My Lords, I beg to move that the Commons amendments be now considered.
Moved accordingly, and, on Question, Motion agreed to.
[The page and line references are to Bill 155 as first printed for the Commons.]
1: After Clause 2, insert the following new clause- “Mesothelioma: damages
(1) This section applies where-
(a) a person (“the responsible person”) has negligently or in breach of statutory duty caused or permitted another person (“the victim”) to be exposed to asbestos,(b) the victim has contracted mesothelioma as a result of exposure to asbestos,(c) because of the nature of mesothelioma and the state of medical science, it is not possible to determine with certainty whether it was the exposure mentioned in paragraph (a) or another exposure which caused the victim to become ill, and(d) the responsible person is liable in tort, by virtue of the exposure mentioned in paragraph (a), in connection with damage caused to the victim by the disease (whether by reason of having materially increased a risk or for any other reason).(2) The responsible person shall be liable-
(a) in respect of the whole of the damage caused to the victim by the disease (irrespective of whether the victim was also exposed to asbestos-(i) other than by the responsible person, whether or not in circumstances in which another person has liability in tort, or (ii) by the responsible person in circumstances in which he has no liability in tort), and(b) jointly and severally with any other responsible person.(3) Subsection (2) does not prevent-
(a) one responsible person from claiming a contribution from another, or(b) a finding of contributory negligence.(4) In determining the extent of contributions of different responsible persons in accordance with subsection (3)(a), a court shall have regard to the relative lengths of the periods of exposure for which each was responsible; but this subsection shall not apply-
(a) if or to the extent that responsible persons agree to apportion responsibility amongst themselves on some other basis, or(b) if or to the extent that the court thinks that another basis for determining contributions is more appropriate in the circumstances of a particular case.(5) In subsection (1) the reference to causing or permitting a person to be exposed to asbestos includes a reference to failing to protect a person from exposure to asbestos.
(6) In the application of this section to Scotland-
(a) a reference to tort shall be taken as a reference to delict, and(b) a reference to a court shall be taken to include a reference to a jury.(7) The Treasury may make regulations about the provision of compensation to a responsible person where-
(a) he claims, or would claim, a contribution from another responsible person in accordance with subsection (3)(a), but(b) he is unable or likely to be unable to obtain the contribution, because an insurer of the other responsible person is unable or likely to be unable to satisfy the claim for a contribution.(8) The regulations may, in particular-
(a) replicate or apply (with or without modification) a provision of the Financial Services Compensation Scheme;(b) replicate or apply (with or without modification) a transitional compensation provision;(c) provide for a specified person to assess and pay compensation;(d) provide for expenses incurred (including the payment of compensation) to be met out of levies collected in accordance with section 213(3)(b) of the Financial Services and Markets Act 2000 (c. 8) (the Financial Services Compensation Scheme);(e) modify the effect of a transitional compensation provision;(f) enable the Financial Services Authority to amend the Financial Services Compensation Scheme;(g) modify the Financial Services and Markets Act 2000 in its application to an amendment pursuant to paragraph (f);(h) make, or require the making of, provision for the making of a claim by a responsible person for compensation whether or not he has already satisfied claims in tort against him;(i) make, or require the making of, provision which has effect in relation to claims for contributions made on or after the date on which this Act is passed.(9) Provision made by virtue of subsection (8)(a) shall cease to have effect when the Financial Services Compensation Scheme is amended by the Financial Services Authority by virtue of subsection (8)(f).
(10) In subsections (7) and (8)-
(a) a reference to a responsible person includes a reference to an insurer of a responsible person, and(b) “transitional compensation provision” means a provision of an enactment which is made under the Financial Services and Markets Act 2000 and-(i) preserves the effect of the Policyholders Protection Act 1975 (c. 75), or(ii) applies the Financial Services Compensation Scheme in relation to matters arising before its establishment. (11) Regulations under subsection (7)-
(a) may include consequential or incidental provision,(b) may make provision which has effect generally or only in relation to specified cases or circumstances,(c) may make different provision for different cases or circumstances,(d) shall be made by statutory instrument, and(e) may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.”
My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 1. In speaking to Amendment No. 1, I shall speak also to Amendments Nos. 6, 7, 8 and 10. This group of amendments will make a real difference to sufferers from mesothelioma and their families who have been or would have been affected by the recent House of Lords’ judgment in the case of Barker v Corus, and conjoined cases.
As noble Lords who have been following these issues will know, the case of Fairchild fundamentally changed some of the principles of liability, but did not resolve whether liability should be joint and several. It was important to clarify that. The practical effects that became apparent as a result of the House of Lords’ judgment have made this legislation necessary.
In practice, the claimant would have to trace all relevant defendants so far as possible before liability could be apportioned and full compensation paid, or alternatively to issue multiple claims to recover damages on a piecemeal basis. That would cause delays in resolving claims and increase difficulties for claimants when, as I am sure noble Lords will appreciate, they and their families are already suffering considerable pain and stress.
The Government have therefore acted quickly to address these problems. I am, as always, grateful to the noble Lord, Lord Goodhart, who in discussing these issues met my noble and learned friend the Lord Chancellor. I am very grateful to the team of the noble Lord, Lord Hunt, who have been extremely helpful in discussing these issues with us over the past few weeks and to the ABI, APIL and the TUC for their helpful and constructive input into these amendments.
By providing for joint and several liability, Amendment No. 1 will enable the claimant to recover full compensation from any responsible person. It will also apply to claims made by the claimant’s estate or dependants where he has not made or resolved a claim prior to his death.
The provision will apply regardless of where the exposure has taken place. I am aware of views that this may extend the principle contained in Fairchild. That is not the case. Although the case of Fairchild related to a workplace exposure, the principle contained in the House of Lords’ judgment was not restricted to these cases. To restrict this provision to workplace exposure would mean that some claimants affected by the Barker judgment would be left in exactly the same difficulties that they are now suffering, and that different claimants would be treated in different ways purely because of where the exposure occurred. I hope noble Lords will agree that that cannot be right.
