David Taylor (North West Leicestershire, Labour)

With this it will be convenient to take new clause 21—Provision of information by employers—

‘After subsection 23(5) of the Social Security (Recovery of Benefits) Act 1997 (c.27) insert—

“(5A) Employers, corporate bodies or individuals whose activities have resulted in the exposure of people to asbestos fibres, shall be under a duty to take all reasonable steps to provide timely details of their insurers.

(5B) Such insurers shall have a duty to respond to claims enquiries in a timely manner. The Secretary of State shall make provision by regulation to levy charges where, in his opinion, there has been unreasonable delay in the provision of such information.”.’

Andrew Selous (Shadow Minister, Work & Pensions; South West Bedfordshire, Conservative)

Clause 49 is extremely important and deals with how the money will be provided for the lump sum payments that the Department will pay out up  front. If Committee members read clause 49 in full, they will see that lump sum payments that are paid out promptly—within six weeks, we hope, of diagnosis—are to be recovered from subsequent compensation payments made either by solvent employers or by insurers, should those employers choose to claim against their insurance policies or should the employer have become insolvent. It is an extremely important aspect of the Bill.

I shall refer briefly to remarks that the Minister made in an earlier debate. I think she said words along the lines of, “We do not have enough money to pay everyone.” I may have misquoted her slightly, but it was something similar.

Anne McGuire (Parliamentary Under-Secretary (Minister for Disabled People), Department for Work and Pensions; Stirling, Labour)

To clarify that for the hon. Gentleman, the remarks were about opening up the compensation scheme to people who lived and were resident in other countries. If that was not clear, I hope that I have made it clear now.

Andrew Selous (Shadow Minister, Work & Pensions; South West Bedfordshire, Conservative)

I thank the Minister for that clarification; I had slightly misunderstood her, so I apologise.

It is none the less important that we understand the mechanism that the Government use—absolutely rightly—in the clause. It involves using the compensation payments from solvent employers and their insurers, or from the insurers of insolvent employers, to compensate the Department—quite rightly—for the money that it pays out quickly up front, and about which we are all pleased.

New clause 21 is part of my attempts to be helpful, and I hope that the Minister will recognise its spirit and intention. It would have two benefits. It would benefit the sufferers of mesothelioma, because when an amount greater than the lump sum payment is payable by the employer or by their insurer, the new clause would speed up the compensation payment process. If there were any excess over and above the lump sum, it would get it to the sufferer more quickly. At the same time, it would come to the aid of the poor, beleaguered public purse—the finances of the Department for which the Minister is responsible—because it deals with the mechanism whereby the Department gets back the money for paying out the lump sum.

In a news release from the Department on 20 July 2006, no less a person than the former Secretary of State said:

“We are also continuing the essential work that is ongoing to speed up the full compensation payments due to many sufferers and their families through the civil claims process”.

Those words were very welcome and important, but it is not clear whether the Bill includes anything to aid that process. The new clause would give the Secretary of State the reserve power, when in his or her opinion employers or insurers were dragging their feet and not responding, to make a charge on them to ensure that they responded in a timely manner to inquiries.

The new clause was tabled in part because of my constituency experience, which I am sure is mirrored by that of other Committee members who have found employers and insurers incredibly slow and unresponsive when dealing with such claims, whether they are for mesothelioma or for similar issues. It gives  me no pleasure to say that, because my background is in insurance. Before I came into the House, I was a chartered insurer, and I am generally extremely proud of the British insurance industry. It makes a major contribution to our balance of payments and the public purse, and it does a tremendous amount of good throughout the world. I spoke to the Association of British Insurers before tabling the new clause, and I know that it, too, seeks to guard the good reputation of the insurance industry.

I hope that the Minister will look sympathetically at the new clause. My experience as a constituency MP is that it is almost impossible to get movement on some cases. We know that the former Secretary of State was exercised about such matters. The new clause gives the Department a stick with which to prod or cajole employers or insurers as and when necessary.

Michael Clapham (Barnsley West & Penistone, Labour)

I raise two points on clause 49, in particular in relation to subsections (3)(a) and (3)(b) of proposed new section 1A. Some of the responses that I received from the Association of Personal Injury Lawyers relate to the recouping under subsection (3)(a) of compensation paid to dependants of the deceased. The association points out a conflict with the Fatal Accidents Act 1976, saying that when assessing damages in respect of a person’s death under that Act certain other benefits are disregarded. It feels that in cases of mesothelioma we should also disregard the recouping of payments made to dependants.

