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As I said in introducing new clause 13, the legislative action that we are taking to reverse the effects of the House of Lords decision in Barker is just a first step, and we fully agree that more can be done to improve the system for dealing with these claims and to ensure that claimants receive the compensation to which they are entitled as quickly as possible.
With that in mind, officials in my Department and in the Department for Work and Pensions are working with stakeholders such as the ABI, the Association of Personal Injury Lawyers and the TUC to identify ways of speeding up claims. A number of suggestions have already been made about how that should operate, and we are discussing how to speed up the tracing of employers and insurers and how to make best use of specialism throughout the system by insurers, lawyers and the courts. We are also considering all the options and working with stakeholders to find a fair and workable solution. I believe that until that work is completed, it would be premature to take powers in legislation to adopt a particular approach that might not in practice turn out to be the most appropriate.
New clause 7 creates a cause of action in cases where a chemical or substance has lodged in the body as a result of negligence or breach of statutory duty; whether or not any symptoms have been caused at the time that the action is commenced or brought to trial. My hon. Friend the Member for Hendon (Mr. Dismore) raised the issue of pleural plaques on Second Reading, and the focus of this provision may be intended to create a cause of action in respect of pleural plaques.
As I said both on Second Reading and in answer to parliamentary questions, pleural plaques are small localised areas of fibrosis found within the pleura of the lung caused by asbestos exposure, which do not impair lung function. They are an indicator that a person has been exposed to asbestos in the past and may have a slightly increased risk of going on to develop a more serious asbestos-related illness in the future.
The question of whether pleural plaques should be a compensatable disease in respect of which a cause of action can be brought is currently the subject of an appeal to the House of Lords, so I do not believe that it is right for the Government to pre-empt the Law Lords’ consideration of those cases by legislating in that way at this time.
Chris Bryant: But if the judges get it wrong, which they seem to do quite often, what legislative remedy would be available in the fairly near future?
Bridget Prentice: I hope that, with the debates going on here and in the other place and with the careful consideration of the judges, they do not get it wrong. However, I can tell my hon. Friend that the Department for Work and Pensions will be launching a Bill in the not too distant future. It is not for me to say at this stage, but if such a Bill were to be introduced, my hon. Friend and others would be able to lobby my colleagues in the DWP to establish whether further legislation was appropriate.
To return to the new clause, it is undesirable in itself. It is worded in very general terms and could potentially extend to a range of other situations where no actual damage is apparent at the time an action is commenced or brought to trial. That could create confusion and uncertainty in the law and lead to extensive and costly litigation over the possible circumstances in which it applied.
On new clause 8, prior to May 1987 service personnel were prevented from pursuing claims for compensation from the Ministry of Defence by section 10 of the Crown Proceedings Act 1947. Crown immunity prevented claims from being made prior to 1947, but section 10 was repealed by the Crown Proceedings (Armed Forces) Act 1987. Since the change in the law, which was not made retrospective, service personnel who suffer loss or injury as a result of negligence by the Ministry of Defence have been entitled to make common law claims for compensation. When compensation claims are submitted, they are considered on the basis of whether the Ministry of Defence has a legal liability to pay compensation. Where there is a legal liability to pay, compensation is paid.
At the time of the passage of the 1987 Bill, the question of retrospection was debated and motions to allow members of the armed forces, past and present, to pursue claims for injury or death suffered in incidents since 1947 were moved, but either defeated or withdrawn. The prevailing view at the time was that, short of trying to cover all incidents and all types of injury going back to 1947, there was no logical point at which to draw a line, and that making the Act retrospective would create many new examples of unfairness and injustice.
That clearly shows the difference between the retrospectivity that we are introducing in specific cases and more general retrospectivity, which is not the way forward. The perceived unfairness in the way in which claims for compensation from former service personnel suffering from an asbestos-related disease were handled was the subject of a review, the outcome of which was announced in 2001.