It also ensures that where a claimant has worked for a single employer who is now insolvent, but where only part of the period of exposure is covered by insurance, the claimant will be able to recover compensation from that insurer on the same basis as they could before the Barker case.
Subsection (3) makes clear that this provision does not affect the existing law on contributory negligence. Where a claimant is responsible for part of the negligent exposure, it is right that that should be reflected in the level of compensation that he is awarded when liability is determined. But the provision will apply where, for example, a self-employed person has been negligently exposed by another while working as a contractor. Subsection (3) also makes clear that a person who has paid full compensation can then seek a contribution to the damages awarded from other responsible persons under the Civil Liability (Contribution) Act 1978. We think it is right to make it as easy as possible for defendants and insurers to recover contributions. Subsection (4) will ensure that defendants and insurers are able to recover contributions in as straightforward a way as possible.
It is also important that the lawyers acting for claimants ensure that defendants are provided with a full employment and exposure history. We are looking at whether amendments to secondary legislation will help to achieve this.
Subsections (7) to (11) confer a power on Her Majesty’s Treasury to make regulations about the provision of compensation to a responsible person or an insurer of a responsible person in specified circumstances. These provisions are essential in helping to avoid delay in paying compensation and will allow the current practice to continue of employers or insurers making parallel payments with the financial services compensation scheme. As well as speeding up the claims process, that will also produce a fair outcome for insurers.
The subsections confer a power for Her Majesty's Treasury to make provisions that would facilitate the speeding up of payment of claims to mesothelioma victims. Those provisions would then enable responsible persons to claim money back from the financial services compensation scheme when another responsible person and their insurer are both insolvent and therefore unable to pay their share of compensation payments. The power includes the ability to deal with situations arising prior to the establishment of the financial services compensation scheme that were settled under the Policyholders Protection Act 1975.
The provisions would come into effect only once the Treasury has laid the necessary regulations and the FSA has made the relevant rules. However, the power provides that rules could permit the liable party to claim contributions in respect of claims dealt with from the date of Royal Assent.
The Treasury will make regulations to be laid as soon as practicable in the autumn, once Parliament reconvenes. The FSA is considering what changes may be needed to the financial services compensation scheme to facilitate swifter settlement of mesothelioma claims in accordance with the aims of the amendments to the Bill. The FSA proposes to take forward any changes as a matter of priority.
It is of the utmost importance that all claimants affected by the Barker judgment are able to secure full compensation, including the parties to that case and the cases conjoined with it, and any whose caseshave subsequently been settled or determined onthe apportionment basis proposed by Barker. Amendment No. 7 provides for that.
This is an exceptional step, but we believe that it is justified in the exceptional circumstances that apply here. It would be unacceptable to provide assistance to future claimants but to leave a small group of claimants whose claims are unresolved or have been concluded on the basis of Barker to suffer the real disadvantages arising from that judgment. I believe that that does not raise difficulties in relation to compliance with the European Convention on Human Rights, for a number of reasons.
During debates in another place, Mr Simon Hughes said that it was his understanding that those whom the retrospective change will adversely affect have all, effectively, signed up to it. That appears to be the result of a misunderstanding. I make it absolutely clear that the Government have not approached the parties to individual cases regarding the provision. We have involved the key stakeholders in developing the new clause to ensure that it works.
First, the degree of retrospection is strictly limited and will apply only to a very short period and very few cases. We understand that, following the Barker judgment, the great majority of cases that were under way have been stayed, either pending clarification of the appropriate method of apportionment or in the light of the Government’s announced intention to introduce the amendments. So very few cases may need to be reopened.
In addition, those cases—and any that are currently unconcluded—will have been commenced prior to Barker, so the expectation of both claimants and defendants will have been that joint and several liability would apply. We are therefore not interfering with the settled expectations of the parties to any of those proceedings.
The Scottish Parliament recently passed a legislative consent Motion to enable the provisions to apply directly to Scotland. Colleagues in Northern Ireland have also signalled their wish for the provisions to apply there. Amendment No. 8 therefore ensures that these provisions will apply across the United Kingdom. Finally, to ensure that claimants receive the benefit of the provisions as soon as possible, Amendment No. 6 provides for them to come into effect, together with the provisions in Part 1, on Royal Assent, and Amendment No. 10 makes the necessary consequential changes to the Title.
I must make it clear that the amendments are just part of what the Government are doing. Together with colleagues in the Department for Work and Pensions, we are working with the Association of British Insurers, the Association of Personal Injury Lawyers and the Trades Union Congress urgently to identify ways of speeding up the settlement of these claims. The Secretary of State for Work and Pensions has already announced that he will be issuing a Written Statement in another place and in your Lordships' House about that work before the Recess. I can tell the House that it will be issued tomorrow.
Moved, That the House do agree with the Commons in their Amendment No. 1.—(Baroness Ashton of Upholland.)
1A: Line 19, after “disease” insert “for all or any part of the period of exposure”
The noble Lord said: My Lords, I declare my interests as set out in the register, in particular as a solicitor and partner in Beachcroft LLP and as president of the All-Party Group on Occupational Safety and Health. All of us in that group are only too well aware of the dreadful mortal implications of mesothelioma. Our priority must be to improve the lot of people who are suffering from one of the most appalling conditions known to medical science. Each year, some 1,800 people are diagnosed with mesothelioma and, as matters stand, that is purely and simply a death sentence. Typically, a sufferer has at most 18 months to live and, within that short span, can expect a catastrophic decline in their quality of life. The number of sufferers is set to rise. The best estimate is that it will peak around 2020 and possibly slightly later.
