Legal Aid, Sentencing and Punishment of Offenders Bill
Committee (6th Day) (Continued) Monday January 30th 2012
Moved by Lord Alton of Liverpool
137A: Clause 43, page 30, line 23, at end insert-
“( ) The amendments made by this section do not apply in relation to proceedings which include a claim for damages for respiratory disease or illness (whether or not resulting in death) arising from industrial exposure to harmful substance.”
Lord Alton of Liverpool: My Lords, earlier in our Committee’s proceedings today, the noble Lords, Lord Beecham and Lord Newton of Braintree, were good enough to provide a curtain raiser for the amendment that we are about to consider. Amendments 137A, 156A and 156B fall in Clauses 43, 45 and 46 and happily enjoy all-party support from all parts of your Lordships’ House. I am grateful particularly to my noble friend Lord Wigley and the noble Lords, Lord Avebury and Lord Bach, as fellow signatories to the amendment. I should also say that the noble Lord, Lord Newton of Braintree, asked me to add that he, too, is a firm supporter of the amendment, as are my noble and learned friend Lady Butler-Sloss and my
30 Jan 2012 : Column 1414
noble friend Lord Martin of Springburn. The noble Lord, Lord Walton of Detchant, was also in the Chamber briefly earlier, and he asked me to say that he, too, has acute anxieties about the negative impact of these new arrangements on people suffering from mesothelioma. I think that the Minister would agree that this demonstrates that there is concern from all parts of your Lordships’ House, which I hope he will take seriously.
At the outset, I would like to pay tribute to the Asbestos Victims Support Group Forum UK and especially to Mr Tony Whitston, who took the trouble to come to Westminster to meet my noble friends Lord Wigley, Lord Avebury and myself-I know that he has also briefed the noble Lord, Lord Bach-and to set out the concern of mesothelioma victims, which he did with great clarity and with passion.
As the Bill currently stands, these mesothelioma sufferers, whose life expectancy is nine to 12 months from diagnosis, will be required to surrender 25 per cent of general damages-the damages average about £65,000-in success fees. These amendments would permit those suffering from an asbestos-related illness or other respiratory diseases to recover success fees and “after the event” insurance from a defendant in a successful claim for damages. However, I would like to split my remarks this evening into mentioning something about the background to this issue; secondly, something about the effects of these amendments; and, finally, four reasons why I hope that the amendments will commend themselves to the Committee and to the Government.
Up until 1995, when conditional fee agreements were introduced, most mesothelioma sufferers, along with many personal injury claimants of modest means, used legal aid to seek justice in the courts. In 1949, an estimated 80 per cent of the population satisfied the income criteria for legal aid, but by 1990 only 48 per cent qualified. As middle-income claimants were increasingly denied access to justice and given the Government’s determination to cut the cost of legal aid, in 1995 CFAs were introduced. Between 1995 and 2000, the success fee and “after the event” insurance were paid by claimants, take-up of CFAs was understandably limited and, wherever possible, mesothelioma cases were still run under legal aid. Trade unions then stepped in to provide additional support for many victims.
When the Access to Justice Act 1999 became effective, on 1 April 2000, the new CFA regime allowed for recovery of success fees and ATE insurance to make up for the abolition of legal aid for most personal injury cases. Under the previous legal aid regime, solicitors were paid for their work even if they lost the case, which allowed them to take on difficult but meritorious cases. The new CFA regime changed the funding arrangements by making provision for success fees, which in many cases have been fixed.
Without doubt, access to justice was certainly improved for everyone, including mesothelioma sufferers, under the new CFA regime from 2000 onwards. Put bluntly, solicitors and barristers were willing to take on riskier cases because the rewards were greater. Be that as it may, the important aspect is that those potential litigants
30 Jan 2012 : Column 1415
who, due to their lack of funds, were hitherto prevented from accessing our courts were empowered by the new arrangements and able to bring their case. This is a conclusion with which the Ministry of Justice itself agrees. Its consultation paper, CP 13/10, Proposals for Reform of Civil Litigation Funding and Costs in England and Wales, states:
“There is general consensus that CFAs have increased access to justice for those who might otherwise not have been able to afford to bring a claim since they became enforceable in 1995, and particularly after the Access to Justice reforms which made CFAs an especially attractive funding method for claimants”.
It is against this background of change that we are considering the Government’s proposals on legal aid, success fees and “after the event” insurance and, in particular, how the new dispensation, as set out in Clauses 43, 45 and 46 will impact on those who suffer from mesothelioma; and why these amendments, tabled with all-party support, deserve the support of the Committee. I hope that the Government, at least in these particular circumstances, despite what the Minister said earlier-that he was inclined to reject any derogation at all from that which has been laid before the Committee-will be prepared to think again.
As currently drafted, Clause 43 provides for success fees to be paid by the winning claimant, not the losing defendant. A success fee is not, as is frequently implied, a bonus for winning the case, or a serendipitous stroke of luck like an unexpected windfall or a win on the lottery. The award of a success fee represents two things. First, on an obvious but important point, it says that the claimant has succeeded in winning their case. The claim is found to be justified in its inception and vindicated in proceeding through its course. Conversely, by extension, the defendant is found to have been wrong as regards the substance of the claim; wrong to seek to defend the claim; and wrong to pass over the opportunity to settle the case at some point in the proceedings-a point which my noble friend Lord Martin made earlier. Their conduct is penalised by having to pay the claimant’s costs. Secondly, the granting of a success fee is a reward for the risk that those acting on the claimant’s behalf have borne in pursuing the claim. The success fee underlines the importance of giving the claimant financial support at some of the most difficult times in people’s lives-and times do not come much more difficult than when you are diagnosed as having a disease that will give you just nine months more to live.
Success fees are calculated as a percentage of base costs. Hitherto, CFAs have enabled meritorious but difficult cases to be investigated and pursued. Most importantly, this meant that test cases, many of which are launched by defendants, may be properly contested. Our common law system that is so cherished depends upon such cases. It is worth reflecting on how many cases over the past decade and more have come before not only the High Court, but the Court of Appeal and Supreme Court under CFA arrangements. These funding arrangements serve to advance and develop case law, but, most of all, ensure that the claimant has access to justice in the highest courts, as well as at the lower end
30 Jan 2012 : Column 1416
of the justice system. It is precisely when test cases and appeals are brought or responded to, upon professional advice, that CFAs are most crucial.
It would be iniquitous if in future claimants are to pay the success fee and will have to underwrite the investigations into cases that are not pursued, or cases which are lost. As a matter of justice, it is fairer that wealthy insurers, more able to spread the risk, should fund a system whose purpose is to ensure access to justice, without which solicitors would be too risk-averse and many cases not undertaken.
At Second Reading, I cited the experience of the President of the Liverpool Law Society, Mr Norman Jones, and a benchmark case which he pursued to the Supreme Court. Hugely significant in the development of the common law concerning mesothelioma, the judgment has given hope to many thousands of asbestos victims who probably would not been entitled to compensation had the Supreme Court appeal by the defendants not been dismissed. The judgment in Sienkiewicz and Greif (UK) Ltd was given in the Supreme Court on March 2011. Mr. Jones handled the action under a conditional fee agreement. There were CFAs for the county court proceedings, the Court of Appeal and the Supreme Court. Norman Jones told me:
“Without the 100 per cent success fee payable under the CFAs the risks of handling this case would have been totally beyond my firm”.