Careful consideration was given to this apparent unfairness in compensation arrangements, and to the scope for providing additional help. However, the review demonstrated that compensation through war pensions and allowances or under the common law can be shown to be broadly comparable over time, and that there was therefore no general unfairness in the way in which these claims were handled. As it would be inequitable to treat this group in isolation in terms of common-law compensation, thereby creating many examples of unfairness and injustice, Ministers at the Ministry of Defence decided not to make any changes to the current arrangements, and that remains the Government’s view.
On that basis, I hope that the House will support new clause 13 and attendant amendments, which will ensure that mesothelioma sufferers can get the compensation that they need and deserve. I also hope that other amendments will be withdrawn at the appropriate time.
Mr.
Oliver Heald (North-East Hertfordshire) (Con):
We welcome new clause 13, which will overturn the
recent judgment in Barker v. Corus. We are dealing here with a
matter of public interest. It is important to recognise that the
Government took the case to the
House of Lords as a test case. It is more than odd, therefore, that
although the judgment was delivered in May 2006 the Government are now
introducing emergency legislation to overturn what they argued for in
court as recently as six weeks ago.
The Minister rightly says that Miss Barker brought one of the cases and that another applicant—plaintiff—brought another case against companies that are now under the umbrella of British Shipbuilders, a statutory corporation that is owned entirely by the Government and sponsored by the Department of Trade and Industry. Therefore, a Minister in that Department agreed to the Government taking the case all the way up to the House of Lords to establish something that now—just a few weeks later—they think is so unpalatable that they must introduce emergency legislation.
The solicitor who acted for British Shipbuilders has written to me making the point that this is a matter of public interest. The public are entitled to know the identity of the DTI Minister who made that decision, how much the Government have spent on these cases that have gone through all the courts up to the House of Lords, and whether the decision made in the House of Lords will now be overturned. Will Miss Barker get her costs, and what exactly was going on, because this is not an advert for joined-up government?
Mr. Redwood: I am grateful to my hon. Friend for bringing this conundrum before the House. He might be right that the fact that people did not talk to each other was a result of a lack of joined-up government, but if that were the case I would be surprised, as the civil service is usually very good at clearing such matters. Could it not be that people thought that they could get away with this, then discovered how embarrassing it was and, having seen the strength of representations, have now had second thoughts?
Mr. Heald: Ministers suggested in meetings that this was all to do with the insurance industry, but in fact the industry funded none of the cases that went to the House of Lords under the Barker v. Corus umbrella: the Government funded two of the cases and one was funded privately. Those test cases were pursued because a lot of former Government employees, who worked in the Ministry of Defence and other Departments, were exposed to asbestos. This will be expensive for the Government in the long term, and I guess that they were attempting to ensure a smaller bill than they might otherwise have.
There must have been a moment—I imagine that it occurred in the Department for Constitutional Affairs—when someone suddenly said, “What have we done?” It was at that point that the decision was made to reverse this, and to do so quickly. I welcome that.
Simon Hughes: I share the hon. Gentleman’s view of the strange history of these matters. One of his colleagues asked the Under-Secretary whether she could provide an estimate of the cost of the proposal. Has he, from his contacts or work, been able to come up with an immediate estimate for the first set of claims or an annual estimate thereafter?
5.15 pm
Mr. Heald: That is extraordinarily difficult to do because the cases will not peak until 2020 and the disease is unpleasant and difficult. The insurance industry has provided an informal estimate of up to £15 billion.
Mr. Greenway: The all-party insurance and financial services group was briefed on the matter only last Tuesday. There are some 2,000 asbestosis-related deaths per annum. Average life expectancy after diagnosis of mesothelioma is one to one-and-a-half years. The average settlement is £150,000. We are therefore considering probably £15 billion over five years and perhaps as much as £30 billion over 10 or 15 years.
Mr. Heald: I heard a similar figure. The Government will doubtless be considering their liability, Department by Department, on the new basis. However, I know from previously asking the question that Ministers do not have an estimate in mind.