No one can be satisfied with the manner in which the compensation system for mesothelioma cases currently operates. In a minority of instances, liability is quickly established and a payment is made by a present or former employer or their insurer. However, in many hundreds of cases each year, there is no solvent former employer or insurer, or liability simply cannot be established, so many hundreds of sufferers receive no compensation at all. That is intolerable. What is ideally required is a comprehensive, clear and sustainable system that delivers some form of compensation or benefit quickly after diagnosis and without unnecessary recourse to the courts. This is surely a question of justice and human decency.
However, we on these Benches in no way seek to oppose the Government’s efforts to regularise the position on mesothelioma claims, even if the provisions deal with only one aspect of the subject. I congratulate the Minister and her team on their hard work on the new clause, and on doing their best to consult stakeholders widely, despite the very tight timescale and what must have been more or less intolerable pressure from elsewhere in Government. However, we should not delude ourselves; the Government’s new clauses may be a necessary part of an overall settlement, but they will not, and cannot, deliver the reforms that are needed. This is no more or less than a first step, but it will also have some consequences, which is causing serious concern.
One might quietly reflect for a moment, after this aspect of the matter is resolved for now, that the courts were directed to this point by the Government. It is also unfortunate that, having played a leading role in initiating the appeal process that led to the decision of this House in an appellate capacity, the Government have now sought to reverse the judgment in the three test cases, as the Minister has just acknowledged, without consulting some of those who are most affected. Many parliamentarians seemed to be under the impression that the insurers and employers involved in mesothelioma cases had willingly signed up to the Government’s new policy when they had not. I very much welcome the way in which the Minister has put the record straight.
Speed is of the essence, but this lack of full consultation and consensus is about more than just courtesy; it is about ensuring that the system works. It is vital that the new clause should operate for the benefit of all those involved in cases relating to this extremely unpleasant disease. Of course, claimants must be able to recover full damages to which they are entitled quickly and without undue complication. It is only fair, however, that those who pay such claims should have the opportunity to resolve sometimes difficult and complicated apportionment issues between themselves as economically and speedily as possible. I therefore particularly welcome the way in which the proposals prefer a simple “time on risk” approach between defendants, avoiding the need for extensive inquiries into and expert evidence on the effects of different types of asbestos and varying degrees of exposure. Such inquiries would be equally unwelcome for claimants, who would often have to be the main, perhaps the only, source of information, and it must be right that this sort of intrusion and unnecessary wasting of time should be avoided wherever possible.
I also welcome the approach of the Minister to the difficulties caused by the current rules of the financial services compensation scheme. Although it has not been possible to settle those matters finally within the Bill itself, we recognise the amount of work that has already been done by the department, the Treasury and the FSA in getting this far. I welcome the Minister’s commitment to resolving these matters and I hope that she will be able to reassure me that her department will work closely with the Civil Procedure Rule Committee on this.
However, I should like to highlight a couple of points that in my view remain to be resolved. First, it is essential to the operation of this clause as between defendants that the claimant should provide as full an employment history as possible at a very early stage. The occupational disease protocol already flags the need for this. Moreover, it is generally recognised and acknowledged that insurers and other defendant interests have approached the drafting of this important amendment in a positive and constructive fashion. In fairness to them, their acceptance of the amendment must be on the basis that those representing claimants also abide by the spirit of compromise and provide the necessary information without difficulty. Secondly, while subsection (4) goes a long way to applying a presumption in favour of “time on risk” as the appropriate method of apportionment, this will need to be underpinned by procedural rules to make it workable.
We should also reflect on the broader significance of this amendment. Not only have the Government acted to reverse what they believe to be the injustice of the decision of this House in its appellate capacity on Barker v Corus, but they have also been encouraged by the engagement of stakeholders to widen the scope of the clause so that it sets the scene for simplifying claims for mesothelioma in general. I know that the Secretary of State for Work and Pensions and his department continue to work with the Minister and with claimant defendant and insurer interests on ways of speeding up and simplifying the process, and we look forward to the Statement which the Minister has told us will be made tomorrow.
Much progress has been made, but like all too many injury claims, those for mesothelioma are too complex and transactional costs are too high. For satisfactory progress to continue, everyone involved must be prepared to compromise and even to act against their own short-term interests from time to time for the greater good. I would also urge the Minister to look at one remaining gap which I consider has not yet been closed, and hence Amendment No. 1A. Under Barker and current case law, a claimant whose single former employer is now insolvent and who can trace only part of that employer’s insurance cover runs a substantial risk of seeing his damages reduced. While subsection (2) covers other gaps created by the Barker decision, it arguably does not address this particular area. If the Minister is confident that the courts will deal with this in the time-honoured fashion, it would be helpful if she were able to confirm that today.
I do, however, have very great concerns about retrospective application, and I believe that those concerns are shared by many others in the House. Since the judgment of this House, I understand that most mesothelioma cases have been deferred and relatively few have settled as courts have awaited the Government’s response to the judgment. Nonetheless, I cannot recall ever a previous situation in which Parliament has been asked to enact legislation that would go so far as to overturn existing decisions of the courts in individual cases or reopen agreements reached between legally represented parties. Only yesterday there was a debate on this very point on the Government of Wales Bill in another place. If it is the will of the Crown in Parliament to impose retrospection, of course it has the power to do so. Yet all the foundations of our civil society, our legal and constitutional life, the Human Rights Act, centuries of accumulated statute and common law, basic principles of fairness and the very concept of the rule of law itself all resonate with grave doubts about any such move.
As my colleague Dominic Grieve said in another place only last night:
“It is not common practice for the House to pass measures that can apply retrospectively. Retrospective powers enable the Government to interfere with private rights in a way that is contrary to the principles of the rule of law in this country”.—[Official Report, Commons, 18/7/06; col. 219.]
We must be cautious, ensuring that any such provision is tightly defined, will not be the subject of unjustified or unnecessary attempts to widen its scope and does not set a precedent.
I was reassured by the words of Bridget Prentice in another place on Monday when she described the application of retrospection in this instance as,
“an exceptional step … given the exceptional circumstances”.—[Official Report, Commons, 17/7/06; col. 47.]