He said that had the new regime been in place and the case had been lost, putting it bluntly,
“my firm may have been facing bankruptcy!”.
Under the new dispensation, lawyers such as Mr Jones would simply not be prepared to act on behalf of asbestos victims. All the dice would be loaded against them.
The second of my amendments is to Clause 45, which provides for “after the event” insurance to be paid by the winning claimant, not the losing defendant. ATE costs are currently paid by the defendant if the claimant wins a case. ATE premiums increase as a case progresses, especially where defendants push a case to trial. Respiratory disease cases are complex cases, and most of them involve asbestos-related diseases. The average ATE cost for mesothelioma is around £2,300. Under these arrangements, claimants will simply not be able to afford the risk of challenging inadequate offers, as the ATE cover of going to trial would simply be prohibitive. Also, the incentive for defendants to make reasonable offers will be diminished. It will become unaffordable to fight test cases run by defendants, or for claimants to run a test case. ATE insurance keeps unmeritorious claims out of the system, at no cost to the defendants, as cases are risk-assessed by the ATE insurer. My amendment would preserve the status quo, which works well.
My third amendment is to Clause 46. The effect of Clause 46 is to prevent the recovery by membership organisations, such as trade unions, of insurance premiums from a losing party. The majority of respiratory disease cases are occupation-related and many are assisted through trade unions. Just as it is wrong to penalise an individual claimant, so it is wrong to jeopardise cases
30 Jan 2012 : Column 1417
run on behalf of trade union members or to discourage their involvement in championing the cases of sick or terminally ill members.
I hope that the Government will consider the following four questions as they reflect on these amendments: the nature of these respiratory diseases; the argument about costs; the winners and losers; and the impact on justice. Anyone who has served as a constituency Member of Parliament will have met desperate victims of asbestos exposure, and will have assisted bereft widows only months later. The life expectancy of a worker diagnosed with mesothelioma is a shocking nine to 12 months from diagnosis to death. Before their cases can be laid before a court, stringent medical reports and exhaustive investigations will be required, especially as most respiratory diseases are long latent diseases-a point made by the noble Lord, Lord Newton of Braintree, in his earlier intervention.
Asbestos disease is primarily found in the trades associated with construction, and silicosis, or Potter’s Rot, among tunnellers and masons. It is known among many miners as the widowmaker. In 2010, asbestos-related diseases accounted for 93 per cent of all industrial injuries disablement benefit payments for respiratory disease. Mesothelioma accounts for 52 per cent of asbestos disease. It is a matter of official record that nearly 50 per cent of respiratory disease claimants paid IIDB suffer from mesothelioma and will die within approximately one year of diagnosis. Most people who develop mesothelioma have worked in jobs where they inhaled asbestos or were exposed to asbestos dust and fibres in other ways. There is also some evidence, as the noble Lord, Lord Beecham, pointed out in his earlier intervention, that even things such as washing the clothes of a family member who worked with asbestos increases their risk of developing mesothelioma.
Symptoms or signs of mesothelioma may not appear until 20 to 50 years, or more, after exposure to asbestos. Shortness of breath, coughing and pain in the chest due to the accumulation of fluid in the pleural space are often symptoms. Other symptoms include weight loss and cachexia, and, in cases of peritoneal mesothelioma, abdominal swelling and pain occurs due to a build-up of fluid in the abdominal cavity. Other symptoms may include bowel obstruction, blood-clotting abnormalities, anaemia and fever. If the cancer has spread beyond the mesothelium to other parts of the body, symptoms may include pain, trouble with swallowing or swelling of the neck or face. It is a wretched disease-a death sentence with fatal consequences.
All over this country, men and women were exposed for decade after decade to toxic substances, mostly at work, which ruined their lungs and cost many their lives. In the Greater Manchester area last year alone there was an increase of 38 per cent in the number of victims, up to 117 from 85 the year before. It is expected that mesothelioma deaths will peak in 2016, but recent studies suggest that they may peak earlier. Nor is the suffering caused by this tragic legacy of exposure over yet. According to the latest projections, about one in 70 of all British men born in the 1940s will die of mesothelioma, while one in 10 carpenters
30 Jan 2012 : Column 1418
born in the 1940s, with 10 years’ working experience before the age of 30, will die of mesothelioma or asbestos-related lung cancer.
To date, over 30,000 people in the United Kingdom have died from mesothelioma and over 60,000 more are yet to lose their lives due to past exposure. Let us not forget that the vast majority of respiratory diseases are contracted at work. Sufferers sacrificed their health and often their lives working to pay for their families and contributing to the wealth of this country. It seems iniquitous that such people should have to bear the costs of litigation.
I shall illustrate the sort of situation that I have in mind. While I was a Member of another place during the 1980s, the then Member of Parliament for Leeds West, Mr John Battle, raised in the House of Commons the Armley asbestos disaster, which involved the contamination with asbestos dust of an area of around 1,000 houses. The contamination was the result of the activities of a local asbestos factory, part of the Turner and Newall group, often referred to by the name of its founders, JW Roberts Ltd, and occurred between the end of the 19th century and 1959 when the factory eventually closed. At least 300 former employees are believed to have died from asbestos-related illnesses, and I was struck that when the new Member for Leeds West, Rachel Reeves, made her maiden speech after the most recent general election, this was one of the issues that she mentioned.
I turn to the argument about costs. As currently drafted, the Bill misses the point. It purports to tackle a compensation culture, fraudulent and frivolous claims and disproportionate costs. Ministers have acknowledged that there is only the perception of a compensation culture, but, that aside, the Bill does nothing to tackle the identified problems such as fraudulent whiplash claims, which I am told total a staggering £2 billion annually, while it highlights issues such as this one. Mr Nick Starling, the director-general of the Association of British Insurers, giving evidence to the Bill Committee in the House of Commons, made the point that the Bill is tackling the wrong target; it should be about the £2 billion of whiplash claims, by far the greatest in Europe, not,
“people who have been injured or they are ill and it is not their fault”.
It is cases such as mesothelioma, he said, that need,
“speedy and correct redress”.-[Official Report, Commons, Legal Aid, Sentencing and Punishment of Offenders Bill Committee, 14/7/11; col. 148.]
Why then do these three clauses shoot the wrong fox, a metaphor used earlier by the Minister, and put at risk litigants who have, as Mr Starling said, genuine claims and have been injured or are ill? Furthermore, the Law Society has estimated that these changes will not save the Exchequer money but will result in a net loss of some £70 million. When all the cases that would have gone forward under the current system no longer proceed-perhaps as many as 50,000-the Exchequer will be unable to recover, for example, the lump sums that it has received via the Pneumoconiosis etc. (Workers’ Compensation) Act 1979 and the 2008 diffuse mesothelioma scheme. The Treasury recovered over £16 million mesothelioma lump sum payments in
30 Jan 2012 : Column 1419
2010-11 alone. Much of that recovery, plus the recovery of benefits, will be lost to the Government. Where are the savings to the public purse?
