New support scheme for mesothelioma victims criticised

A new support scheme for newly diagnosed victims of mesothelioma was announced by the government at the end of July 2012 and the first payments are due to be made in 2014. The Mesothelioma Act 2014 which became law in January 2014, made provision for a new compensation scheme funded by insurance firms which is due to pay out to in excess of 800 eligible people from July 2014 and 300 every year after that, until 2024. Victims, or their dependents (where the sufferer has died), will receive higher payments than the statutory schemes currently operated by government. They will also get an additional £7,000 towards legal expenses.

In March 2014, the government announced that around 3,500 mesothelioma victims across the UK who have until now been unable to claim compensation because they could not trace a liable employer or employers’ liability insurer, will be able to apply to receive compensation packages under the new compensation scheme worth approximately £123,000 on average. These payments will be in addition to the £200 million the insurance industry already pays each year in compensating mesothelioma sufferers.

The claims handling company Gallagher Bassett has been appointed to run the compensation scheme.

The new support scheme was confirmed in the Queen’s speech in May 2013, to introduce a long-delayed compensation scheme for asbestos victims. The scheme is one of last resort for people with the fatal asbestos-related cancer who are unable to trace their employer’s liability insurance.

But campaign and support groups said that the scheme will exclude hundreds of asbestos victims. It limits support to mesothelioma, rather than all asbestos-related diseases and imposes an eligibility cut-off date, meaning that only those diagnosed after 25 July 2012 can apply under the scheme.This means that hundreds of people diagnosed before that date who are unable to trace their employer’s liability insurer will lose out altogether and others will see average compensation cut by 30%.

As a result, the insurance industry has saved billions of pounds by not paying out on old policies because their details cannot be found. The announcement of a compensation scheme was a breakthrough for the families of asbestos victims, but they were disappointed when it emerged that they face being charged up to 25% of their awarded damages to pay for legal costs.

These victims used to keep the whole amount if they won a payout and the insurers would pay their legal fees, the so-called “success fee”. But under new rules contained in the Legal Aid, Sentencing and Punishment of Offenders Act the victims will have to pay the fee out of their compensation, saving the insurance industry a fortune.

The compensation scheme has been the subject of a Justice Select Committee investigation which reported at the beginning of August 2014. It discovered that the coalition government had entered into a secret deal with insurers before deciding on the amount of compensation payable, the details of which they refuse to publish. In addition, because of the time-lag between exposure and a cancer developing many people cannot trace the insurer of the employer which allowed them to inhale the lethal fibres with no protection.

TUC general secretary Frances O’Grady said: “The Justice Committee is right to criticise the shoddy deal done between the insurance industry and the government. Victims of this terrible and fatal illness deserve proper and swift recompense. We hope that the government will urgently accept the recommendations of the Justice Committee and do the right thing for the victims of mesothelioma, 2,500 of whom die each year as a result of exposure to asbestos through their employer’s negligence.”