The Minister has used similar language. I want it to be unique—a one-off. I hope she will be able to confirm that it will be.
Turning to further points of detail, I fear the current amendment to Clause 15 is not clear enough to prevent those who have settled their claims in full, without a discount for Barker, from believing that here is an opportunity to reopen those claims and seek more damages. The modest amendments I propose—Amendments Nos. 7A, 7B and 7C—would make the position absolutely clear. If the Minister is not prepared to accept those amendments, I invite her to make it abundantly clear in a Statement to this House, and perhaps also in writing, that these provisions will be available only in those cases where it is clear that the claimant has been directly and negatively affected by the decision in Barker v Corus. Bearing in mind that we are dealing with an amendment to a Bill designed to curb the excesses of claims management companies, it would be ironic and intolerable if this clause were to have the unintended effect of rekindling the kind of speculative claims that we have seen all too often in other areas in the past.
In closing, I have to say—in sorrow, not anger—that these past few days have not seen the parliamentary process in its best light. A judicial decision of the House’s Appellate Committee was made in May; an amendment to overturn it first appeared on the Order Paper last Friday; it was then debated and adopted in another place on Monday; just two days later, here we are debating it in the expectation that it will receive Royal Assent in a matter of days. I fully accept the urgency of this matter—this disease will not indulge us in our deliberations and every day more people are struck down—but it might have been better for the Government to have spent the summer preparing a comprehensive Bill to overhaul the system in a holistic, coherent fashion rather than unbalancing the Bill in this way.
I believe that we all have a responsibility to ensure that the somewhat tarnished reputation of our political life is rehabilitated and restored. Until this point, I have had nothing but praise for the manner in which the noble Baroness and her ministerial and departmental colleagues had conducted themselves; they consulted widely and consistently demonstrated courtesy, patience and a willingness both to listen and to be swayed by argument. In recent days and weeks, I fear, they have been somewhat swept away on a tide of party-political considerations and pressures from elsewhere within Government and from the Back Benches in another place. There has been a great deal of emotion—I understand that. I only wish I could be certain that these amendments would enhance the chances of a full and fair settlement but, hand on heart, I cannot say that I am. We are legislating in haste. Let us hope that we do not repent at leisure. I beg to move.
My Lords, I am pleased to see the noble and learned Lord, Lord Hoffmann, in his place. He delivered the lead speech in your Lordships' House in the decision in Barker v Corus and if he chose to intervene in the debate, I would be interested to hear what he had to say. He shakes his head.
It would be incorrect to say that the decision in Barker v Corus was wrong. In a sense, no decision of the Appellate Committee of your Lordships' House can be wrong; its members declare the law, and the law, as declared by them, is the law. I have read the decision in Barker v Corus—I understand and agree with the logical process by which it was arrived at, by a majority of, I think, four to one—but, nevertheless, it does not follow that because a decision is correct it should be followed unquestioningly. It is the role of the members of the Appellate Committee to declare what the law is, not what it ought to be. I agree that the decision in Barker v Corus would undoubtedly cause severe hardship to a number of people with what seem to me to be legitimate claims to compensation. Therefore, we on these Benches very much welcome the amendments. They would mean that people who get this dreadful disease will receive full compensation, except to the extent to which their own contributory negligence is a possible cause.
When I first saw what was proposed, I was seriously worried by the retrospective effect of the legislation. I was entirely happy that the Bill should apply to cases where the cause of action had not yet arisen, but I was doubtful about its application to cases still in progress or where the cause of action had arisen but action had not yet been commenced.
I agree with the noble Lord, Lord Hunt, about retrospective legislation. The problem is that a retrospective overruling by Parliament of the decisions of the courts is, in principle, a breach of the rule of law. That is particularly so where the case is a decision on rights between private individuals or companies. Observing the rule of law in this way is of special importance in a country where respect for the rule of law has persuaded many foreign businesses to use our courts to settle their legal disputes, to our great financial advantage.
I have, however, been persuaded that retrospectivity is acceptable here by the wholly exceptional circumstances of this case. First, there is the unusual nature of the disease; it is caused not by an accumulation of exposure, such as silicosis, which is contracted by miners, or lung cancer, which is caused by smoking, but may be caused by the inhalation of even a single fibre of asbestos. Secondly, another exceptional circumstance is that since the Fairchild decision, it appears that most employers and insurers have acted on the assumption that liability would be joint and several, and not several alone. Thirdly, and perhaps most important, I rely on the fact that those most seriously affected by the decision in Barker v Corus are willing to accept this as a special case. I say “accept”—they do not welcome it but are prepared to accept it. Like us, they object to retrospective legislation in principle and do not wish this case to be treated as a precedent. I also note that Corus was not consulted and has objected to the retrospective element in this legislation. We therefore support the amendments, but I would welcome recognition by the noble Baroness—she expressed it at least in part in opening the debate—that this is an entirely exceptional case and not to be taken as a precedent for the future retrospective overruling of court decisions.
There are some points of more detail. In the House of Commons, my honourable friend David Howarth raised a question of whether it could be argued that the drafting of the Bill left a possibility that damages could not be awarded at all in some cases. In the House of Commons, the Minister said that she would see whether the provision could be improved. Nothing has been done on this, which is presumably on the basis of legal advice. Was advice given that an amendment was not necessary, as suggested byMr Howarth? In case there is any remaining uncertainty, will the Minister assure us that claimants are not excluded from compensation on the grounds in any circumstances that they are guilty of contributory negligence?
It seems, regrettably, that there is no possible way of providing compensation where all the claimants, employers and their insurers are either insolvent or have gone into solvent liquidation and have been wound up. In such cases, there is no defendant against whom proceedings can be brought. Will the Minister confirm that nothing in this Bill succeeds in giving compensation where there is no available defendant against whom proceedings can be commenced?