Incidentally, prior to the Government recovering lump sum payments in 2008, the insurance industry in effect recovered the payments by taking those payments into account when paying compensation. Over a 10-year period prior to 2008, insurers gained a windfall of at least a staggering £100 million. Nor should we forget the widely acknowledged advances that Senior Master Whitaker has made in the case management of mesothelioma claims, speeding up the resolution of those claims in the Royal Court of Justice and, through his practice direction, improving the management of claims in other courts. Much has been done to reduce litigation costs and much continues to be done in fixing costs, which does not and need not add to government costs and punish asbestos victims.
There are winners and losers here. The winners will be the insurance industry in particular. I refer the Minister to the report that appeared in today’s Guardian newspaper under the headline,
“Insurance lobbyists were briefed by mandarins over legal reform”,
where Desmond Hudson, the Law Society’s chief executive, said:
“This looks like being legislation for the insurance industry, by the insurance industry”.
I am sure the noble Lord will want to disabuse us all of the idea that that might be so. However, he will understand that while there are issues such as this one before the House tonight, it is easy to see why such headlines might be written. The Moritz and Gavan report shows that there will not be a saving to government as a result of the proposals in the Bill. Claimants will also be the losers. Public liability and employer liability claimants will lose compensation under the proposals.
Lastly, what will be the impact on justice? If these amendments are not accepted, Parliament will make responsible for litigation costs those who have suffered grievously and require them to surrender a quarter of the compensation awarded to assist them and their families. It would be a tragedy and a profound injustice if, without serious objection, we did not seek to rectify that injustice.
When he was Lord Chief Justice, Lord Bingham said that,
“the laws of our country exist for the benefit of the poor as well as the rich; that equality before the law is a pretence if some citizens can assert and protect their rights and others cannot; that the rule of law, to be meaningful, must ensure that justice is available to all”.
If that principle is not to be extended to victims of mesothelioma, to whom is it to apply? There are key questions which the Government need to answer. How would it be possible to bring a fraudulent mesothelioma case? How would it be possible to bring a frivolous mesothelioma case? The Minister knows the answers as well as I do. The answers are self-evident, which is why, as a matter of basic natural justice, I hope that the Government will be persuaded to accept these amendments and that noble Lords will give them their support. I beg to move.
30 Jan 2012 : Column 1420
Lord Avebury: My Lords, the noble Lord, Lord Alton, referred to the curtain-raiser debate we had a few hours ago in which, among others, the noble Lord, Lord Newton, spoke. He told your Lordships that the nature and problems of mesothelioma called for special treatment. It took us a very long time to recognise the immense dangers to public health caused by mesothelioma. It took us even longer after that to take steps to ban the use of asbestos and, finally, to get under way with proper means of compensation for the victims of this frightful disease.
In the 1970s I was privileged to have a lot to do with the late Nancy Tait, who was described in her Guardian obituary two years ago as a,
“tenacious campaigner for the victims of asbestos diseases”.
Nancy was the founder of the Society for the Prevention of Asbestosis and Industrial Diseases, which lobbied hard for tighter controls on asbestos, and she fought for the rights of victims to adequate compensation. In 1976, the Silbury Fund published a booklet entitled “Asbestos Kills”, written by Nancy, exposing the failure of Governments to act against the risks, even though the Department of Health had known, at least from 1968 onwards, that,
“mesothelioma can be produced by slight exposures, and … We must assume that no amount of exposure is completely free from risk”.
Water pipes were still being made of asbestos cement; electric toasters were still being made with the element wound around a piece of asbestos, and in people’s homes, sheet asbestos was being cut for partitions, to block fireplaces or to line doors. Thirty-six years later, people are still being diagnosed with mesothelioma, which is, as we have heard, an extremely unpleasant disease which kills the sufferer within an average of something like 12 months from the date of diagnosis, as the noble Lord, Lord Alton, has said.
Now the Government have decided, according to yesterday’s Independent onSunday, that in a major survey to be undertaken of England’s 23,000 schools to plan a huge refurbishment programme, asbestos is to be ignored because of cost implications. The system-built schools of the 1960s were riddled with amosite brown asbestos sheeting, which is one of the reasons why we have the highest incidence of deaths from mesothelioma in the world. As a result of this possibly illegal exclusion from the survey, compounded by the stripping of funding needed by local authorities to carry out their survey responsibilities under the Control of Asbestos Regulations, instead of the decline in mesothelioma deaths-the noble Lord, Lord Alton, said that that decline was expected to occur from 2012 onwards-as they tail off over the next 40 years, they may continue for the rest of the century.
I urge your Lordships to look at the website of Mesothelioma UK, the resource centre that provides information and support to patients and carers, allowing them to exchange their experiences and thus to cope better with the situation they face. The practice nurse in that organisation, Liz Darlason, told me that in 2004, when she started work at Mesothelioma UK, there were 1,850 new cases, and in 2010 there were 2,500. The idea that all these people sentenced to a lingering death should have to pay towards the legal
30 Jan 2012 : Column 1421
costs of making a claim for compensation is intolerable, and some 400 hostile comments from patients and their families on this provision have been received by the Asbestos Victims Support Groups Forum UK, chaired by the eminent Tony Whitston, who has been mentioned by the noble Lord, Lord Alton, and has briefed many of your Lordships for this debate.
Industrial injury disease benefit payments numbered 3,940 in 2010, of which 3,680 were for asbestos-related illness. More than half of these were mesothelioma cases, and the figure has increased, year on year, for decades. As the noble Lord explained, the reason for this is that mesothelioma can take 40 or 50 years or more to develop after exposure to asbestos, and patients are still succumbing to the disease long after its use was first prohibited in 1985. This disease is fatal on average within 12 months of diagnosis, and only one in four survive for two years or more.
Due to the time that it takes for the disease to emerge, it is sometimes difficult to trace the employer against which a claim is to be lodged; and before 1972, when employers’ liability insurance became compulsory, some 10 per cent of such employers were not insured. Urged on by the All-Party Parliamentary Group on Occupational Safety and Health, the Government at last agreed to set up an employers’ liability insurance bureau, ELIB, analogous to the Motor Insurers’ Bureau that compensates victims of road accidents involving uninsured drivers. The consultation on the proposal closed in May 2010 but the DWP has sat on it since, even though all respondents were in favour of the ELIB. The asbestos victims forum had a meeting with my noble friend Lord Freud to press him to act, and I should be grateful if the Minister could tell your Lordships what needs to be done to get the ELIB under way.
I gather that the Government may be waiting to see what happens in the so-called trigger case in the Supreme Court before deciding on whether the liability of an employer’s insurer to indemnify the insured dates from a sufferer’s exposure to asbestos or the from onset of mesothelioma. The case is likely to be heard in May, and if the next step is primary legislation, it would not be ready for the next Session of Parliament. We could be talking about some time in 2013 before these forgotten victims are able to claim compensation, and those who have already been diagnosed by that time will no doubt be excluded by reason of retrospection.
