The Government was questioned twice in as many days last week about whether pleural plaques will be considered a disease worthy of compensation, with Gordon Brown quizzed about progress on a decision during Prime Minister’s Questions yesterday (6 January).

It has been 27 months since pleural plaques victims were denied compensation by the House of Lords and the PM was asked what is being done to address the issue. Mr Brown said he was to meet with MPs following recent discussions with legal advisers.

On Tuesday, Justice Secretary Jack Straw described pleural plaques as a “difficult issue” which involves “potential expenditure by a number of departments” when asked during Justice Questions what advice he had given the Prime Minister. Why it should be difficult here but not in Scotland is not clear.

The Association of British Insurers, some of whose members do themselves charge solicitors fees for sending them cases, claim that the level of costs in personal injury claims is out of all proportion partly because the payment of referral fees is pushing up those costs. Referral fees are once again the whipping boy.

I have always understood referral fees can never be claimed back as a cost from the guilty party’s insurer or the client and are an expense which the solicitor must bear.

There is apparently a gap of between 25% and 35% between the hourly rates charged by a claimant and insurance companay solicitors in favour of the claimant solicitor. A major reason for this is that the insurers control the level of fees which can be charged by their solicitors.  I dont think any claimant would want their solicitors fees controlled by their insurance opponents!

In the days of legal aid in personal injury cases one was paid for one’s work as a claimant solicitor whether or not the claim succeeded. Those days are long gone and I find myself doing a very substantial amount of work for which I am never paid in cases which do not suceed but where clients are seeking advice entirly appropriately about prospects of success. In sharp contrast a solicitor acting for an insurance company can reasonably be expected to be paid for all the work he or she does.

In my view the insurance industry needs to acknowledge that it now bears the cost of failed cases as well as successful cases in that they are, through the success fees charged by solicitors in successful cases, being obliged through public policy to go some way towards meeting the cost of unsuccessful cases. Claimant solicitors charge more because the risk they face of not being paid is so much greater.  They should also acknowledge the benefit they recieve from claimant solicitors sifting out claims which are unlikely to succeed particularly in the context of occupational illness claims prior to any claim being made.

The defendant solicitors win on the swings because they can expect to be paid for all or most of their work, whereas claimant solicitors win on the roundabout because they get higher fees for those cases which are successful.  One cannot consider costs in isolation. 

In my view Insurers need to look closely at whether by being more active themselves in tackling claims, and also by improving the training of their staff they can cut out the inevitable costs created by delay and inefficiency in their offices.

It has been said the best form of disinfectant is sunlight.

It is good news that the BBC Money Box programme has recently run a piece on insurers’ practice of third party capture.

This involves the insurer of the guilty party making speedy (unrequested) contact with the injured victim of the accident, and trying to settle their claim as soon as possible and ideally, without having independent legal advice.

The Association of British Insurers seek to justify this by arguing that it avoids the injured person having to incur legal costs and going through the courts, which is of course in the insurers interest, although not by any means necessarily in the injured persons interest.

There clearly must be a conflict of interest for the insurer in seeking to assist both parties. Just as a solicitor’s primary duty is to his or her client, the insurers owe their duty to their shareholders

It must be right that the victim of the accident should be independently advised notwithstanding whether any offer of settlement is fair. This is a simple matter for natural justice.

It is to be hoped that the Financial Services Authority will look more closely at this practice which is apparently increasing and is intending to report its findings later in the year.

A recent house of Lords judgment confirmed an old legal maxim. 

Mr Gray was a passenger in the Ladbrook Road Train Crash in October 1999. Although not badly hurt physically he subsequently developed severe post traumatic stress disorder and depression.

In August 2001 he was involved in an altercation and, as a result of his psychological condition, he stabbed the other person to death.

Everyone agreed that he would probably never have acted in this way but for the psychological injury he suffered from as a result of the crash.. Therefore, it was argued that Mr Gray’s actions were a consequence of the negligence of Thames Trains.

He claimed for loss of earnings as part of his claim against Thames Trains. It included an element for future loss of earnings.

The Court of Appeal agreed this was fair.

Thames Trains appealed to the Law Lords who ruled that his claim for future loss of earnings failed because  of the legal maxim ex turpi causa which means that one cannot base a claim upon your own unlawful actions.

The Government has announced week that osteoarthritis of the knee in coal miners is to be added to the Industrial Injuries Disability Benefit Scheme. This means that any miner who worked underground for more than ten years prior to 1986 and has developed osteoarthritis will be entitled to claim the benefit. It will come into effect on 13 July 2009.

Four insurance companies, AXA, Norwich Union, Royal and Sun Alliance and Zurich asked the Scottish Court of Session to stop the Scottish Government bringing into force new laws which would reverse the House of Lords decision that pleural plaque is not a condition for which compensation can be recovered. This legislation has restored the right of individuals to claim from former employers and their insurers, compensation for asbestos related lung plaques.
There are ongoing legal proceedings by way of Judicial Review in Scotland in a further attempt by them to try and put an end to the new right to claim on the grounds the change in the law breaches their human right to a fair trial under Article 6 of the European Convention on Human Rights, contravenes their economic rights and is irrational in the face of the common law. They also argue that it will cost the taxpayer and employers too much.

