Who Gains from the Misfortune of Sufferers in the Debate on Mesothelioma Reform
[Check Against Delivery]
Today I’ve been asked to provide you with the insurance industry’s perspective on recent reforms. And in that context I want to examine with you who gains from the misfortune of sufferers in the on-going debate around mesothelioma reform.
Impact on sufferers
There are no winners with mesothelioma. As sufferers and their families know all too well, this is a dreadful disease with devastating consequences.
No wonder that so much political and judicial attention has been focused on how people so tragically affected might be better supported:
- by the introduction of new forms of State support;
- through specific legislation, including the Mesothelioma Act passed earlier this year; and
- by less onerous approaches to causation in Fairchild; and
- by liability and causation being determined swiftly by unique statutory instruments and common law – notably Barker and the subsequent Compensation Act 2006 and more recently the Supreme Court ruling in Sienkiewicz.
So given the changes to the regulatory and judicial landscape, the process for making a claim has improved. But it is still far from perfect and it is focussed on compensation rather than the speed with which that compensation can be provided.
Indeed, in a study undertaken by the Mick Knighton Foundation, respondents said:
“No amount of money would make the pain of losing my husband any easier to bear.”
“No amount of money is fair. My brother was only 54 years. It should not have happened.”
“any amount would have seemed trivial.”
“Nothing compensates for my husband.”
Mesothelioma victims and their families do not perceive themselves as having gained significantly from recent reforms. So who gains from the misfortune of victims?
Role of the insurance industry
It must be the insurers mustn’t it? Those big, nasty financial institutions sitting down there in the City of London trying not to pay out a penny to all those people they exposed to asbestos.
There are some people who like to spin it that way. But that insults the intelligence of many in this room and the memory of those who have died from mesothelioma.
Governments passed laws to encourage the use of asbestos.
Employers often unwittingly exposed their employees to asbestos.
Insurers wrote policies to cover the risks employers were taking on.
The point is twofold: insurers did not expose anyone to asbestos and no one knew enough about, nor understood the risks of, asbestos. Indeed, the EL Compulsory Insurance Act 1969 was introduced as a result of concerns about serious injuries following a factory fire - nothing to do with asbestos.
The effects of Britain’s industrial legacy will, tragically, be with us for many years to come.
Last year when I spoke at this event I said that, as an industry, we have paid a heavy reputational price for the way some insurers have handled the UK’s asbestos legacy. But it is important to recognise the strides the industry has made in terms of supporting sufferers. Insurers:
- currently pay over £77 million each year to mesothelioma suffers and their families;
- have voluntarily set up an industry wide database that has dramatically improved the tracing of historic EL policies. Overall search success rates now stand at 76%, compared to 46% prior to the introduction of ELTO; and
- are providing around £300 million over the next 10 year towards the new untraced occupational mesothelioma scheme.
So given the reputational and financial price the industry has to pay, it can’t be that insurers are gaining from the misfortune of sufferers. And I recognise that doesn’t fit into the nice, neat narrative some have about dying victims being the victims of faceless financial institutions.
In reality, the industry is sincere in our attempt to improve outcomes for mesothelioma sufferers.
Over many months we sat down with Government to agree a framework to provide support to those unable to trace an insurer against which to make a claim for compensation. I said last year - to some criticism - that although others had an interest in the outcomes of those discussions, that did not entitle them to a seat at the negotiating table. And I stand by that comment. The interests of claimants were abundantly clear and the package of measures needed to strike a balance which met the needs of both claimants and defendants but also ensured that the costs would not fall on today’s businesses.
The settlement we reached was set out in a Heads of Agreement document signed by the ABI and the Government.
I provided a copy of that Agreement to the Justice Select Committee earlier this year and the Agreement’s existence has been criticised in some quarters.
There's an irony to certain law firms complaining about the inappropriateness of agreements with Government. Remember it was the claimant lawyers who inspired and lobbied hard for the Scottish Government’s pleural plaques legislation so that they could make millions in legal fees North of the Border.