The typical mesothelioma patient will have been exposed to asbestos in their early adult life. Thirty or 40 years later, they experience shortness of breath and chest pain, and visit their GP. Painkillers or antibiotics may mask the problems, until the GP finally calls for an X-ray, which then confirms a pleural effusion-a build-up of fluid between the layers of tissue that line the lungs and chest cavity. However, this is not an easy disease to diagnose, and several further investigations involving procedures such as thoracentesis-the extraction of fluid from the pleural cavity using a cannula-may be needed before the disease can be confirmed. From then on, chemotherapy is the only treatment that has proven to be effective in ensuring some degree of survival in randomised and controlled trials, although claims are made for surgery combined with chemotherapy and radiation, which is referred to as trimodality
30 Jan 2012 : Column 1422
therapy, among patients with favourable prognostic factors. As the disease takes hold, the patient has to cope with extreme shortness of breath, intractable pain and debility.
Those are the dramatically unpleasant experiences of mesothelioma patients, who know that inevitably they face death within a few months anyway. They are trying to cope with the physical and emotional phenomena of a terminal illness, vividly described in the literature of Macmillan Cancer Support, and your Lordships can imagine the likely frame of mind of such a person trying to put in a claim for compensation. Many have said they would not have incurred the extra worry and anxiety of claiming if the payment of costs had been required at the time, and it is surely unconscionable to dock someone who is terminally ill of up to a quarter of the damages he may be awarded.
Unless these amendments are accepted, the victim will have to pay two separate fees. Initially, there is the after the event insurance, amounting, as the noble Lord said, to an average of £2,300, to indemnify the claimant against having to pay the defendant’s costs if the claim is lost, which up to now has been recoverable from the losing defendant but is now to be deducted from the claimant’s award. Then there is the success fee, the amount of which is to be specified in regulations, understood to be 27.5 per cent of base costs-the cost actually incurred by the solicitor in conducting the claim. This has also been paid by the defendant in the past, but is now to be borne by the claimant. Assuming that the case is a simple one, with base costs of £10,000, the claimant would pay the solicitor £2,750 out of the total sum agreed. The knowledge that he is liable to pay that sum on top of the ATE insurance fee will be enough to deter many terminally ill patients from bothering to pursue their claim.
Suppose the defendant makes an offer that is manifestly inadequate or there are complex issues that can be determined only by the court, one of which happens in just 2 per cent of case-only one in 50 cases goes to trial? The base costs rise steeply, with counsel’s fees and court costs, and a further payment of ATE insurance, many times larger than the original £2,300, which he claimant now has to pay. The premium for one of the claimants in the Sienkiewicz case, decided in the Supreme Court in March 2011, was £219,000, and it is obvious that now the claimant is responsible for ATE, no test case of that kind will ever be taken again.
Another factor that comes into play at that point. The defence solicitor is entitled to 100 per cent of base costs as success fee whichever way the case goes, but the downside from their point of view is that if they lose, they probably get nothing. In the Sienkiewicz case, the solicitors for one of the two parties involved incurred base costs of £300,000 and there was a success fee of the same amount. The success fee is capped under these proposals at 25 per cent of general damages, providing the solicitor with a substantial disincentive to pursue cases in which success is less than certain. There will be a strong temptation for the solicitor to recommend settling for what may be a totally inadequate sum, and the victim, in the last few months of his life and probably enduring severe pain, will not have the strength or the will for a long and traumatic court case.
30 Jan 2012 : Column 1423
None of that is revealed by the Explanatory Memorandum, and I deplore the Government’s failure to spell it out. That means that solicitors will be deterred from pursuing cases where the defendant has even a small chance of winning, and there will be temptation to settle for what may be a totally inadequate offer.
Let us think again about this mean-spirited, callous fine imposed on the victims of mesothelioma, asbestos cancer and other very nasty respiratory diseases. It is wrong to deter people from pursuing claims they have every chance of winning, and immoral to take thousands of pounds from the amounts they win. I shall be very surprised if, now that the facts are out in the open, the Government do not beat a hasty retreat before they suffer a defeat at Report.
Lord Wigley: My Lords, Amendment 137A stands in my name, as well as in the names of the two noble Lords who have already spoken. Back in the 1970s, as a young Member of another place, I was very involved in campaigning on respiratory injury caused by slate dust in the slate quarries in my area. Slate dust, of course, causes a progressive disease similar to asbestosis. I was also involved in the asbestos battle-and I also knew the late Nancy Tait very well-in that I had a Turner & Newall, or Ferodo, factory in my constituency and had constituents who were affected by asbestos. I also gave evidence to the Pearson commission on these matters in the 1970s.
In the debates on this Bill I have already made clear my feelings about how proposals to cut the Ministry of Justice’s budget will have a disproportionately negative effect on individuals who have been injured or disabled. During the debate on Part 1, I argued against removing access to legal aid from those injured due to clinical negligence. My comments today will, for the most part, centre on the legal implications for another group-those injured due to exposure to harmful substances such as asbestos. The case for mesothelioma has been made graphically by the noble Lords, Lord Alton and Lord Avebury, so I shall concentrate on the provisions of the Bill.
Under the proposals in Clause 43, a success fee under a conditional fee arrangement will no longer be recoverable from a losing party in all proceedings. This fee will instead have to be paid for out of the modest damages awarded to the injured person, meaning that they may lose up to 25 per cent of their damages. Clause 45 removes the recoverability of the after-the-event insurance premium from the losing defendant, and this will probably result in this premium also being taken out of the damages awarded to the injured party. To put this in context, an ATE insurance premium for an employer’s liability case, such as for industrial disease, can cost up to £12,000.
Both clauses will have an adverse effect on individuals attempting to bring cases against companies or organisations as a result of an illness or respiratory disease they developed after being exposed to a dangerous substance. For this reason, I support the amendments before us, and perhaps I may set out why I think this is necessary.
30 Jan 2012 : Column 1424
As it stands, the present system, which comprises both conditional fee arrangements and ATE insurance, allows an individual to proceed with a case against a corporation or organisation which has caused them harm without the fear that they will in some way be left worse off after bringing the claim. There is sometimes a feeling that no-win no-fee claims are bogus and encourage mercenary behaviour. This conveniently ignores the fact that many meritorious cases, including those brought by victims of industrial disease such as asbestos poisoning, rely on the no-win no-fee system to access compensation.
I draw to your Lordships’ attention a case brought to my notice by the Access to Justice Action Group involving an industrial disease claim for silicosis. The deceased person was employed in a local quarry. He worked in the vibrating shed and blast shed, where he was exposed to high levels of silica. As a result of this exposure, the deceased developed silicosis and lung cancer. He died due to his illness and a claim was brought by his widow. Initial prospects were put fairly high, at 65 per cent to 75 per cent, with potential damages assessed at over £100,000. The ATE insurer, ARAG, a German company, agreed to provide cover. The initial medical evidence obtained was very supportive, and a subsequent admission of liability was then made subject to medical causation.
The outcome was that despite the initial optimistic prospects for the case and liability being admitted, further medical evidence could not prove the necessary causal link. Based on the expert medical advice, the case had to be abandoned. The disbursements incurred totalled £2,019. ARAG settled these in full. Under the Government’s qualified one-way costs shifting proposals the claimant widow would be responsible for these disbursements, as QOCS makes no provision for the payment of claimants’ disbursements in failed cases and the ATE system will not survive to cover these claims. The net effect is that the widow would not have been able to pursue that case.
