Legal Aid, Sentencing and Punishment of Offenders Bill — Committee (6th Day) (Continued)

Part of the debate – in the House of Lords at 9:30 pm on 30th January 2012.

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Photo of Lord Wigley Lord Wigley Plaid Cymru 9:30 pm, 30th January 2012

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.

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 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 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.