New Compensation Scheme for Untraced Insurance but 50% Asbestos Victims Excluded
Lord Freud, Minister DWP, has announced a tariff scheme to pay compensation in cases where employers’ liability insurance cannot be traced. The scheme is limited to claimants suffering from the asbestos cancer, Mesothelioma. Claimants suffering from Asbestosis, Pleural Thickening and Asbestos-related Lung Cancer, which constitute 50% of all asbestos diseases, are excluded from the scheme.
The scheme takes effect for any mesothelioma sufferer diagnosed from today – excluding all those diagnosed prior to today – but no payments will be made for approximately two years because primary legislation is required.
Lord Freud is responding to a Labour Government consultation which closed in May 2010 which gave options to resolve the long-standing problem of tracing employers’ liability insurance in personal injury claims where negligent employers are no longer trading. The FSA have described the long-standing problem as: ‘…a situation where insurers/other policyholders are inappropriately subsidised by claimants that are unable to trace the relevant insurance company and/or are not aware of the existence of a potential coverage.’ *
The main option in the consultation which attracted comments from all sides was for an insurance fund of last resort, an Employer Insurance Bureau (ELIB), similar to the Motor Insurers Bureau (MIB), which would fully satisfy any successful claim for compensation where the EL insurer could not be traced by paying full compensation.
Not one respondent to the consultation supported the other options for a tariff scheme of fixed payments and for limiting payment to mesothelioma claimants: all of the responses were either for an ELIB (claimants) or against an ELIB (insurers). An impact assessment was provided for an ELIB but not for a tariff scheme.
Asbestos victims groups are bitterly disappointed at the exclusion of 50% of asbestos victims from the scheme. Tony Whitston, Chair of the Asbestos Victims Support Groups Forum says, “We must welcome this first movement on untraced insurance which provides compensation for mesothelioma sufferers, but we are disappointed at the reduced amounts payable, and we are bitterly disappointed at the exclusion of so many people who suffer from diseases such as asbestosis or lung cancer caused by exposure to asbestos.
“Asbestosis is a chronic, progressive lung condition, in many cases causing severe breathlessness and fatigue on the least exertion, limiting a sufferers’ opportunity to live an active life and which shortens life-expectancy. Asbestos-related lung cancer is not unlike mesothelioma and invariably leads to an early death. There is no justification for excluding such people from the scheme. The MIB scheme for injured motor accident victims doesn’t discriminate according to the type of injury, paying only those who are fatally injured. Nor does the MIB limit payments according to a tariff. Why should asbestos victims receive less protection than motor accident victims. We have waited two years for this response and it is not good enough.”
The cost of including all asbestos victims would only amount to about 18% of the total cost. This is because non-mesothelioma claimants must trace the insurers of all negligent employers, and some manage to find some insurers to pay a part of their compensation, and also because compensation is much lower for non-mesothelioma claims such as asbestosis.
Tony Whitston goes on to say, “The cost of including all asbestos victims is not prohibitively expensive: it would cost less than 20% more to provide cover for all asbestos victims. There is no financial justification for excluding so many people and there is certainly no fairness and justice in doing so. Had the scheme applied to all asbestos victim we would have welcomed it as a significant move forward, despite reduced compensation, which is a huge advantage to insurers. As things stand, claimants continue to subsidise rich and powerful insurers who have ready access to ministers to ensure that their liabilities are limited and they get the best outcome possible. Insurers must be forced to face their liabilities: the bargain they have driven has been too hard: too many people lose out. We are urging Lord Freud to make the scheme available to all asbestos victims.”
Frank Hill who suffers from asbestosis says, “I worked all my life as a heating engineer constantly exposed to asbestos and I now suffer from asbestosis which has seriously affected my breathing. I could only trace the insurers for part of my employment so I have only received part of the compensation due to me. There are many like me with scarred lungs, some with worse conditions and some better. I cannot understand why some should receive a payment and some not, we all suffer because we worked with asbestos, we should all be treated the same.”