Mr. Frank Doran (Aberdeen, North) (Lab): The hon. Gentleman makes a mountain out of a molehill. He knows that, before Barker, the Fairchild case dramatically altered the way in which liability is assessed. Any Minister worth his or her salt who was given legal advice about the implications of that would be duty bound to follow it and do what was done in the Barker case. When the Conservative party was in government, similar things happened. It is great fun to develop conspiracy theories, but they have no basis in fact.
Mr. Heald: The hon. Gentleman should not talk in terms of conspiracy theories. That always worries me. Let us consider the position of Miss Barker. Her case could have been settled on the Fairchild basis of joint and several liability. There was no reason not to do that. However, the Government decided to make it a test case, take it all the way to the highest court in the land—the House of Lords—and see what the judgment would be. Given the Under-Secretary’s position today that Fairchild is correct and the right law for our country, it is odd to have gone all the way to the House of Lords, arguing something completely different, barely six weeks ago.
Bridget Prentice: Let me clear up the matter once and for all and add to the comments of my hon. Friend the Member for Aberdeen, North (Mr. Doran). The hon. Gentleman suggests that the Government tried to avoid paying compensation. Our ability to introduce amendments so quickly shows that every member of the Government who is involved in the matter recognised the importance of reversing Barker. There was no shilly-shallying about that. It is nonsense to suggest otherwise.
Mr. Heald: The Under-Secretary knows that I have the highest opinion of her kindness and consideration. I am sure that, if she were faced with the difficult position post-Barker, especially with all her colleagues making representations to her, she would do the right thing. However, can she name the Department of Trade and Industry Minister who gave the go-ahead for the case to be pursued all the way to the House of Lords? Was it the current European Trade Commissioner? We are entitled to know.
Mr. Andrew Dismore (Hendon) (Lab): Will the hon. Gentleman give way?
Mr. Heald: I must make some progress. The hon. Gentleman has much on the selection list and we will hear from him later.
As I said earlier, what we are considering is hardly an example of joined-up government. However, we support the Government’s decision to reverse the court decision. It is important to be sure that it goes as far as necessary.
Nick Starling, director of general insurance at the Association of British Insurers, said that the organisation remains concerned that the new clause still does not tackle some of the problems that the ABI identified. He said that, in particular, analysis of several scenarios revealed a danger that some claimants will not receive full compensation. That is likely to occur when all the defendants are insolvent and there are gaps in insurance cover. I would be grateful if the Minister gave a fuller response than the one that she gave earlier about that, because it would be good to get this matter sorted out at this stage.
Mesothelioma is a dreadful disease. It is caused by asbestos fibres and can lie dormant for 30 to 40 years. Following diagnosis, it is incredibly aggressive and often leads to death in one to two years. It is a very painful and distressing condition, and it is often the result of a failure to provide a safe system of work. Not every sufferer will have a legal case, but some of those who do cannot trace their former employer or his insurer. The problem with doing no more than reversing the Barker judgment is that it will do nothing to speed up compensation, to make the process less adversarial or to give those who cannot trace their former employers or their insurers access to justice. Such a move would also require expenditure on legal costs that might not be strictly necessary.
There is a case for establishing a scheme to compensate those who have a case and to provide for later recovery and apportionment of damage, and I am pleased that the Minister is having discussions on this matter. My new clause 6 would enable her to take legislative powers now. She has told the House that the Department for Work and Pensions will make a statement on mesothelioma. Is a separate body part of the solution that is being considered?
Mr. Dismore: The hon. Gentleman has not made it clear who would foot the bill for the scheme that he proposes. Is he suggesting that it should be the Government, or perhaps the insurance industry, through a pool system such as that used for motor accidents involving uninsured drivers?
Mr.
Heald: As the hon. Gentleman will know, discussions are
continuing. I understand that one of the suggestions on the table is
for a system similar to that in Holland. I recently attended the
Insurance Times conference, at which representatives of the
Association of British Insurers were giving their ideas on this matter.