Prior to the House of Lords decision in 2007 those suffering the physical insult and mental distress caused by asbestos plaque on their lungs had, in the view of the Courts, suffered recognisable harm often as a result of negligence by employers and had the right to modest compensation. It is a matter of opinion whether this is an injury or not but if there is it ought to result in compensation if that injury was caused by another’s negligence. It is difficult to see why taking a rational contrary view (which the Courts previously supported) can be considered irrational or in breach of human rights.

The case will be heard at the end of May.

In England and Wales, although a consultation paper in relation to whether the right to claim compensation for pleural plaque should be restored was published at the end of October 2008, still no response has been received from the Ministry of Justice. However, The Lord Chancellor has indicated that he hopes to publish a response at the end of July.

However, Andrew Dismore MP has taken the initiative in the House of Commons and introduced a Damages (asbestos - related conditions) Bill which was debated at the end of April. The Bill would overturn the House of Lords ruling. It is very heartening that The Bill was agreed by all MP’s who were present at the debate so that it can now go to the Committee Stage for detailed examination. However, The Bill could be stopped by the Government at a later stage. It still has a long way to go before becoming law.

It is good news that the Damages (Asbestos - Related Conditions) (Scotland) Bill made its way through the Scottish Parliament restoring the right of those suffering from asbestos related pleural plaque to pursue claims for compensation, assuming they have been negligently exposed to asbestos.

The Bill had strong support, being approved by a majority of 98 to 16.

It is hoped that the Act will receive Royal Assent at the beginning of April. Apparently there is a prospect that insurers may seek to challenge the right of the Scottish Assembly to pass this law and also argue that it breaches their human rights.

The consultation process is ongoing in England and Wales.

On the other hand, it is unfortunate that the Employer’s Liability Insurance Bureau Bill has been derailed. Opposition MPs objected to the Bill and its second reading was postponed until June.

The Bill is designed to introduce a fund to meet claims for compensation by injured workers where no financially viable employer exists and the relevant insurer cannot be traced.

It is to be hoped that this excellent Bill receives support in future.

Today is National Mesothelioma Day. It is important to remember that many sufferers of this fatal cancer and their families still go seriously undercompensated because their former employers have gone out of business so there are no assets to meet a claim for compensation and the insurer responsible to pay cannot be found.

The scheme for tracing the insurers who would be otherwise liable to pay, and get a windfall if they are not found, is only partially effective: injustice continues in spite of the government’s broadened scheme for making lump sum payments through the benefits system.

In this day and age when information is so easily collected and retained, it seems positively Dickensian that no central record of employer’s liability insurers is maintained and accessible by interested parties. The Department of Circumlocution springs to mind.

No one would tolerate this any longer in the case road traffic insurance and it is well past time a compulsory employer’s liability database was set up. 

A bill is already moving through the Scottish Parliament to restore the right of those suffering pleural plaque to compensation for this unpleasant and stressful injury.   The bill will also provide for compensation for symptomless asbestosis and asbestos related pleural thickening sufferers. 

This is excellant news for those affected in Scotland, but what about English and Welsh sufferers?

There is some hope because after a considerble amount of lobbying the government may have softened its approach and Gordon Brown has announced ” we are determined to take some action”.  A consultation paper is to be produced and it is to be hoped that there is some reasonably prompt action in favoure of claimants as many sufferers denied compensation by the recent House of Lords decision are in advancing years already.

Instead of strengthening a law which is there to protect injured workers the Government proposes to abolish a 1998 regulation requiring employers to hold onto their personal injury insurance details for 40 years.  The intention is to replace it with mere guidance.  This will only reduce the chance of finding an insurer to pay compensation.The government says that it’s pointless having the regulation as it’s impossible to police.  That may be true, but what is really needed is a change of approach.

Some injuries take many years to develop.  For example, mesothelioma, the fatal asbestos cancer, can take 40 years. 

As a lawyer advising people who have been injured by dangerous work practices, I regularly have to find insurers for companies that have gone out of business some years ago.

There is no source I can go to where I can be sure of an answer and drawing a blank is frustratingly common. So it’s a case of turning over what stones I can.

There are a limited number of places that one can look to try and find the right insurer (assuming one existed), including asking the Association of British Insurers which voluntarily circulates its members to see any of them has a record of cover. This may not easy for them to do because there have been mergers and old paper records may be patchy.   Apparently only in 28% of enquiries to the ABI did insurers come forward to confirm they had cover. 

Obviously where a company has gone bust or been dissolved so there are no assets, and subsequently an insurer cannot be found the claimant loses out on what might otherwise have been a strong claim for personal injury.

The flip side of this is that an anonymous insurer may well have saved the cost of paying compensation and thus received a windfall although not deliberately so.  The ABI response rate suggests this may be happening a good deal.

Perhaps it is too late to remedy past problems with record keeping.  What of the future?

Having a complete database of insurance for all vehicles on our roads works very well in road injury cases.  It means that information can be accessed immediately.  Why would that not work for employers liability records? Insurers could enter the details onto a central database where it could be retained for 40 years.  It might take some effort to set up but once going it ought to be fairly easy to maintain.