations, inclusion of mesothelioma claims in a claims portal process should provide a substantial cost saving for insurers. At present, even "fast tracked" mesothelioma claims attract uplifts as high as 100 per cent if a matter proceeds to trial. Costs claims can be and usually are very high with claimants arguing that the complexity of the issues warrants enhanced rates. The developments over recent years (including the fast tracking referred to above) has meant that, in reality, the issues are not complex. Unrebuttable proof of exposure above de minimis levels is sufficient to justify a finding of liability.
As with EL and PL claims, insurers and their claims handlers will need to invest in the resources needed to implement and comply with any disease portal. We have seen considerable investment in this area already with the introduction of ELTO and the support scheme for mesothelioma victims. The historic nature of the claims adds another dimension in terms of the resourcing necessary to undertake the initial and crucial investigations and it is essential that insurers put in place the processes and teams needed to respond proactively to the changes.