My second point is about proposed new subsection (3)(b), under which recovery can be made from the injured person’s compensation. It can result in the entire payment being recouped. In a previous life, I heard of cases in which recoupment resulted in the special damage element being completely taken, but never has it taken any of the general damage element. It is possible under proposed new paragraph (b) that money could be recouped from general damages—payment for pain and suffering. Again, there is a conflict with the civil law.

There is a chance that we may give impetus to challenges in the civil courts on the basis that some schemes, particularly this one, allow for general damages to be recouped. Until now, they have been sacrosanct. Will the Minister reflect on that? We do not want to create a situation in which general damages that are normally ring-fenced in civil litigation are likely to be taken. That would be the thin end of the wedge, and it is likely to be challenged. Reflection is needed.

One other point relates to the amendments that the Government are thinking of making to the Social Security (Recovery of Benefits) Act 1977 in relation to proposed new subsection (3)(e). They say that they want to be able to review certificates of lump sum payments in a similar way to certificates for recoverable benefits. They also say that they want to recover lump sums from compensation when a claimant receives any of several prescribed payments. One of those is payments made under the 1974 coal workers’ pneumoconiosis scheme. I am aware that there will be circumstances in which a person may have two claims. A person who can claim under the 1974 scheme may be  able to claim also under the 1979 scheme. That has been the situation since the demise of British Coal in 2004.

A person who makes a claim under the 1974 scheme before making another under the 1979 scheme is precluded from using the 1979 Act on the grounds of being in receipt of compensation. One of the provisions of the 1979 Act is that a person who has received compensation cannot claim under that Act. There is a procedure to follow in making both claims: a pneumoconiotic must claim under the 1979 Act before claiming under the 1974 scheme, to get both payments.

My concern is about the circumstances in which payments will be reclaimed under the 1974 scheme. For example, I can envisage that a dependant of a deceased person who did not make a claim during his life might make a claim under the 1974 scheme, and at the same time have a claim under the 1979 scheme—the new 1979 scheme, which we are talking about. That would occur because mesothelioma is a cancer caused by asbestos and asbestosis is a form of pneumoconiosis. It is defined under the 1974 scheme. A miner, for example, can claim under the 1974 scheme if he has developed an asbestos-induced disease; at the same time, as I have said, since 2004 the same miner has been able to claim under the more recent scheme.

I can see that a situation might arise in which a dependant would make both possible claims. Is it in such a circumstance that the Minister envisages recouping the 1974 payment, rather than in a living case? I should have thought that the matter moves outside the relevant scope when we relate the Act in question to a living case. She will know of moves that are, I understand, afoot to review the whole of the pneumoconiosis scheme. I do not know whether that will happen sooner or later, but will she clarify the circumstances in which we shall recoup 1974 pneumoconiosis scheme payments?

Tim Boswell (Daventry, Conservative)

I was going to echo the hon. Gentleman’s points in connection with representations submitted by APIL. The main guiding principle should be that whatever is contemplated, it should not strike differentially between the two different arrangements; it should be on the same basis as the civil compensation scheme, both in relation to the treatment of dependants and in relation to any recovery, or non-recovery, of general damages. I think that that is a good principle, so I shall not go on about it.

I should like to say a word or two in support of the new clause tabled by my hon. Friend the Member for South-West Bedfordshire about information. It is clearly important, and, when I looked into the matter in detail, I found that a number of employers clearly did not have particularly good employment records, and several insurers, no doubt for their own reasons—it may or may not have been intentional—did not have very good records of coverage either.

That can also affect what might, in shorthand, be called compliant employers, or compliant employer liability insurers. One of my worries when the Government moved, in effect, to say that they would reverse the court judgment and make any insurer liable for its part in the scheme, was that if only one employer, and possibly only one employer liability  insurer, could be identified—even if that employer had employed the person who contracted the disease for only a week in a career of 40 years, and even if the illness was not directly attributable to that week—it could in principle be liable for the whole quantum of compensation.

I am not clear about what stage that proposal is at now, but it would be very inequitable if that state of affairs came about, and no one in the Committee wants to create a situation of inequity. It is clearly right that all the insurers that are involved over a person’s career should be engaged and should take their proportionate share of the liability, if that is possible—or at least broadly so. Perhaps the Minister can respond to my hon. Friend’s concerns, which are set out well in his new clause, and give us a slightly more general appreciation of the problem, which has troubled me for a number of years.

