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Personal Injury Update

Published September 2014

Mesothelioma Act 2014 update

In the March edition of this Update (click here to view) we discussed the coming into force of the Mesothelioma Act 2014 and the compensation package that would be available to those eligible under the Act, i.e. individuals who could demonstrate that they developed mesothelioma due to negligent exposure at work, but who could not trace an employer/employer's liability ("EL") policy for the period in which they contracted the disease.

This has now been implemented by the Diffuse Mesothelioma Payment Scheme Regulations 2014 (S.I. 2014/916) ("the Regulations"), which commenced on 1 July 2014. Under Table 1 of these fixed awards, made on a sliding scale according to the age of the claimant at diagnosis, an eligible 70 year old could apply for a compensation award of £120,951. This was in Schedule 4 of the Regulations referred to above.

However, the awards have since increased by around £8,000 for each age group and are reflected in The Diffuse Mesothelioma Payment Scheme (Amendment) Regulations 2014 (click here to view). Therefore, if successful in their application, the compensation award now available to a 70 year old individual has risen to £128,548. In short, the younger the applicant the higher the potential sum awarded with a maximum of £216,896 for a successful applicant who is aged 40 years or under.

We understand that the amounts in the Table include a sum of £7,000 for a contribution towards legal fees. This is stated on the Government website which runs the payment scheme (click here to view) and seems to demonstrate the intention of Government to fund legal fees up to this sum. However, this is not clearly stated in either the initial Regulations or those now amended.

As noted above, the scheme is there to assist those who cannot trace their previous negligent employer or the relevant insurer, but what if the employer/insurer is then located once a payment has been made? The Government website (run by Gallagher Bassett as administrator) notes in the "Questions and Answers" tab that if this should happen, the sum already paid under the scheme to the applicant must be deducted by the compensator from the amount awarded and repaid to the Diffuse Mesothelioma Payment Scheme. It is not yet clear how this will be dealt with in practice, or how potential double-recovery will be detected or prevented.

Comment

It will be difficult to assess the impact of the scheme from a defendant's point of view until it has been running for a little while. How many claims which would previously have been handled by a solicitor (and eventually notified to a defendant/P&I Club) may now go through the scheme with no legal representation? For example, a potentially eligible claimant who may have gone directly to a solicitor for advice in the past might instead make their own basic enquiries as to the existence of a previous employer (guided by the Government website). Presumably they would then complete the application form to make a claim if they cannot locate an existing employer/employers' liability policy. If they can locate the employer/policy they will then not be eligible for the scheme, will instruct solicitors and the case will continue as usual.

Those administrating the scheme (and who decide whether a claim is to be successful) will carry out their own checks on locating an untraced employer/insurer. However, as this scheme develops, defendant solicitors, insurers/P&I Clubs may see a temporary drop in mesothelioma cases as claims that their clients/members would have previously faced are re-directed into the scheme, at least initially.

Thereafter, unless the proposal to abolish the success fee and After-the-Event insurance premium ("ATE") for mesothelioma claims goes ahead, there is no reason why a claimant should not seek a solicitor's advice in the first instance, even if that advice ultimately points them in the direction of the scheme and the Government contribution to any legal costs.

We can only speculate at this stage but will keep you updated on future developments regarding this Act.

In our next update we will also let you know the outcome of the judicial review regarding the potential abolition of recoverability of success fees and ATE premium for mesothelioma cases which was heard at the end of July 2014. The judgment on this is currently due to be handed down on 2 October 2014.


OTHER ARTICLES IN THIS ISSUE

Mesothelioma Act 2014 update

The Maritime Labour Convention 2006: one year on and is the pressure building for PSC?

Part 36 offers: pitfalls for defendants

Recent personal injury cases / incidents /regulatory developments and prosecutions






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