They felt that it would not be necessary to go as far as the hon.
Gentleman suggests, but that if we were able to take the liability of
the compensation scheme, of the Government and of the insurers, and to
apportion claims on that basis, no additional funding would be required
from the Government.
That would have to be fully discussed. I think that the hon. Gentleman would agree, however, that it would be good if we could take a large proportion of the legal costs out of the equation. I realise that he might find that difficult, given his background of 15 years with Thompsons and several years with other solicitors working in the claims field. One of the most important aspects of the claims is that of legal costs, and of how much money is being taken out of the system by claimants’ solicitors and others.
Does the Minister agree that it will be necessary to have appropriate rules of court to underpin the workings of new clause 13, and particularly of subsection (4)? Can she give us an assurance that Ministers will do all that they can to ensure that such rules are agreed and adopted as soon as possible? In particular, claimants will have to give enough information about their work history at an early stage to allow a fair apportionment of contributions to be made or agreed between defendants. The Minister said that that might be covered by secondary legislation, but does she agree that it will also be necessary for the rules committee of the High Court to make a decision on this matter? I believe that it will also be necessary for the committee to make a decision on the mechanisms necessary to effect the proposed simple system of apportionment taking into account the length of the period of exposure, but with a court discretion to adopt a different measure in exceptional cases. It would be helpful if Ministers were prepared to use their good offices to help with that process and to encourage a speedy outcome on the rules.
While on technical matters, I also wonder whether it might be wise to explain, in proposed new subsection (5) to amendment No. 8, that only a claim affected by the section dealing with mesothelioma damages may be reopened. I also wonder whether the word “only” should appear after “settlement” in proposed new subsection (5)(c) and after “determination” in proposed new subsection (6)(c). The Minister might wish to consider these technical drafting points before the Bill is considered in the other place.
I am sorry to tell the hon. Member for Hendon(Mr. Dismore) that I do not support his new clause 7. I believe that it would be premature to accept such a proposal when the case of Rothwell v. Chemical & Insulating Co. Ltd is about to go to the House of Lords. I also wonder how confident he is that the decision is the right one, as he must recognise that if every risk became a cause of action, with damages attached, that would mean a lot more work for claimants’ lawyers. In the case of Rothwell, the Lord Chief Justice, Lord Phillips, said:
“Litigation is expensive and under our system the costs fall to be borne by the unsuccessful party. We consider it plainly desirable that claimants should not be permitted to pursue claims for trivial injuries. The fact that negligence has produced a physiological change that is neither visible nor symptomatic and which in no way impairs the bodily functions should not attract legal liability.”
He went on to say that the costs of litigation in cases such as those before us tend to be disproportionate to the damages recoverable.
When the hon. Gentleman speaks to his new clause, which he has registered an interest in doing, I would be grateful to know whether he really believes that the mere risk of damage, which might be tiny, should be actionable. If so, why does he say that? I accept the Minister’s view that the wording of his new clause is loose and unambiguous, and that it could allow a range of cases that do not currently attract liability to do so—for instance, those of pedestrians who have inhaled exhaust fumes, people who have eaten fatty food, home owners who have inhaled paint fumes while decorating, or those who have drunk a hot drink from a machine. All those people have taken risks. Is the hon. Gentleman seriously saying that they should all attract compensation, regardless of whether they have suffered any injury, simply on the basis that they are worried about it.
Mr. Dismore: Of course not, but my amendment refers to the lodging of a substance, whereas the hon. Gentleman’s examples are purely transitory and do not lodge in the body.
Mr. Heald: The hon. Gentleman will correct me if I am wrong, but it will take the courts many a long year to work out what “lodging” means. Does he accept that a range of issues relating to time limitation will be raised? [Interruption.] I hear the Cambridge law faculty agreeing. If “lodging” is the triggering factor, it seems to me that there will be plenty of work for those whom the hon. Gentleman knows well.