Andrew Selous (Shadow Minister, Work & Pensions; South West Bedfordshire, Conservative)

As always, my hon. Friend is absolutely right. There is a large issue in respect of incomplete or poor record keeping and an issue about someone who has a work history over many years, with perhaps one employer or one insurer being asked to take an unfair burden in contrast with their share of responsibility.

New clause 21 does not really deal with either of those issues; it would give the Department—the Secretary of State—a reserve power where it is clear who the employer was. I have a constituency case where a gentleman worked for 35 years for one employer, knee-deep in asbestos, and he cannot get past his employer to get on to his insurer. That offends me hugely and it offends a profession that I was proud to be part of before I came into the House.

David Taylor (North West Leicestershire, Labour)

Order. That is a rather long intervention.

Andrew Selous (Shadow Minister, Work & Pensions; South West Bedfordshire, Conservative)

Thank you, Mr. Taylor. I take your point. I hope that I have clarified things.

Tim Boswell (Daventry, Conservative)

My hon. Friend’s clarification is useful. There are both specific and, if I may say so in the terms of earlier remarks, general issues of concern about ensuring that the burdens fall where they properly should and that delinquent employers and/or insurers—they may not be all of them or any of them—should be identified wherever possible and encouraged to pay their proper share of the burden. Perhaps the Minister will enlighten us on how she is getting on with that.

Anne McGuire (Parliamentary Under-Secretary (Minister for Disabled People), Department for Work and Pensions; Stirling, Labour)

I thank hon. Members for a complicated and detailed discussion. On pulling out the detail, we will hopefully have a greater understanding of the Bill and where we are going with it.

I thank the hon. Member for South-West Bedfordshire, whose new clause was tabled in a spirit of opening up the dialogue about how we speed up compensation and pursue claims through the normal compensation process in the courts, if that is necessary. I think that all of us would agree that civil compensation can be a pretty  long process, because there are so many arguments to consider. The key thing in terms of the process is to get the decision right.

We are trying to streamline the process, especially for those suffering with mesothelioma. The new scheme is, as I have said on previous occasions this morning, designed to get some funds quickly at the point of diagnosis of mesothelioma, or as near to it as possible. In relation to the civil claims for compensation—the hon. Gentleman highlighted this—the civil procedure rules, the practice directions and the pre-action protocols prescribe the time scales within which actions must be carried out, so there is already a process in place. The court can currently apply sanctions where those procedures are not complied with. It would not be appropriate for the Secretary of State to levy charges in these circumstances. I appreciate that the hon. Gentleman has tabled the new clause in the spirit of trying to encourage greater speediness in dealing with relevant cases, but it would not be appropriate to levy charges.

Both insurers and personal injury lawyers have been helpful in looking at ways in which we can speed up some of the processes, particularly in relation to mesothelioma. I fully understand that there is frustration when cases seem to take for ever, but although the hon. Gentleman has tabled his new clause in the spirit of being helpful, I am not sure that that would have the desired result and I urge him to ask leave to withdraw it.

My hon. Friend asked about the recovery of payments under the 1979 Act and the new mesothelioma scheme. As he recognises, the lump sum payments are made in lieu of compensation. We want the compensators to be able to deduct the amount of the lump sum payment that they are required to repay to the Department for Work and Pensions from any part of the compensation award, including general damages, which are highlighted specifically for pain and suffering.

If we attach the lump sum payment to a particular head of damage, the sufferers or their dependants could be doubly compensated and, as we made clear earlier and has been accepted by all sides, we do not want double compensation to be possible. There are no plans for recoverable benefits to be recovered from the general heads of damages.

My hon. Friend asked also about payments under the 1979 Act and the new mesothelioma scheme being paid to dependants, and whether they would be subject to compensation recovery. Payments made directly to dependants will be subject to compensation recovery from awards made to them under the Fatal Accidents Act 1976. Again, there are no plans for recoverable benefits paid to the person with mesothelioma to be recovered from the dependant or from the compensation awarded to the dependant under that Act. I hope that I have addressed his concern.

Mark Harper (Shadow Minister, Work & Pensions; Forest of Dean, Conservative)

Given that we are looking at several interactions, may I take the Minister back to her remarks about the armed forces compensation scheme and war pensions? She mentioned that, under the war pensions scheme, there was no time limit on claims. Under the armed forces compensation scheme, there is,  of course, a five-year time limit on claims, although there is provision for dealing with late onset diseases. Will she confirm that mesothelioma would be captured under that scheme and will she ensure that it would not fall foul of the five-year time limit for claims?