It appears that compensation can be paid out of the financial services compensation scheme only if it is the insurer who is unable to pay. Does that mean that a defendant cannot claim against the scheme if another liable employer with the same victim has ceased to exist and was uninsured? What will happen if, as was the case with Barker, the victim was employed long ago and it cannot be ascertained whether the employer was insured? Is there any possibility in such a case of Corus being entitled to claim compensation from the scheme?
I am concerned by the costs incurred on both sides in the Barker v Corus appeal to your Lordships' House. No order has yet been made and it is not clear who will be ordered to pay them. However, the decision of the Appellate Committee has been rendered largely irrelevant by this Bill and costs incurred by both sides have been to a very considerable extent wasted. Since the purpose of the Bill is specifically to overrule the decision in Barkerv Corus, would it not be appropriate for the Government to make a contribution towards the costs of either side, which have been rendered irrelevant by the Government’s action? There seems to be a moral obligation to do so.
Subject to those points, I have no other comments on the amendments in this group. I welcome the hope and expectation that they will very shortly become law.
My Lords, perhaps I may enter the debate as an ex-shipyard worker rather than a solicitor or someone from the legal profession. I assure the House that the Barker decision caused a great deal of concern in the area in which I live. I agreed with most of what the noble Lord, Lord Hunt of Wirral, said but, on retrospection, would he have a look at the Employment Act 1982, which his Government introduced, and see that there was a certain amount of retrospection then?
I worked in the shipbuilding industry from the time I left school at 14 until I became a Member of Parliament in 1979. During that time, the longest period of employment that I had was the five years that I served as an apprentice. In the shipbuilding industry, you were lucky if you had one employer for a month. People used to be taken on for weeks or days. So, when they get this terrible disease of asbestosis, to ask them to remember every employer that they had is impossible. I could not remember every employer that I had during my time in the shipbuilding industry.
As for the safety conditions that they worked in, there might be 100 men working in the hold and someone spraying asbestos, and the only safety provision was that the person spraying the asbestos would have a little Martindale mask, which was a bit of cotton wool with a bit of foil over it and an elastic band around the back of the head. Those were the conditions that these men worked under. I appreciate the legal jargon and I appreciate that we have got to get things right, but I welcome the Government’s amendment and I congratulate my noble friend and my honourable friend Bridget Prentice in the other place.
The decision was made quickly because of the problems of these families of shipbuilding workers. Those families do not have a great deal of money and do not have pensions. From the 35 years that I spent in the shipbuilding industry I did not have a brass farthing in pension. Pensions were introduced only after the shipyards were nationalised. These are the sort of people that we are talking about. I know that legal jargon says this and that, but these are human beings who went through life in terrible conditions and whose families have no money—so when the Barker decision was made, it caused a great deal of concern. Immediately after the Barker decision, I got a petition from people in the shipbuilding area where I live signed by 200 members of the families of people suffering from asbestos-related diseases. It is a terrible disease. In fact, if I go for an X-ray tomorrow I may have to declare an interest, bearing in mind the conditions in which I worked in the shipbuilding industry. But these men cannot afford to wait, nor can their families. I say to my noble friend that we should get this on the statute book as quickly as possible and ease some of the problems and worries that these people have.
My Lords, the underlying decision in this case by the Appellate Committee is one of great interest to me, because it resulted from digging deep into a coal board case which I had lost a considerable time ago. It is a decision remarkable for the clarity of its foundations. The more recent decision, which this set of proposals is intended to deal with, is more limited in its scope. I believe that retrospection is something that normally we would not tolerate, but it has happened from time to time. Perhaps one of the most astonishing cases in which it happened was with the Burmah litigation of some years ago, on which I happened to be instructed on behalf of the Government, who having lost before the Appellate Committee initiated legislation to overturn the decision. This retrospection appears to me entirely justified. Subject to the details mentioned by noble Lords, what has been proposed is eminently justified.
It may be reasonably clear that, when an employer has become bankrupt or disappeared, if there was an insurance policy and the insurer was still available for a suit, the rights against insurers legislation would appear to give a remedy to a family under these provisions in the same way as if the employer itself was still available and solvent.
I strongly sympathise with the sentiments expressed by the noble Lord who immediately preceded me. I had many cases relating to the shipbuilding industry when I was rather younger than I am today, and the conditions under which it operated were very difficult. I hope that legal jargon would in no way deprive those who worked in it of their undoubted rights.
My Lords, I am grateful to noble Lords who have participated in this short but important debate. As my noble friend Lord Dixon was speaking, I was aware that the noble Lord, Lord Hunt, had described this issue as attracting emotion. I think that the noble Lord will agree with me that the strength of feeling displayed by my noble friend is precisely the reason why—and I think that the noble and learned Lord, Lord Mackay of Clashfern, was alluding to this—it is so important that we have brought forward the measure in this way.
The noble Lord, Lord Goodhart, is right in saying that the Appellate Committee made the right decision. We looked at the practical consequences of that decision, and decided that they warranted us to think how we might deal with what were clearly going to be intolerable conditions for people suffering from this terrible disease. It is right, too, that the DTI joined in with the case. It wanted clarification of whether liability should be joint and several. The consequences of the case were entirely appropriate for us to bring forward this amendment to the Bill.
It is important, and the noble Lord, Lord Hunt, put it very well, that those who suffer from this disease are able to get the compensation they need as quickly as possible. I stress again that this amendment is but part of the work that will continue to be done by my department and by my right honourable friend the Secretary of State for Work and Pensions.
Retrospectivity is something we thought about extremely carefully, for all the reasons indicated by those who have spoken. This is exceptional. It is not about setting a precedent. However, as the noble and learned Lord, Lord Mackay of Clashfern, indicated, from time to time—but only very occasionally—there may be circumstances where that is appropriate. The noble and learned Lord referred to another situation where that was the case.
