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Compensation Bill [HL]

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 underway 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.)