Major failure of UK Government towards Mesothelioma victims diverts money to the insurance industry

I was not planning to write a post on the Mesothelioma Bill until the Bill had completed all its stages through Parliament. However, I feel it is appropriate to post a comment at this stage as it has become very apparent that unless there is a dramatic change of direction, the policies of this Government will lead to mesothelioma victims losing vast sums of money in favour of the insurance industry.

On the 29th November the Department of Works and Pensions (DWP), the Department who are overseeing the Mesothelioma Bill through Parliament, issued a quite nauseating Press Release trumpeting Major breakthrough for victims of devastating cancer mesothelioma. The Press Release issued ahead of the debate on the Mesothelioma Bill in the House of Commons, announced that over the next 10 years more than 3000 mesothelioma victims will benefit to the tune of more than £350 million.

Just five days later however, on the 4th December, another Press Release, this time issued by the Ministry of Justice, more conspicuously headed Industrial disease victims central to changes, announced that the Government planned to implement the changes in regards to the no win no fee system introduced by the LASPO Act, for mesothelioma claims. Following sharp criticism of the LASPO provisions in Parliament and their potential impact on mesothelioma victims, the Government put on hold the changes for mesothelioma claims whilst they conducted a review. What this announcement will mean is that mesothelioma claims will fall into line with all other types of civil claims, with up to 25% of a claimants general damages going to their lawyers in success fees. Prior to the changes introduced by LASPO, success fees were paid by the losing defendants. To try to soften the burden the Government at the time LASPO was being enacted introduced an across the board uplift of 10% for all damages.

A few rough calculations highlight how the insurance industry will benefit financially overall from these two measures. Whilst they may be funding the scheme to provide compensation where employers liability insurance policies cannot be found, at the time of writing this is proposed to be only at 75% of what a claimant on average would obtain if they were able to bring a successful legal action.

The latest financial impact assessment documentation being used by the Government in considering the Mesothelioma Bill and its financial impact on the insurance industry, states that up to March 2024, around 3500 successful claims are likely to be made under the scheme. Over the same period the impact assessment believes that there will be just under 16,000 successful civil claims. Currently the average value of a mesothelioma damages claim is around £154,000. This figure will be made up of a number of elements which would include for example the pain and suffering from the disease itself, loss of earnings, and other costs incurred by claimants. Under the 11th edition of the JSB damages guidelines, the top level award for mesothelioma pain and suffering was £90,000. As the £154,000 figure was only an average, if we added to that figure perhaps £7,000 to reflect the 10% uplift provided for damages by LASPO, then we have a rough average figure of  £161,000. The 25% success fee is based on the level of General Damages awarded, not the Special Damages element of a claim which reflect losses up to the time the claim was decided. Using a very rough figure of 75% of the £161,000 to represent our General Damages, which would include pain and suffering, we come to £120,750. Take 25% of that figure as our success fee gives us £30,187.50.

So if we times £30,187.50 by the 16,000 anticipated successful civil claimants up to 2024, that gives us a total figure of £483 million. This is what mesothelioma victims will have to pay to their lawyers. So take the £350 million gained from the scheme and deduct that from the £483 million, and mesothelioma victims are net losers to the tune of over £130 million. Remembering that under the existing system that the Government are planning to scrap it would primarily be the insurance industry who pay such fees, and it seems clear that overall the insurance industry are coming out of these changes financially enhanced, in contrast to mesothelioma victims, who overall are the undoubted losers.

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