I agree with the Minister that the hon. Gentleman’s new clause would be a fundamental change to the legal framework and principles of common law, with wider ramifications. Those are the main points about the first group of amendments. We will certainly support the Minister on new clause 13.
Mr. Clapham: I thank my hon. Friend the Minister for introducing the new clause, which will restore fairness where there was unfairness following the Barker decision on 3 May. Put succinctly, it would say that where a person develops mesothelioma as a result of being subject to a risk, the person who exposed them to the risk is liable severally and jointly. That is how it should be. As the law stood, enormous unfairness was created, and the Minister explained how it could impact to reduce damages. For example, a widow who might have been able to trace only two of her husband’s 10 employers would have received just 20 per cent. of the damages. Clearly, that was unfair.
There will be a very large number of such cases, as there are 2,000 diagnoses a year. The hon. Member for North-East Hertfordshire (Mr. Heald) referred to costs running to perhaps £30 billion. Looking to the future, however, means that there can be some certainty about the bills that the insurance industry, as well as Government, will face, and some preparation can be made.
5.30 pm
We know that the number of claims will be significant. It has been suggested that over 50 years there could be more than 180,000, because people have been exposed to asbestos since the 1950s. I think it fair to say that no employer could argue that he or she was not aware of the effects of asbestos from 1965 onwards. Clearly we must deal with the issue, and I believe that my hon. Friend the Minister has tackled it very fairly.
In summing up the debate, my hon. Friend may tell us whether people will still be able to claim under the Pneumoconiosis Etc. (Workers’ Compensation) Act 1979 once the position before 3 May has been restored. The Government made it possible for them to do so at the time of the Fairchild case. People were queuing up behind that case, waiting to get their own cases into court. Given the seriousness of the disease from which they were suffering, the then Secretary of State introduced the potential for them to claim under the Act.
The hon. Member for North-East Hertfordshire said that my hon. Friend the Minister was thinking kindly. The Labour Government at that time was much more compassionate than, for instance, earlier Tory Governments. One example is the Tory Government’s refusal in the early 1990s to implement a scheme for miners, although it would have saved the taxpayer an enormous amount of money.
Mr. Heald: The hon. Gentleman knows as well as I do that the Government set up the compensation scheme following a court ruling. In effect, they had to set it up because of the ruling.
Mr. Clapham: The hon. Gentleman will be aware that when we were arguing for such a scheme, his party in government took the view that the medical knowledge of the day could not differentiate damage done to the lungs by dust from damage done to them by smoking. That was what led to the unions taking the case to court. We found that medical evidence had been available to the Government, including the findings of a longitudinal study of miners in Belgium. The Government used it when they introduced the industrial injuries disablement scheme for chronic obstructive pulmonary disease, but it was left to the present Government to implement this scheme. I agree that it might have been devised in a different way, but it was introduced in its present form, and it has brought a great deal of help to elderly miners suffering from COPD.
My hon. Friend the Minister should also be congratulated on the retrospectivity in the new clause. Some cases will have been trapped between 3 May and the date of Royal Assent, and we need a mechanism for dealing with them. I believe that the Bill provides such a mechanism. As the hon. Member for North-East Hertfordshire said, there may well be cases in which the employer or the insurance company cannot be traced and a claim must be made under the Financial Services and Markets Act 2000. Perhaps we can try to ensure that almost the full value of a claim can be obtained.
The hon. Gentleman referred to the Minister’s discussions about the type of scheme that would be introduced. I have always been a scheme man for these kinds of cases. I hope that we will look at embracing the total number of mesothelioma cases and include in the scheme, for example, members of households who have been exposed to the fibre brought home on a worker's clothes. People in that position cannot claim industrial injuries disablement benefit. That may be another area that we need to look at when we get the Green Paper on industrial injuries. However, overall, the new clause is good. It makes the Bill a substantial measure and I congratulate the Minister on it.