Role of claimant solicitors
So let’s think carefully about the role of claimant solicitors in this process.
I should say that I do believe that some claimant lawyers are genuinely and sincerely motivated by wanting to help mesothelioma claimants get access to justice.
But I have said it before and I will say it again: what is in the best interests of the claimant’s lawyer is not necessarily in the best interest of the claimant.
What better demonstration of this could there be than last week’s decision on the judicial review brought by the Asbestos Victims Support Group, described as a “win” for victims.
Lord Justice Jackson concluded that LASPO should apply to mesothelioma cases because, although a particularly tragic condition, there was no reason why, once it is in the civil legal system, that a claim should be treated any differently from any other case. It was last minute tinkering in Parliament that resulted in the carve-out that was the subject of last week’s court decision.
The Government – supported by the ABI – lost and will need to consider their next steps. But how can it possibly be described as a win for victims when a charity uses its limited funds to go to court to get a result which:
- prevents mesothelioma victims from getting 10% more in their general damages;
- allows claimant solicitors to continue to charge exorbitant success fees; and
- fails to put a cap on claimant solicitors fees.
So let’s think about who benefits from the inefficiency of the current claims process.
Insurers? Nope - the longer a claim takes, the more it costs. Which is why we have been arguing in favour of civil litigation reform that will improve the process for victims and reduce costs overall.
Insurers have argued for a pre-action protocol to reduce the time taken for mesothelioma claims to settle. Opposed by claimant lawyers.
Insurers have argued for a secure electronic claims gateway to streamline the transfer of documentation. Opposed by claimant lawyers.
And insurers have argued for the introduction of fixed fees for mesothelioma claims. Opposed by claimant lawyers.
So let’s be really clear about who gains from a failure to introduce a more efficient and effective claims system.
It’s not insurers and it certainly isn’t mesothelioma victims.
The only people to gain are the claimant law firms who continue to pocket millions and millions and millions of pounds in fees whilst their clients get proportionately less compensation than in any other disease of injury claim.
So let’s stop the self-righteous rhetoric from lawyers about putting the interests of victims first.
Lets have a bit of transparency about how much more money the lawyers make from a system that remains inefficient and ineffective than one that is reformed and updated.
And let’s have a bit of honesty. For claimant lawyers, these cases are about:
- profit, not protection
- cash, not care
- fees, not fairness.
So it is really disappointing that the Shadow Justice Minister assured claimant lawyers the other week that “we are on your side”.
And its also disappointing to hear the double standards of politicians on the issue of funding mesothelioma research. Insurers have provided £3.25 million in funding in order to support research into possible cures for this devastating disease. Politicians are happy to call on insurers to provide more funding. Yet when it comes to asking claimant lawyers – the people who are making millions from these cases - to make any form of contribution at all, the calls go silent.
Conclusion
So in conclusion, we’ve had the Mesothelioma Act, we’ve had proposals for reform of the civil litigation system and we’ve have the judicial reviews. What has all that resulted in?
Those mesothelioma claimants who are able to trace an insurer make a claim in a system that is too slow and too inefficient to serve their interests well. And they receive 10% less in damages that any other personal injury claimant.
As an industry, insurers carry heavy reserves to meet their claims obligations and are committed to continuing to pay claims as quickly as possible. The CEOs and Claims Directors of insurers that I regularly engage with are absolutely committed to helping the victims of this terrible disease. Like them, I genuinely believe that it should not be beyond anyone involved in this debate to continue to try to find a way forward that ensures victims get the compensation to which they are entitled. And that, in making their claim, those victims get the support they need from a lawyer who is motivated to get the best outcome for their client at a proportionate, rather than at an excessive, cost.
At the moment, the claimant lawyers continue to profit from mesothelioma claims.
So I’m pretty clear who is gaining from the misfortune of sufferers.
Are you?