Insurance Post

Edging towards a pleural plaques solution

Today's announcement by the Ministry of Justice that it is not prepared to overturn the Law Lords' ruling that pleural plaques is not a condition that should attract compensation payouts will be welcomed by the insurance industry, as the Association of British Insurers has been quick to confirm. It is, however, a messy decision that will leave alot of people dissatisfied.
Broadly, it is the right decision but creates several anomalies in its wake.
Firstly, people who had already started a compensation claim in the courts before the Law Lords' decision in October 2007 will get an ex-gratia payment of £5000, funded by the government, but people whose claim was not yet in the courts will get nothing.
Secondly, the MoJ decision only covers England & Wales as Scotland has already passed legislation that allows people to pursue compensation claims for pleural plaques and Northern Ireland is apparently considering going down the same route. There will be alot of frantic searching through employer records by claimant solicitors trying to find Scottish connections to claims to enable them to bring a case north of the border. This will probably only raise false hopes among people trying to claim.
The other parts of the announcement make more sense as they deal with getting the right compensation into the hands of people who are suffering the full-blown effects of asbestos related conditions much quicker. The beefed-up Employers' Liability Tracing Office is a must and it is good to see the ABI continuing to back this. Not surprisingly, the ABI is also supporting the work being done to reduce the length of time it takes to process a claim for mesothelioma which currently stands at an average of around two years. This is far, far too long for a disease that moves with relentless speed to debilitate the sufferer. It will need alot of goodwill on the part of everyone involved in the review of the claims process to get a genuine improvement, especially the solicitors who stand to earn alot less out of a much faster, more efficient system.
The MoJ has also said that it is continuing to consult on the idea of setting up a fund of last resort when an employers' liability policy cannot be traced and, once again, the ABI has been conspicuously silent on this
I still think this is something the industry should support and maybe it should bring a willingness to consider it to the table when looking at the claims process. It would be a sensible strategy to say that it would support a fund of last resort if many of the unnecessary (legal) costs were taken out of the system. It should also highlight that a fund of last resort would be asked to deal with three rather different basic scenarios and that these probably need to be funded separately.
The first is where the insurance industry has screwed up the record keeping and neither broker nor insurer can be found that has the correct records: this is what the insurance industry should fund. The second is where an employer was trading illegally by not having cover in place and this should probably be funded jointly, perhaps with a contribution from fines levied on employers. There is also, potentially, a small legacy from a third category which is employers who did not have cover but where the contact with asbestos pre-dates the late 60s introduction of a legal requirement to have EL cover. It is hard to argue that this should be included in an insurer funded scheme, although if the government wanted to contribute to it that would be a different matter.
Where the insurance industry really does have something to contribute by supporting the proposal for an Employers' Liability Insurance Bureau is in pressing for stiff penalties for companies (and the directors of those companies) that have broken the law by not taking out the right cover. That would leave us so much less likely to face a similar problem ever again.
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