A cross-party committee of MPs has rebuked the government’s “maladroit” handling of a review which led to the legal fees increasing for people pursuing claims for the fatal asbestos-related cancer mesothelioma.
The justice committee said the government must reverse the reforms and carry out another consultation into its impact, over concerns the government “shoehorned” the issue into a wider consultation on changes to the claims process, most of which were not proceeded with.
The measures form part of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO). Sections 44 and 46 provide that successful parties in personal injury claims brought under conditional fee (or no win, no fee) agreements are no longer able to recover the success fee from the losing party. However, section 48 provided an exemption for mesothelioma claims until a review of the likely impact had been carried out.
In a written statement on 4 December 2013, the government announced it had decided to apply the LASPO provisions to mesothelioma cases with effect from July 2014, following a consultation that focused primarily on speeding up the claims process for mesothelioma cases.
The sufferers’ group the Asbestos Victims Support Group Forum mounted a judicial review of the consultation, claiming it did not meet the requirements of section 48. Just the day before the justice committee published its report, the presiding judge announced a reserved judgement.
As the LASPO proceeded through the House of Lords, the government was forced to make a number of concessions, including exempting mesothelioma sufferers from the blanket ban on success fee recovery until an assessment had been undertaken.
But the committee said the government rushed through the review prematurely because it “was not reconciled to the concession it was forced to make”. As a result, it was “not prepared in a thorough and even-handed manner”.
“We have concluded that the government’s approach has been unsatisfactory on a number of counts,” said the chair of the committee, Sir Alan Beith. “In its haste the government failed to ensure that relevant information, such as a cost-benefit analysis of the changes, was available to interested parties.”
The committee’s short inquiry brought to light controversial documents drawn up between insurers and the government. Victims’ groups said they amounted to a “secret deal” to reduce insurers’ costs once they had established the scheme to help mesothelioma victims who cannot trace an employers’ liability insurer claim compensation.
A heads of agreement document – a non-binding record outlining the main issues relevant to a tentative agreement – was sent to the committee by the Association of British Insurers (ABI), having been drawn up with the government in 2012.
While victims had not been made aware of the document prior to its release to the committee, the ABI and the government argued it did not constitute a binding contract and some proposals contained in it had not been implemented.
Beith added: “The provisions of this document, which remained undisclosed to other interested parties, have shaped the government’s approach to this issue, and we are concerned that the government appears to have had no intention of supplying us with this document as part of our inquiry.”
Doug Jewell, the Asbestos Victims Support Group Forum vice-chair, welcomed the committee’s report: “We said all along that the government review is a sham and is not the review that parliament, or claimants, expected. The government must now respect the wishes of parliament and satisfy the expectations of mesothelioma sufferers and their families that a fair review will be conducted.”
Commenting on the report, James Dalton, the ABI’s assistant director, head of motor and liability, said: “While insurers did not expose anyone to asbestos, the industry has always been open and transparent on its commitment to help as many mesothelioma claimants and their families as possible. We make no apologies for negotiating with government a scheme, paid for by insurers, that will compensate an extra 3,000 sufferers over the next ten years, who would otherwise go uncompensated.
“Significantly, this report raises the issue of high legal costs in mesothelioma claims, citing an average cost of £20,000 for every mesothelioma claim in England and Wales. Excessive legal costs mean higher insurance premiums for all employers, and clearly claimant lawyers have got some difficult questions to answer about why they do not support lower legal costs.”
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