My Lords, I was not suggesting that they were the same. I was simply trying to indicate that from time to time in Parliament one looks at this issue. The noble Lord, Lord Hunt, asked whether I would describe this as unique, and I am reluctant to do so, because I do not know what may happen in the future. I accept, however, that the particular circumstances make this case exceptional. I do not think that any noble Lord disagrees with me on that. I was not trying to make the two things fit together, and I apologise if that was the impressionI gave.
The noble Lord, Lord Hunt, said that until we got to this point, he thought that I was behaving extraordinarily well as a Minister on this legislation. I am always sad when I disappoint. We have talked to the noble Lord’s team quite frequently over the past few weeks and shared as much as we possibly could. But the noble Lord is right: when dealing with something at great speed because it is important, we may not do as much as we could—and I clearly did not. If I failed to discuss this as fully with the noble Lord as I might have, I apologise unreservedly.
I hope, though, that what has ultimately come before your Lordships’ House will be acceptable. When discussing this with stakeholders, we have tried to deal with those who can help us ensure that it works in practice. Noble Lords may disagree and think that we should have consulted more widely. We think that we consulted as appropriate, to ensure that we had something that would work. I hope that noble Lords will be happy with what we have done.
I shall deal with the specifics of the amendments tabled by the noble Lord, Lord Hunt. I understand the point that the noble Lord is making in Amendment No. 1A. This is not a new issue. It was dealt with by the courts before Barker, as the noble Lord will know far better than I, in the case of Phillips v Syndicate 992. The court took the position that the liability for insurers was joint and several. Nothing in this legislation affects that decision or would make the courts decide it differently in the future. The difficulty with the amendment is that—we have discussed this with our own legal team—it appears to go further than the rest of the provision in beginning to codify the common law in this area, which is not needed and which I do not think the noble Lord wants. The noble Lord will be aware that it could lead to difficulties in the future if we tried to do that. We believe that we have addressed the point. We have looked very carefully at the noble Lord’s amendments, as he would expect.
Amendment No. 7A seeks clarity that the element of retrospective effect in the amendments is limited to settlements that were made on the basis of the Barker case. We agree with the sentiment behind the amendment because it is right that the retrospective effect is strictly limited. However, we do not believe that the amendment is necessary to achieve that end and we are not sure that it would achieve the desired outcome in any event. I am very happy to write to the noble Lord to that effect and put a copy of the letter in the Library.
It is clear that new subsection (5) of Clause 15 is about claims that are affected by new Clause 3, as a result of the drafting of new subsections (3) and (4). The retrospective element is achieved by the combination of new subsection (3), which says that new Clause 3 has always had effect, and new subsection (4), which limits the effect to settlements and determinations on or after 3 May 2006.
New subsection (5) follows that drafting, and indicates in paragraph (c) that an application for a court to vary a settlement will be limited to considering the effects that new Clause 3 has on the settlement. So if a case is not affected by the new clause, the court will not vary the settlement, and it will be open to the court to penalise the applicant in costs.
Amendments Nos. 7B and 7C, standing in the name of the noble Lord, Lord Hunt of Wirral, address similar objectives to the first amendment. They attempt to make it clear that the jurisdiction of the court is limited to cases where there has been a settlement or determination based on those considerations. As already indicated, it is clear that any application to the court under these provisions must be about the interaction of new Clause 3 with the original settlement or determination. Moreover, since the application would be retrospective in nature, the court would be likely to construe its power narrowly. But a court considering such a matter must necessarily be seized of the whole case to consider those matters effectively. We are concerned that these amendments might impinge on that ability. They appear to suggest that a court could not consider the settlement or determination as a whole.
The noble Lord was concerned that the Civil Procedure Rule Committee should be involved. We are not sure that detailed rules on this would be necessary as the clause already establishes a clear presumption, but we intend to ask the committee to consider the need for rules on the provision by claimants to defendants of a full employment and exposure history to facilitate the recovery of contributions. I am happy to confirm that.
The noble Lord, Lord Hunt, also asked about the transactional costs of pursuing claims being too high. I could not agree more that there is a need to improve the system for dealing with these claims to ensure that compensation is paid more quickly and in a less costly way. We will be taking forward work to address these issues and I would be delighted to keep the noble Lord in touch with that. I look forward very much to discussing that with him.
The noble and learned Lord, Lord Mackay of Clashfern, partly answered the question of the noble Lord, Lord Goodhart, about compensation when a defendant is not available. As the noble and learned Lord said, the financial services compensation scheme applies where insurers exist—that is its purpose. To try to expand it beyond that would be to take away its purpose. But I am aware of the issues, and I shall come back to the noble Lord because he rightly raises concerns about those who cannot find the relevant person in those circumstances. We will look at that in the work that is continued. The noble Lord wished to deal with a point raised by his honourable friend Mr Howarth, whom I know quite well from the Select Committee, concerning the element in the Barker case that recognised that any non-tortious exposure to asbestos suffered by the claimant did not mean that defendants who negligently exposed could escape liability. He suggested that the clause as drafted did not make that clear.
We have looked at the point, and I will write toMr Howarth to confirm that. We do not consider this a problem in the drafting of the clause, becausethe relevant conditions for liability are that the responsible person has negligently exposed the victim and is liable in tort. Nowhere is it said that that liability must be determined only in accordance with cases determined before 3 May 2006. The liability mentioned in new subsection (1)(d) is the liability as the courts would determine it now. So I do not think that anything is needed to retain that part of Barker. Of course, it is always up to the courts to decide matters of common law differently, but there is no reason in this case to expect them to do so. We are therefore satisfied that we have dealt with that point as well as we can.
The noble Lord, Lord Goodhart, asked whether the Government would pay costs. I cannot make any commitment today, but I will look into the issue and write to the noble Lord.
I hope that I have answered as well as I can all the questions that have been raised by noble Lords. I am grateful for the contributions which have been made, especially that of my noble friend Lord Dixon. I hope that the noble Lord will not press his amendments but will accept the government amendments.