It would perhaps be beneficial to remember that accident cases are not limited to those accidents which occur on the roads. If Clause 43 is taken forward without amendment, these victims will no longer have a right to redress for the wrong done to them. Likewise, ATE insurance protects an individual from having to pay the costs of the other side if he or she loses a case. In cases which centre on industrial disease, the other side will usually be a multimillion pound organisation with access to teams of solicitors. ATE insurance also pays for additional expenses, such as medical reports, without which cases alleging illness as a result of exposure to a dangerous substance would flounder at the first hurdle.
If Clause 45 is agreed and the recoverability of ATE insurance is removed, the injured person would face losing a hefty proportion of his or her damages to pay for the premium. Thus, without recoverability, both the uplift required to allow a solicitor to take a case on a conditional fee arrangement, and the ATE premium necessary to pay for the costs risk if the case loses, will be paid from the claimant’s damages. That will inevitably mean that many solicitors will be unwilling to take on cases where the chance of recovering their
30 Jan 2012 : Column 1425
costs is low, without the client having to lose most of their damages. This is particularly pertinent on noting that in lower value cases, the additional liabilities may even exceed the amount of damages awarded. One consequence of people being unable to afford solicitors’ fees will be an increase in litigants in person taking on large corporations which, as well as demoting access to justice, will have an inevitable toll on the courts system. In cases which do proceed, the increased risks for claimants, who will have to pay additional liabilities from damages, will result in a perverse incentive to compromise cases at below full value. This can hardly be said to be promoting access to justice.
It is vital that the present system be kept in place for genuine claimants who have developed illnesses resulting from industrial exposure. I should note that in preparing for this debate I have been assisted by First Assist Legal Expenses, the Association of Personal Injury Lawyers, the Access to Justice Action Group, and by Mr Tony Whitston, to whom the noble Lord, Lord Alton, has already referred. What they all hold in common is a firm view that access to justice should not be barred for those with legitimate grievances who would not otherwise be able to gain the compensation that is due to them.
Cases which involve asbestos poisoning and other industrial disease cases often have more than one defendant and are highly complex. Unsuccessful cases can thus be extremely expensive if there are multiple defendants whose costs would need to be covered if the case is lost. Without a recoverable insurance premium, these cases could not be brought by an individual unless that individual had access to substantial private funds. If an individual is diagnosed with asbestosis, this clearly indicates that they have been in contact with asbestos. Even so, due to the complex nature of these cases in establishing liability, pleural thickening and asbestosis cases attract only modest damages. Most solicitors will not be able to take on the risks involved in these cases without being able to recover the ATE insurance premium. Those suffering from industrial illness thus face being additionally victimised by the justice system.
Equally, and as the Association of Personal Injury Lawyers argues, individuals who are diagnosed with asbestosis are at a greater risk of developing a fatal disease like mesathelioma later in life. Currently, a case for asbestosis must be brought within three years of gaining knowledge of the disease. If a case is not brought within that time frame due to an increased risk of costs, and in the mean time mesothelioma develops, the injured party may well be unable to bring a claim for the disease. He or she would then be denied compensation twice-both for the asbestosis and mesothelioma.
In summary, the reforms proposed in Clauses 43 and 45 would have a disproportionately harmful effect on claimants bringing cases against corporations and organisations as a result of illness incurred after exposure to dangerous substances. The notion that the Government intend to remove the means currently in place that allow individuals to pursue justice in such distressing situations makes a mockery of the principle of equality of arms-a complaint that I brought against the proposals in Part 1 of the Bill. One of the principal reasons that
30 Jan 2012 : Column 1426
the then Government introduced recoverability was so that meritorious cases could be proceeded with without potential claimants having to face undue costs if a complex case were lost. The then Government also recognised that victims having to pay additional liabilities from their damages put them at a disadvantage compared with claimants who were eligible for legal aid. If these reforms are implemented, the system will no longer be able to deliver compensation to individuals whom the law is designed to protect.
There is a related anxiety that without the deterrent of individuals being able to bring claims for compensation, breaches of the law will increase. Most pressingly, the Bill injects yet more uncertainty into cases that are already complex and distressing. Many individuals will not be able to proceed with legitimate claims, regardless of their merits, because they will not be able to find solicitors willing to take on their cases. These groups or individuals have already suffered grave wrongdoing at the hands of others. Surely our legal system should do all it can to redress that wrong rather than put up further barriers to justice for them.
Lord Martin of Springburn: My Lords, I support the amendment and the noble Lords who spoke. My thoughts turn to a lawyer, the late Frank Maguire, who died recently. He was a campaigning lawyer on behalf of asbestos sufferers north of the border. He took on very difficult cases. Many of them were test cases. The important thing for his clients was that he offered a no-win no-fee arrangement. We may be perhaps comfortable in our lives, but it should be remembered that a disease of the lungs creeps up on a person. They feel breathless gradually. They might put it down to smoking or something else around them. Also, because of their shortness of breath, they lose time at work if they are lucky to be employed, so they are not very well off financially by the time they go to see a solicitor. When they see the solicitor, it is a great relief to have a no-win no-fee arrangement.
I was in a room with a constituent who was being questioned by the late Frank Maguire. Frank would go back to a time when they were 15 or sometimes 14. Like a police officer, he would ask about every place of employment where the person had worked. The person suffering from the disease and difficulty had to recall all the places they had worked because-let us face it-an employer is going to deny liability and a lawyer has to ensure that the right person or company is being claimed against. That is not easy with all the closures that have taken place over the past 50 years. Many companies have closed down and others have changed their name. Some companies that have stayed in business have changed their address, so it is hard for a lawyer to track them down. It would be a great help if the Minister would say that in this instance the Government will make sure that they do not create any more difficulties not only for sufferers but for their families.
I did not set out to be an asbestos worker, but these things happen when you go into a factory. As an apprentice metal worker I was expected to drill metal; I made electric heaters. As in the case of the toasters that the noble Lord mentioned, the elements of the electric heaters were wrapped around light asbestos
30 Jan 2012 : Column 1427
board. When I was 16, my boss used to instruct me to cut and drill the asbestos. There were many young women in the factory who drilled the asbestos. In fact, because it was white board instead of metal that was covered in oil that got on your denims, you quite liked this white powder that you could just wipe off, not realising the dangers involved. The relatives come into this because in those days, you did not send your clothes off to the laundry, mum did the washing. In some cases, there could be two or three daughters in one family working with that asbestos and going home. Their mum was exposed to the asbestos. Then if mum was ever feeling breathless, a good doctor-there are many good doctors around-would probably ask a man where he worked before he retired and if he said he worked in the shipyard there might be a possibility that he was using asbestos that was the cause of the breathlessness, but for a mother, a housewife, it might not dawn on the doctor that she had any contact with asbestos. That makes it all the harder for the lawyer to fight the case when it finally comes.
I am proud of the fact that a company in my constituency went from asbestos board to non-asbestos board. It did a lot of research because it knew the dangers. The boards were used for fire prevention in buildings. It decided to get the non-asbestos board which would not be harmful to workers, but at the time that it was producing that board, in Poland, the shipyards in Gdansk were receiving orders from that company and from other parts of the United Kingdom where asbestos board was going from here to Poland. The Polish workers-that was before Lech Walesa became the president-were having to work with asbestos boards in those shipyards. The reason I mention that point is that it might be the case that some of those old ships would come into repair yards in the United Kingdom, and it is not until they start to do repairs that the workers discover that they are being exposed to asbestos. In fact, even in this building, where the heating system is very old-in fact, I would say this evening that it is non-existent-if any repair has to be done in the basements, it would probably be the case that they would come across asbestos substances. The point I am trying to make is that some people know that they are going to work with asbestos. Other people, when they go out to a day’s work, do not know that they are going to work with asbestos, but before the day is out, that is what is going to happen.