Simon Hughes (North Southwark and Bermondsey) (LD): May I first pay warm tribute to the hon. Member for Barnsley, West and Penistone (Mr. Clapham)? He, naturally, because of his constituency and background—but not necessarily because of that—made it clear that the issue would not go away from our deliberations in Parliament and I unreservedly pay tribute to him for that.
I thank the Minister for her commitment to ensure that, if it were humanly possible, the new clause and the other new clauses and amendments would be included in the Bill during its passage through this House. In the debate on Second Reading, the issues were well and truly aired. She made a commitment to do what she could. At the beginning in Committee, we said that we were happy to take the new clause in Committee if it were possible. It just was not. I do not blame anyone for that and the Minister has kept us all well informed at all stages. I am pleased that we have the opportunity to include the new clause before the Bill leaves the Commons, which is the right place for the matter to be discussed, and where people who represent past, present and prospective sufferers of this terrible disease can express their strong views on behalf of their constituents.
One or two of my colleagues have raised the matter before. I mention them because they, like colleagues on both sides of the House, have, perfectly properly, a constituency interest in these issues. My hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) was supportive the other day on the basis that there should be a scheme, which should be moulded to look after the people who are suffering. My hon. Friend the Member for Dunfermline and West Fife (Willie Rennie) has in his short time in the House already expressed an interest, as has my hon. Friend the Member for Rochdale (Paul Rowen), who again has an obvious constituency commitment. I made it clear from the Front Bench on Second Reading that the Liberal Democrats would do all we could to facilitate the speedy passage of the legislation.
There is one technical point. Perhaps there is more than one, but there is one important technical point that my hon. Friend the Member for Cambridge (David Howarth) will want to raise about the specific implications of these proposals for the law and about the importance of getting all this right. It is important that we do not go back to the position of the law before the Barker v. Corus case and discover that people who want to be included are excluded. I will leave my hon. Friend to make that case, if he catches your eye, Madam Deputy Speaker. We must ensure that we do not lose opportunities to adjust the scheme if there is anything we need to do to catch everyone we need to catch.
I will make
some quick points because many other colleagues want to speak. This
disease is serious and sudden in its manifestation and consequences. It
affects people who have worked away, often in dangerous and hard jobs,
in all sorts of industries— mining, shipping, industrial
warehousing, as laggers, painters, doing all sorts of jobs—and
discovered, after what could be a long lead time, that they are
suffering from mesothelioma and that the asbestos fibres may eventually
have fatal effects. The hon. Member for Barnsley, West and Penistone
made the other point that it is not just the workers; it is
people who have come into contact with them, normally wives, but even
other family members, too. This is about trying to find a scheme that
covers the significant number of people who have been
affected.
We have heard the figures and I think we agree about them: 2,000 a year, peaking only in about 14 or 15 years and then continuing. So a lot of families are affected, and sometimes more than one family member is affected. In some cases, the father or husband has died or become ill, and other family members are affected later. It is right that we should seek to address the issue.
I only ever had one major concern and, from conversations with the Minister and colleagues, I believe that it has been addressed. I was concerned that Parliament should not legislate retrospectively if that adversely affected the rights of anyone who had not agreed with the change. That is an important principle of law. It was therefore sensible that the courts stayed almost all the cases under consideration—the hon. Member for Barnsley, West and Penistone raised one case that might have slipped through the net—once they realised what the Government were doing. It is important that the legislation covers those cases that will be the subject of litigation in the future, but the Minister has been able to assure me and others that, because the insurers have agreed, retrospective change is not a problem. In recent years, the House has only once legislated to change the law retrospectively, on war crimes. It was controversial, but was regarded as so important that, after great difficulty in reaching agreement, Parliament decided to do that. It is an important principle that individuals and companies know what the law is, so we should not normally change it retrospectively. In this case, my understanding is that those whom the retrospective change will adversely affect have all signed up to it, because natural justice demands that people are not left suffering without a scheme to help them.
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