Anne McGuire (Parliamentary Under-Secretary (Minister for Disabled People), Department for Work and Pensions; Stirling, Labour)

I shall be pleased to come back to the hon. Gentleman with confirmation or otherwise of that specific point, which was slightly to the side of the discussion.

My hon. Friend also highlighted the coal workers pneumoconiosis scheme payments in respect of the compensation recovery scheme. I hope that the Committee will forgive me if I go into some detail on that. It is our intention only to recover the 1979 Act payments on new scheme payments from subsequent awards made to a person under the coal workers’ pneumoconiosis scheme. That is to stop a person being compensated twice for the same condition: from the Department for Work and Pensions under the 1970s legislation or the new scheme and from the Department for Business, Enterprise and Reform—previously the Department of Trade and Industry—under the CWPS. We do not intend to recover any social security benefits that a person may receive from the CWPS awards.

As my hon. Friend might be aware, earlier this year BER received a challenge from claimants’ representatives to the action of denying claims to the CWPS when it was understood that a compensation payment for pneumoconiosis had already been made under the 1979 Act. BER’s view was that paying under both schemes would effectively be compensating claimants doubly for the same condition. Later this year, following legal advice, it was decided that it must pay compensation to the CWPS in such cases. As my hon. Friend is well aware, the 1979 Act was, in fact, never intended for miners as they had their own compensation scheme on which that Act was based. They only became entitled to a claim under the legislation when the British Coal Corporation was dissolved in March 2004. I hope that I have dealt with some of the issues raised. I advise the Committee that, since June when BER started to pay out the claims, it has only received a couple of dozen claims to CWPS when payment has already been made under the 1979 Act.

As for the broader application in respect of general damages, I shall carefully reflect on what my hon. Friend said. I do not believe that our proposals for lump sums have set any form of precedent. They are intended only to apply to lump sum payments, but I shall read carefully what he has highlighted and, if need be, we can come back to such matters.

Clause 49 amends the Social Security (Recovery of Benefits) Act 1997 to provide regulation-making powers to the Secretary of State for the recovery of lump sum payments. Money generated through this compensation recovery process will be used to fund the new mesothelioma scheme so that it is self-funding. Lump sum payments under the new scheme will initially be based on what the level of recoveries will allow, but the payments will increase in subsequent years as more recoveries are made. This means that the scheme will be self-funding.

The principles of the current scheme are to be adopted for the recovery of lump sum payments and the amount of the lump sum is to be recovered even if it reduces the civil compensation award to nil. This does not disadvantage the sufferer or their family in any way as the lump sum payment is paid in lieu of any civil compensation. We are not taking money away that people would otherwise have. Regulations falling out of this clause may also allow for a lump sum payment made before the scheme is introduced to be recovered from civil compensation awards made after it is introduced. I ask the hon. Member for South-West Bedfordshire not to press his new clause to a Division. Although he was trying to be helpful, there are enough safeguards in the current system to deal with the issue that he highlighted.

Andrew Selous (Shadow Minister, Work & Pensions; South West Bedfordshire, Conservative)

I am grateful to the Minister for recognising my reason for tabling the new clause. I will not press it to a vote. I note her comments about the court being able to levy charges, which she thought was sufficient and there was no need for the Secretary of State to have a power. I hope that it will not try her patience if I ask her to write to me or to the Committee—or perhaps to respond later today—with some indication of the frequency with which the courts use that power. It is all very well having a reserve power, but it needs to be something that insurers or employers have reason to fear,

Anne McGuire (Parliamentary Under-Secretary (Minister for Disabled People), Department for Work and Pensions; Stirling, Labour)

I try to be helpful to the Committee at all times, but it would be beyond our resources between now and our next sitting this afternoon to find out all the instances where charges have been levied by a court through cases under the English jurisdiction, notwithstanding the fact that we would not have time to look at the Scottish situation.

Andrew Selous (Shadow Minister, Work & Pensions; South West Bedfordshire, Conservative)

I hear what the Minister says. Without putting her officials to too much work, would it be possible to provide any information that the Department has on the frequency with which charges are levied? I am not as convinced as I would have liked to be that she shares my view about the scale of the problem and the frustration of our constituents when some of these issues drag on so slowly. I do not intend to press this new clause, given that she believes that the existing powers are adequate. If they are adequate, it would be reasonable to have some idea of the frequency of their use.