I am publishing today a consultation document on proposals to improve the tracing of employers’ liability insurance policies, and establish a fund of last resort to make payments in cases where employers are insolvent and insurers cannot be traced.
Today, Britain is rightly recognised as having one of the best health and safety records in the world. This was not always the case though and good health and safety has not always been a priority for business. A key step for employees was therefore the introduction of the Employers’ Liability (Compulsory Insurance) Act 1969. This landmark legislation has helped to ensure that the vast majority of those who are injured or made ill as a result of employment, are able to receive appropriate compensation.
We know, however, that in some cases—particularly cases where a disease develops many years after exposure—it can be very difficult to identify the relevant insurer. This includes some of the most serious industrial diseases, such as pneumoconiosis, caused by exposure to coal dust, and asbestos-related cancers.
In 1999 we launched, in conjunction with the insurance industry, a voluntary code of practice to help trace these policies where other routes had failed. The code has led to some improvements but too many people still are not able to secure the compensation they deserve. This is not acceptable and we believe that more must be done. The consultation document sets out two further measures to improve this situation.
We believe that an essential first step is the creation of an employers’ liability tracing office, to manage an electronic database of EL policies and to operate the tracing service. We will be seeking to work with the Association of British Insurers and others to drive this forward, informed by the outcome of the consultation. We envisage that the database, initially, will be voluntary, but become mandatory in time, to ensure that all insurers publish the relevant policy details. We expect the Financial Services Authority to consult shortly on ways to make the provision of policy information mandatory.
A tracing office will have to be populated initially with existing trace data, but new and renewed policies will be included shortly afterwards. One of the issues explored in the consultation is the extent to which historic insurance records can be added to the database.
While a tracing office will ensure that, in future, more people can obtain civil damages for industrial disease, we also know from experience that it still may be very difficult to trace historic policies, especially for those individuals suffering from long-tail diseases such as mesothelioma. Therefore, we propose also to establish an employers’ liability insurance bureau, which will provide a fund of last resort in cases where all other efforts to trace an employer or insurer have failed. This will, for example, give peace of mind to many workers who know that they were exposed to asbestos but who do not now have symptoms. They will have confidence, that if they later develop an asbestos-related disease, they will be able to claim the civil compensation to which they are entitled.
The consultation launched today will examine what the bureau should cover; the impact on insurers and employers; how much should be paid by way of compensation; and limitations on claiming from the bureau. The Government will consider fully the responses to the consultation before determining next steps towards the bureau’s introduction.
We believe that the changes we are proposing will make a real difference to the lives of people who suffer from these terrible work-related diseases, and to their families.
The consultation will run from 12 weeks from today, in line with the Government code of practice on consultation.
The consultation document is available on DWP’s website at:
Copies will be placed in the Vote Office and deposited in the House Library.