Lord Thomas of Gresford: My Lords, I am glad to follow the noble Lord, Lord Martin, in what he has just said because I am concerned about the relatives of the victims of this terrible disease. We were addressed here in one of the committee rooms in the House by the Greater Manchester Asbestos Victims Support Group. One of the people who came with that group was Mrs Marie Hughes, who comes from my home town of Wrexham in north Wales. Her husband had worked as a youth in the Brymbo steel works, which is close to the town, but had gone into teaching and died of this disease at the age of 57 when he was head teacher. It had afflicted him a great deal later. I am
30 Jan 2012 : Column 1428
very familiar with the Brymbo steel works, as was, because I worked there briefly during vacations as a young man.
What she told us about the effect of the disease upon her husband was that while attempting to come to terms with his diagnosis and his bleak prognosis he underwent gruelling, unrelenting and debilitating courses of chemotherapy, intensive radiotherapy and invasive surgery in the form of an extrapleural pneumonectomy, which involved the removal of a complete lung, half the pericardium and half the diaphragm in a desperate effort to delay the cancer’s ultimate grasp. He lived in constant pain and it was a vain attempt to improve the quality and extend his life. By the final three months, tumours had also developed on his spine, resulting in paralysis from the chest down, and all this while fighting to breathe. That is the effect of this disease on an individual who suffers it, years after he had been exposed to asbestos. Of course, from diagnosis to death is quite a limited period with mesothelioma: it is only about nine months, leaving behind a widow and a family who have to live with what has happened to their loved one.
I am very much in support of the amendment that the noble Lord, Lord Alton, has moved with such great force, and the supporting speeches, because I have seen the effect on a widow of this terrible disease.
Lord Bach: My Lords, I am proud to have been allowed to put my name, as an opposition Front-Bencher, on this amendment, which has been moved so well by the noble Lord, Lord Alton, and spoken to so well by all the other noble Lords.
Industrial disease and exposure to toxic substances; employers acting negligently, in breach of their duty to employees, and often causing them great harm; and then outlawing and ensuring redress for these violations speak to what I consider the historic mission of the party I belong to and of the trade union movement. I know they are subjects that are of huge interest and concern to many people beyond that.
Health and safety in the workplace is something that we in these Houses of Parliament should be as proud of as we were of banning slavery. Instead, this year the Prime Minister chose for his first speech a comment that hoped that this was the year that killed off the health and safety culture forever. He cited a case where a teacher made children wear safety glasses to play conkers-a myth that the Health and Safety Executive cites as a prime example of the kind of mischief played by some to denigrate health and safety.
Health and safety in the workplace has nothing to do with conkers. Lack of health and safety has led to tens of thousands of avoidable deaths in the workplace. These amendments would ensure that in these cases-they have been described in detail and I am not going to go into that detail-employers pay their full redress and employees who have been harmed get their full restitution.
These are serious cases. There is no compensation culture here. Whereas motor claims increased by 43 per cent between 2007 and 2011 to nearly 800,000-which is why we on this side back my right honourable friend Jack Straw’s campaign-employer liability claims were down by 6.6 per cent to one-tenth of that. No-one is
30 Jan 2012 : Column 1429
faking mesothelioma, or coal lung. This is as far from the problems of undiagnosable whiplash as we can possibly get.
Industrial disease provides the most emotive and powerful examples of how health and safety is something we have had-and still have-to fight for. Despite the fact that we know so much about the clinical aspects and the impact on individuals, communities, and families, asbestosis is still being fought over in the courts. Insurers, sometimes not to their credit, are still fighting liabilities. Why is there this difference between these highly contested, difficult-to-prove cases that we have been debating tonight, for which people have been fighting year after year and, on the other side, clinical negligence? Why is there no sympathy from the Government for what are pretty analogous cases?
Do they not deserve a deeper consideration of the economics of bringing these cases? If the argument is proportionality, of course there are problems with proportionality when you are fighting some of the entrenched vested interests, such as the insurance lobby, and companies for which it is difficult to prove ownership and liability years after the event. We are at risk of abandoning these cases and these victims, not because they cannot bring the cases any more, but because they will not find lawyers to bring them. These are families and widows of workers who were exposed through no fault of their own.
I have in front of me the comments of a lady, Mrs King, whose husband died of mesothelioma. She says, “My husband died of mesothelioma as a consequence of asbestos exposure during the course of his employment. David and I received considerable assistance from the Derbyshire asbestos support group”. She arranged to see her constituency Member of Parliament. She received letters from her Member of Parliament, and wrote to him as well. I have to say that that Member of Parliament showed real concern in those letters about the tragedy that she had undergone. I pay tribute to him for the sympathy which he genuinely showed.
However, the exchange of correspondence, in Mrs King’s view, raised a number of points. The first was that the Member of Parliament seemed to accept that, in certain aspects, we are going to an American-style system. Mrs King’s view is that is not a good thing. That relates to a successful claimant having to pay some of their damages in costs. Secondly, the Member of Parliament, according to Mrs King, said that if a claimant loses the claim he will pay no legal costs at all. She points out that that is wrong: the losing claimant would pay disbursements. Thirdly, the Member of Parliament says it is not about whether claims will be brought, but about what lawyers get paid, and who pays those costs. Mrs King’s comment is that there must surely be genuine borderline cases today that will not be brought tomorrow because lawyers will not take the risk of not being paid.
Fourthly, Mrs King comments that the Member of Parliament says that defendants with a very strong defence pay out because of the costs they may incur if they lose. Mrs King does not understand that. She asks why they would settle in a case where they have a strong defence: if they have a strong defence, they will
30 Jan 2012 : Column 1430
not lose. Lastly, the MP says that he may be cynical, but lawyers will not bring cases because they will not be paid as much as they are now. Mrs King thinks that that misses the point, the point being that lawyers will not bring cases at all if they run the risk in difficult, but genuine, cases that, if they lose, they will not get paid at all.
The Member of Parliament is in fact the right honourable gentleman the Lord Chancellor. As I say, he showed great sympathy for Mrs King and her predicament, but those were his responses and I suggest, respectfully, to him and to the Minister, that they are out of touch and do not meet the seriousness of the situation that has been described in Committee tonight.
Mrs King finishes by saying, “The chances of people like me or my husband being able to get justice would all change under the Government’s proposals. Even if my case has reasonable chances of success, I will struggle to find a lawyer to take it on unless it is virtually certain to succeed. The lawyers think the risk of losing is too great for the amount they will get paid for taking that risk. They simply will not take the case on”. That is the nub of this particular argument: people who have suffered a great deal will find that they will not be able to have their cases argued because of changes that are made. What I think that everyone who has spoken in this debate so far wants to see from the Government is a bit of flexibility, because these cases really stand out on their own.