My Lords, before the noble Baroness sits down, perhaps I may raise one point with her. She said that consideration was being given to how to deal with the problem of cases where there is a claimant but no possible defendant. Is there any possibility of dealing with it without further primary legislation? It is difficult to see how that could be done.
My Lords, I do not know. It may be a matter for my right honourable friend at the Department for Work and Pensions to look at. I do not know at this stage what can be done. However, we are aware of the issue, and I will keep the noble Lord in touch with any considerations we give to it.
My Lords, this has been a very important debate. I very much welcome the comments made by the Minister, and I will reflect on them. I thank the noble Lord, Lord Goodhart, for raising a number of important points and seeking clarification on a range of issues. I also thank my noble and learned friend Lord Mackay of Clashfern for pointing out some important historical context.
The outstanding contribution was that of the noble Lord, Lord Dixon, who expressed all the emotion that I feel about these cases. I have the honour to be the president of the All-Party Group, and I have therefore heard about some tragic cases. I share with him not only a concern about those who are fortunate enough to have a cause of action and a defendant to sue, but a much more worrying concern about the hundreds of people who are dying every year but have no claim at all. They include people who served in the conditions that the noble Lord has outlined.
That is why I really hope the Minister will be able to encourage her ministerial colleagues to adopt a more comprehensive solution—a solution which will involve the Government. As I understand it, the Government are involved as a defendant in over half the cases we are talking about, and every year brings the death of more of those involved in the cases. Although I do not know the exact statistics, the Government have not only an interest in these cases but are under a very strong obligation to find some sort of scheme to ensure that those diagnosed with this terrible disease immediately receive some form of benefit or compensation. I commend the work carried out—indeed, instigated—by a number of leading insurers and by the Association of British Insurersin trying to find a way through. However, the Government must lead in finding the way through. I hope that the Minister and her ministerial colleagues will come forward with some form of comprehensive scheme that covers the wide range of people diagnosed with this appalling disease.
I am therefore saying to the noble Lord, Lord Dixon, that I hope his outpouring of emotion—understandable by everyone who heard it—will result in some consideration for all those who do not have a cause of action which they can utilise to find some benefit in the last few years of their lives, and also in some reassurance that, once they have gone, their families will be protected in some way. I hope that we will concentrate on that over the coming months.
I thank the noble Lord, Lord Dixon—with whom I had the privilege of working closely in the other place, given that we were Deputy Chief Whips of our respective parties. For those who do not understand the position of Deputy Chief Whip, I should say that we ensure that the wheels go round and are properly oiled. I have had the highest respect for him and his integrity throughout the time I have known him. I am so grateful to him for contributing to this debate. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Motion agreed to.
2: Clause 3, page 2, line 38, at end insert-
“(5) The Secretary of State may by order provide that a claim for a specified benefit shall be treated as a claim for the purposes of this Part.
(6) The Secretary of State may specify a benefit under subsection (5) only if it appears to him to be a United Kingdom social security benefit designed to provide compensation for industrial injury.”
3: Clause 14, page 8, line 44, at end insert-
“(3A) An order under section 3(5) may not be made unless a draft has been laid before, and approved by resolution of, each House of Parliament.”
4: Page 9, line 8, at end insert-
“(5A) The first order made under section 5 may not be made unless a draft has been laid before, and approved by resolution of, each House of Parliament.
(5B) An order under section 5 which has the effect of removing or restricting an exemption from section 3(1) may not be made unless a draft has been laid before, and approved by resolution of, each House of Parliament.”
5: Page 9, line 9, leave out “An” and insert “Any other”
My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 2 to 5.
The other place supported government amendments that explicitly provide the statutory power for the Secretary of State to bring claims management services provided in relation to industrial injuries disablement benefits within the regulatory net. Amendment No. 2 provides for this, and Amendment No. 3 provides for the order to be made by affirmative resolution.
Citizens Advice and his honour Judge Michael Harris, president of the Social Security and Child Support Appeals Tribunal, have raised specific concerns about claims management activities in claims for industrial injuries disablement benefitsand some other welfare benefits. Commercial intermediaries here typically charge a flat fee for this service or take a percentage of the benefit payment if the claim is successful.
Our legal advisers considered further the definition in Clause 3, and despite its breadth, there is sufficient doubt whether claims management services in those types of claims would be covered to justify bringing forward these amendments. The amendment is precisely targeted on industrial injuries disablement benefits, which are benefits of a compensatory nature. It does not extend to welfare benefits more generally, which would be beyond the scope of the Bill.
The Government accepted an amendment tabled in the other place by Mr Simon Hughes that changes the order-making power in Clause 5 to affirmative. Amendments Nos. 4 and 5 will require the initial exemption order and any subsequent restriction or removal of exemption to be debated in your Lordships’ House and another place. We hope to capture almost everyone in the first order. But we are working with an unusually broad definition here, so a small number of organisations may well emerge that fall within the definition but which it is not appropriate to regulate. Subsequent orders are therefore likely to be used to tidy up anomalies.
Moved, That the House do agree with the Commons in their Amendments Nos. 2 to 5.—(Baroness Ashton of Upholland.)
My Lords, I welcome this group of amendments, which give us an opportunity to reflect for a moment on where, apart from the debate we have just had, we are with the rest of the Bill. The Bill started out as a short and comparatively straightforward piece of legislation but has had an unusually complicated passage through this House and another place. However, I am pleased that Clause 1 has survived more or less intact. Part of me still wishes to give the clause only two cheers rather than all three, but it is generally to the good and its drafting has been somewhat improved. I welcome that.
As the originator of Clause 2, it is natural that I should allow myself to revel at least momentarily in its survival. It is highly consonant with the original intention of the Bill. I hope that it will serve to correct distorted perceptions, restore a modicum of much-needed civility to society, and, above all, give a strong impetus to the process of rehabilitation.
However, the second half of the Bill, to which the Minister referred, dealing with claims farmers, has always received a warm welcome on all sides of this House, and rightly so. Much of the important work in that area continues as the regulations and the trade union code of practice are scrutinised, and I hope to play my part in that process. I understand from the Minister that this might be a good opportunity for her to update the House on progress made towards getting the new regulatory system up and running. I therefore look forward to hearing from her about the latest steps.
I have always given this Bill a broad welcome and, despite the various changes made to it, I still do. I hope that it will serve to restore some civility, decency and—yes—some justice to this country of ours.
My Lords, I am entirely happy with these further amendments and I am very pleased indeed that they resulted from the Government accepting an amendment proposed by my honourable friend Simon Hughes. The fact that there are very few Commons amendments, other than those relating to mesothelioma, indicates that the Minister and her team of civil servants did a very successful job in greatly improving the Bill earlier when it was in your Lordships’ House. I congratulate her on that.
My Lords, I am very grateful for those comments. I shall take a moment to inform noble Lords about what we have been doing; the question of the noble Lord, Lord Hunt, gives me an opportunity to do so. Noble Lords who participated in the passage of this Bill were keen to see us get on with it and I made commitments about timing.
We will come back to Parliament in the autumn to debate secondary legislation that will underpin the new regime. We have made good progress and have recently launched a formal consultation on the draft secondary legislation and conduct rules, which will include regional consultation workshops with claims intermediaries in Newcastle, Manchester and London. These set out in detail matters such as the authorisation criteria, the complaints handling requirements, indemnity insurance and situations in which it would be appropriate to cancel or suspend authorisation. In the next few weeks we are going to launch the remaining consultations on the exemption order, authorisation fee levels and the application form.
I informed noble Lords at Report that we expect the regulation to be integrated into the regulatory structure to be provided for by the Legal Services Bill. I also set out an interim solution for dealing with regulation. An announcement was made in the other place that in the interim the Secretary of State, my noble and learned friend the Lord Chancellor, will regulate, supported by existing officials, together with appropriate senior expertise, skills and experience that are brought in from outside the Civil Service.
I have referred before to the likelihood of a senior individual being recruited to help guide the successful implementation of the new regime. I am pleased to confirm today that, subject to finalising terms, Mark Boleat will be taking on this important role formally from the beginning of September.
A key part of the proposed mechanism will be an external monitoring and compliance unit, whichwill help to process applications for authorisation, maintain a register of authorised persons, monitor compliance with the rules, monitor advertising and marketing activity, identify persons who are evading authorisation and advise the DCA on disciplinary matters and formal regulatory decisions. This will be supplied under contract by a single trading standards team operating across England and Wales, making full use of the networks already in place. The DCA retains full authority and responsibility for regulation but working with the right trading standards operation should help to ensure the early delivery of benefits to consumers.
I have already visited Birmingham and the City of London trading standards units to learn more of the work they currently do. We have just concluded an expression of interest exercise and will be inviting shortlisted departments to prepare detailed proposals. I expect the unit to be operational by October.
We are also establishing a non-statutory regulatory consultancy group made up of representatives of the financial services and insurance industries, the legal profession, consumer groups and the claims management sector. It will help ensure that we continue to engage fully with all those who have an expert interest in making a positive difference in the claims sector. The group’s first meeting will be next week.
The timetable for regulation we are working tois as follows. The regulatory mechanisms will be established in October 2006; applications will be invited from November 2006; the deadline for applications is February 2007; the tribunal is to be established in February 2007; and offences and remaining provisions will go live in April 2007.
In earlier debates I stressed the speed with which we have brought forward measures to regulate the claims management sector. I hope that noble Lords are reassured by that brief but, I hope, detailed résumé of the amount of work that has been going on since the Bill left your Lordships’ House; it will continue through the summer months. I hope that I have given some comfort to those who are concerned that we need to be seen to get on with it.
On Question, Motion agreed to.
6: Clause 15, page 9, line 16, leave out “section 1” and insert “sections 1, 2 and (Mesothelioma: damages)”
My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 6.
Moved accordingly, and, on Question, Motion agreed to.
7: Page 9, line 22, at end insert-
“(3) Section (Mesothelioma: damages) shall be treated as having always had effect.
(4) But the section shall have no effect in relation to-
(a) a claim which is settled before 3rd May 2006 (whether or not legal proceedings in relation to the claim have been instituted), or
(b) legal proceedings which are determined before that date.
(5) Where a claim is settled on or after that date and before the date on which this Act is passed, a party to the settlement may apply to a relevant court to have the settlement varied; and-
(a) a court is a relevant court for that purpose if it had, or would have had, jurisdiction to determine the claim by way of legal proceedings,
(b) an application shall be brought as an application in, or by way of, proceedings on the claim, and
(c) a court to which an application is made shall vary the settlement to such extent (if any) as appears appropriate to reflect the effect of section (Mesothelioma: damages).
(6) Where legal proceedings are determined on or after that date and before the date on which this Act is passed, a partyto the proceedings may apply to the court to vary the determination; and-
(a) “the court” means the court which determined the proceedings,
(b) the application shall be treated as an application in the proceedings, and
(c) the court shall vary the determination to such extent (if any) as appears appropriate to reflect the effect of section (Mesothelioma: damages).”
My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 7.
Moved, That the House do agree with the Commons in their Amendment No. 7.—(Baroness Ashton of Upholland.)
[Amendments Nos. 7A to 7C not moved.]
On Question, Motion agreed to.
8: Clause 16, page 9, line 24, at end insert-
“(2) But section (Mesothelioma: damages) (and section 15(3) to (6)) shall extend to-
(a) England and Wales,
(b) Scotland, and
(c) Northern Ireland.”
My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 8, to which I spoke with Amendment No. 1.
Moved accordingly, and, on Question, Motion agreed to.
9: Clause 17, page 9, line 27, leave out subsection (2)
My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 9. This is the privilege amendment.
Moved accordingly, and, on Question, Motion agreed to.
10: In the Title, line 2, after “duty;”, insert “to make provision about damages for mesothelioma;”