The Minister of State, Ministry of Justice (Lord McNally): My Lords, it is a long time since I pointed out that we had a whole series of amendments, each taking a different aspect of the Bill’s architecture, suggesting that on this case the Government should make an exception. Of course, had we conceded all afternoon, nothing would be left of the Government’s architecture. I listened to what the noble Lord, Lord Bach, has said and sometimes I feel that he is a little harsh on the legal profession. I cannot believe that lawyers would be so unwilling to take cases in the circumstances of what will be left in place after the Bill becomes law.
Let me make one personal point about mesothelioma. My sister Betty died of this disease. I do not need to hear the graphic descriptions that have been used in this House because I saw it with her. The family did not decide to take legal action, although undoubtedly she worked with asbestos two times in her life. Some 50 years ago she worked in an ICI plant. She also worked in what were then the asbestos-constructed Ministry of Pensions’ prefabs at Norcross. But the chance of providing proof in either case was very vague. Quite frankly, the family felt that no amount of litigation, proof or anything else would bring Betty back. She was dead. But that was a personal decision of the family.
Part of this debate turns on our industrial heritage and cleaning up the mess. Of course, I agree entirely with what the noble Lord, Lord Bach, said, and I see the noble Lord, Lord Monks. The Health and Safety at Work Act is about this issue and workers working in dangerous and dirty conditions. I was born on an ICI
30 Jan 2012 : Column 1431
estate and I sometimes shudder at the thought of what went on as normal practice in chemical factories 40 to 50 years ago. Certainly, these cases are extremely difficult.
Before we put too much faith in lawyers, I was very proud to be involved in the Labour Government who gave the miners compensation. But, my God, was there not some abuse of that by the lawyers?
Lord Martin of Springburn: I know that the hour is late. There might have been abuse from lawyers but there was no abuse from the victims.
Lord McNally: I never said that there was. But I can say to the noble Lord, Lord Alton, that I am quite sure that the insurance industry has been lobbying on this Bill. However, I can also tell him that the lawyers have not been too bad at lobbying either.
Lord Alton of Liverpool: I have no brief from either the insurance industry or from lawyers. I simply make the point that this is not about money from the public purse or money being abused by this or that group. This is treading dangerously close again to the arguments about people manipulating or misusing the system, or claiming compensation to which they are not entitled. Surely the noble Lord would agree that, because of the very moving personal circumstances which he described, and as the noble Lord, Lord Bach, has said, no one can fake these circumstances where mesothelioma is involved.
Lord McNally: I am not treading anywhere near that. I am saying that we are trying to bring a structure to the civil side that squeezes out of the process what has been considered by the senior judiciary, and by Lord Justice Jackson when he looked at the issue, to be an inflationary element of the process. Listening to some speeches, it sounds as though conditional fee agreements would not be possible; they will be. It also sounds as though 25 per cent of the compensation has to go on the success fee. It is entirely discretionary. Lawyers could refuse to take a success fee. In fact, I think it was my noble friend Lord Thomas who said earlier that we may well find that lawyers make a selling point of not taking success fees. This is not a hard, uncaring Government picking out difficult cases. They will go ahead and they will be won. The Government are ready to take steps to try to help people in this area.
In April 2011, supported by the Government, the insurance industry set up the Employers’ Liability Tracing Office. ELTO provides an online resource through which claimants and their representatives can search for the relevant policy, reducing the time and costs that are often involved in such searches. This difficulty was referred to earlier: namely, the difficulty of identifying and finding the employer’s insurer. ELTO provides claimants with access to an electronic database of EL policies through an online inquiry facility, substantially enhancing the previous tracing service that relied on insurers checking against their own policy records.
30 Jan 2012 : Column 1432
With effect from 1 April 2011, the Financial Services Authority introduced rules requiring an EL insurer to publish tracing information for all newly issued or renewed EL policies, and for old policies on which new claims are made. Insurers may use ELTO to satisfy their own requirements or publish details on their websites. To date, more than 98 per cent of the active EL insurance market has joined ELTO, as have a large number of insurers in run-off who are not covering current employment but are still liable or potentially liable for past cover. Most of the tracing information for new policies and some historical policies is readily accessible on the ELTO central database.
The FSA is continuing actively to consider how best to address the issue of other historical policies. Some insurers have voluntarily included additional historical policies on the ELTO database. The answer is unlikely to be as simple as requiring details of all historical policies to be put on the database, as these are not always readily available, especially when searching archives from over 10 years ago. While ELTO will ensure that in the future more people can obtain civil damages for industrial diseases, it may still be very difficult to trace historical policies, especially for those individuals suffering from long-tail diseases such as mesothelioma. We understand the urgency of the situation in which injured people, after all other avenues have been exhausted, are still unable to find an insurer to claim against, and we are working hard to see what can be done for them. We are still working closely with all stakeholders to see what can be done to compensate people with mesothelioma who are unable to claim civil damages because their employer no longer exists and their EL insurer cannot be found.
If, for any reason, someone who contracts mesothelioma is unable to bring a civil claim because they cannot trace their employer or the relevant employers’ liability insurance policy, a number of other possible routes of redress are available through state schemes operated by the Department for Work and Pensions. I take the point made by my noble friend Lord Avebury about the discussions going on at the DWP. The department is continuing to work with stakeholders to see what can be done to compensate people with mesothelioma and similar conditions who are unable to claim civil damages because their employer no longer exists and the employers’ liability insurance policy cannot be found. In the light of this, I am not persuaded-
Lord Wigley: Is the Minister considering using the 1979 Act, which was set up for cases where it was impossible to find the previous employer, as a basis for a formula of compensation, or is that not practical?
Lord McNally: I would have to take advice on that. On that and the point raised by the noble Lord, Lord Avebury, I shall write to the noble Lords, as well as those who have taken part in this debate, to update them on where discussions in DWP have reached.
It is very difficult to overestimate the personal damage suffered by the individuals who have been highlighted. The Government are trying to reform the civil legal system in a way that retains access to justice.
30 Jan 2012 : Column 1433
It was said that litigants would be responsible for defendants’ costs if they lost; this is not true. QOCS will apply in this kind of case, so that litigants will not be susceptible to defendants’ costs.
It is a difficult area, but our overarching aim is to create an architecture which squeezes inflationary costs out of the civil justice system. Without our reforms, high and disproportionate costs in civil litigation will continue.
Lord Bach: I was not claiming that losing claimants would have to pay winning defendants’ costs-I accept that QOCS would come into consideration; I was saying that a losing claimant would have to pay their own disbursements in those circumstances, which is a different issue. That was the point that I was trying to make.
Lord McNally: I take that point.
I think that I have said all that I am going to say on this. It is a tough case, but it would be just another concession within the range of issues that we have discussed today. The noble Lord, Lord Bach, almost gave the game away in saying, “Well, you’ve made the clinical negligence concession; why can’t you make this concession?” It would then be another, and then another, and then another, and Jackson would disappear.
Lord Bach: The two situations are pretty analogous, so will the Minister please answer his own question? Why cannot he do the same for this as he did for clinical negligence?
Lord McNally: My Lords, I do not think that it is analogous. The other actions that the Government are taking address some of the issues that have been raised tonight. We are exploring other initiatives that we can take. I do not think that it is necessary, therefore, to make the exception that is being argued for. It is admittedly being argued for very powerfully, but it is not enough to convince the Government.
Lord Pannick: Does the Minister seriously dispute that the provisions in the Bill will at least to some extent damage the ability of claimants in this area to obtain legal advice and assistance and will make it more expensive for them to do so? If he does not, is it really fair to impose these provisions?
Lord McNally: I do not know how lawyers will behave. I hope that they will behave a lot better than in some of the worst-case scenarios. People who go into litigation, even in cases like this, will to a certain extent be taking risks. If one were to listen to the arguments put by the noble Lord, we would have a legal aid system that paid for everything, and we cannot afford it. Therefore, we are trying to create with limited resources one that is fair. Of course, with his eloquence and ingenuity, the noble Lord can always pitch questions to me that make it sound as though I am saying, “No, let them eat cake”, which is certainly not our intention.
30 Jan 2012 : Column 1434
Lord Pannick: However, we are concerned here not with the expenditure of public funds but with a fair allocation of risks as between the defendant and the claimant. With respect, I do not understand the noble Lord’s point in relation to that. Is it really right that the interests of this group of claimants should depend upon the Government’s inability to predict how lawyers are going to behave? Surely this should not depend on how lawyers behave.
Lord McNally: This is not only about public funds, but it is about how you create-to use this term again-an architecture for this type of litigation that squeezes out from the system the inflation that went to the lawyers. That was identified by the Master of the Rolls, by the Lord Chief Justice and by Lord Justice Jackson. In trying to respond to that problem, I am fully aware of the hard cases, and I have spent most of the afternoon dealing with them. Of course hard cases are difficult to argue, but that is the central issue that we are trying to address. To succeed, we will have to stand firm against some of these hard cases, I am afraid.
Lord Thomas of Gresford: The issue really is this: should all cases be treated alike? Well, Lord Justice Jackson did not treat all types of litigation alike. For example, he specifically recommended that clinical negligence should stay within legal aid, for various reasons that we have gone through that I do not need to repeat. Nor did he suggest that all his proposals should be limited to personal injury cases; he thought that they should be broader but they could vary, depending on the particular circumstances.
The reason for that is that risk varies. For road traffic accidents, nine out of 10 cases will be won because it is fairly easy to determine in a road traffic accident who is at fault, to what degree and so on, and the quantum follows thereafter. In clinical negligence cases, three out of four cases will be lost, so the risk is very different. That is why Lord Justice Jackson decided that clinical negligence should remain within the scope of legal aid. We are not involving government money or public money here; what we are trying to discuss is what constitutes a fair balance in a particular category of case, which can vary from case to case. I do not think that we should approach this on the basis that there is an architecture that should apply to every particular type of claim that is ever brought.
In mesothelioma cases, for example, we are not so much concerned with the fact that the person has the disease; what we are concerned with, as the noble Lord will appreciate from the very moving story that he told about his own family, is causation. That is the issue in this type of case. You can easily show that someone has died as a result of this disease, but what caused it, when, how and whether the case has been brought within a reasonable period of time are at issue. Very often, that requires not the sort of expenditure on medical reports that you get in clinical negligence cases; it often depends on expert reports on where the asbestos was, how it was dealt with and whether there was a likelihood, which passes the threshold of more
30 Jan 2012 : Column 1435
likely than not, that that particular presence of asbestos in the workplace at a particular time caused the disease from which, as in the case that I cited, many years later the particular individual dies. We can therefore see that in some cases it is a medical issue, while in some cases it is causation, but they differ-and it is quite legitimate for the Committee to consider the different type of case, as we have in our discussion of judicial review, for example. In our debate on the next set of amendments, I shall come on to the question of environmental law, where very different issues arise compared with other types of litigation. We are not looking for an architecture to involve everything; we are looking for what is right in a particular category of cases. I propose in a moment, when this amendment will I hope be withdrawn, to enlighten your Lordships a little about environmental law.
Lord Alton of Liverpool: My Lords, in his peroration the Minister relied on the phrase “squeezing inflationary costs out of the system”-a point to which the noble Lord, Lord Thomas, referred. The only people who will be squeezed as a result of this are those who suffered previously and who have fatal diseases. I cannot see the argument that the Minister put before the Committee this evening in the terms in which he has expressed it. As he implied at the end of his remarks, this is not about legal aid or public money; on the point about causation that the noble Lord referred to a moment ago, this is about people’s right to have access to the justice system, and not then to have to hand over any damages that they win. This is about people who have demonstrated successfully in the courts that they have become victims and who then have to hand over a quarter of the damages that they receive to pay for the action that they have been able to bring successfully.
The Minister showed enormous sensitivity to this issue as he described his own family circumstances to the Committee. When he reads the debate further overnight, he may want to reflect on some of the points that have been made. He was accused earlier of not showing flexibility. I understand the pressures placed on any Minister having to oversee a Bill of this kind, but we are only in Committee. I hope that he will share with his right honourable friend the Lord Chancellor the debate tonight and will look particularly at the questions raised earlier on by me and others about the costs involved to the public purse in not accepting these amendments. The reverse arithmetic and accounting to that which he has advanced at the Dispatch Box this evening would seem to apply, and in his refutation of the argument he did not deal with that point.
The Minister also implied that all lawyers would somehow be winners-that they would be the ones putting the inflationary pressures into the system. I remind him of the case that I cited today and at Second Reading of Norman Jones, the president of
30 Jan 2012 : Column 1436
the Liverpool Law Society. This is a lawyer who is not part of a huge legal practice; he made it clear that under this dispensation it would be impossible for him to have fought the case that he successfully brought with CFAs through all the courts, right up to the Supreme Court. He would not have been able to bring that case. It is because of cases of that kind and the adverse effects on the victims as well that the Minister should reflect on this matter before Report.
During the debate, we have heard invoked the names of victims. Mrs King was mentioned by the noble Lord, Lord Bach, Marie Hughes by the noble Lord, Lord Thomas, and the Minister mentioned Betty, a member of his family. We have heard also of good lawyers; the noble Lord, Lord Martin, mentioned Frank McGuire, and vividly described his own experiences on the factory floor. We have heard about campaigners. The noble Lord, Lord Avebury, who has battled on this subject since the 1970s, and the noble Lord, Lord Wigley, both referred to Nancy Tait.
The noble Lord, Lord Bach, said to us that employers should have to make full redress and employees full restitution. He said that no one is faking mesothelioma. He also reminded us of the canards of the so-called health and safety culture, and of the compensation culture. The noble Lord, Lord Wigley, said that access to justice should not be the preserve of a few.
It is worth remembering that the mesothelioma death rate in this country is the highest in the world. That is why I do not think that the noble Lord, Lord Avebury, was overstating the case when he said that what we are doing is intolerable. He said that it is unconscionable, mean-spirited, callous and immoral. Although it is my intention now to withdraw this amendment, I give notice that it is also my intention to return with these amendments on Report if we are unable to make progress on this issue. With the leave of the Committee, I beg leave to withdraw the amendment.
Amendment 137A withdrawn.
Clause 43 agreed.
Amendments 137B and 137C not moved.
Clause 44 agreed.
Amendment 137D not moved.
Clause 45 : Recovery of insurance premiums by way of costs
Amendments 138 to 140 not moved.
House adjourned at 10.27 pm.