Mesothelioma scheme compensation cut for asbestos victims

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Government fails asbestos sufferers again with cut to funding levy for the mesothelioma scheme

The Government has reduced the funding for the Diffuse Mesothelioma Payment Scheme by cutting the levy on employers liability insurers, which is a huge disappointment and frustration for sufferers and their families.

The Diffuse Mesothelioma Payment Scheme was introduced by Parliament in 2014. Under the scheme payments are made to those who have developed mesothelioma (or their dependants, if sadly the sufferer is deceased) as a result of being exposed to asbestos during the course of their employment, but are prevented from seeking compensation because their previous employer has ceased trading and an insurer cannot be traced.

The Scheme is funded by employer liability insurers who are required to pay the levy. At the time of the passage of the Mesothelioma Bill, the Government made a commitment to set a levy of at least 3% of gross working premium on insurers to fund the Mesothelioma Scheme.  The cut will result in only charging insurers the cost of the scheme.

In January (2016), the Minister for Disabled People, Justin Tomlinson MP, confirmed that the levy had been reduced from £32m in 2014/15 to £23.2m in 2015/16, and will be supplemented by nearly £8 million underspent from last year. He said: “I can announce today that the total amount of the levy to be charged for 2015/16, the second year of the DMPS, is £23.2m. It is estimated that the full cost of the scheme in 2015/16 will be £31m, but, as the amount levied in 2014/15 was greater than the final cost of the scheme for that year, £7.8m has been carried forward into 2015/16.”

Reaction to the news of the cut to the levy has been swift and damning.

Frances O’Grady, TUC General Secretary, said: “We are very disappointed that the mesothelioma levy is being reduced. Asbestos is the UK’s biggest workplace killer. Around 5,000 people die each year from mesothelioma and asbestos related lung cancer – 13 people for every day of the year. The government should maintain the levy at last year’s level and use any surplus to extend the compensation scheme to all victims of asbestos or for research into treatment.”

Throughout 2014, figures from the National Cancer Research Institute show that just £820,000 was invested into mesothelioma research. This number is significantly lower than the £9.9 million and £5.3 million spent respectively on the skin cancers melanoma and myeloma, which are two forms of skin cancer with a similar mortality rate. Per death, £3,700 is invested for skin cancer, whereas for mesothelioma it is only £480. The £7.8m surplus levy from the Mesothelioma Scheme would have a major impact on medical research into mesothelioma and ultimately on sufferer’s lives.

shutterstock_18243493 sml crpBased on the latest projections of annual mesothelioma deaths by the Health and Safety Executive (HSE), the Department of Work and Pensions predicts that 53,000 people in the UK will die over the 25-year period (2013-2037) as a result of developing the deadly lung cancer, mesothelioma. Mike Kane, Labour MP for Wythenshawe and Sale East, while tabling his Mesothelioma (Amendment) Bill under the ten minute rule motion, quoted a figure of about 60,000 deaths from mesothelioma in the next 30 years.

Graham Dring, Chair of the Asbestos Victims Support Groups’ Forum UK, said: “The Government has missed a golden opportunity to implement necessary improvements to this scheme. One of the reasons the fund was underspent last year was because of the decision to pay only 80% of average civil compensation to mesothelioma victims diagnosed before 10 February 2015.

“The levy on insurers announced yesterday represents about 1.7% of the premiums they raise from Employer Liability insurance policies they sell, down from the 2.2% they paid last year. If the levy had been set at the 3% figure promised by the Government in 2014 all applicants could have been paid compensation in full from the start of the scheme. There would also be enough money left over to compensate victims of other asbestos diseases unable to trace a former employer or their insurer.

“It is time the Government stopped prioritising the financial interests of insurers over justice for asbestos victims. They should set a levy at the rate the insurers have already said they can afford, compensate fully those applicants who only received 80% compensation and make arrangements to compensate all asbestos victims whose lives have been ruined by their employer’s negligence and Government failure to ban asbestos until decades after the dangers were known.”

Mesothelioma can take between 10 and 50 years to develop after exposure to asbestos dust and fibres. This makes it difficult for victims to secure compensation when their employer has gone out of business and no insurer can be traced. It was the failure of insurance companies to maintain adequate records that has led to many asbestos victims dying uncompensated. Insurers gained financially from the premiums they received from employment liability policies sold and through not having to pay out to asbestos victims due to their own negligent record-keeping.

Helen Bradley, Partner and specialist in asbestos diseases at Birchall Blackburn Law, said: “We agree that any money left over from the previous scheme year should not be carried over into the next year. It is the insurance companies who will benefit from this by being charged a lower levy. Those who have been affected by asbestos related diseases do so because of their employer’s negligence, the insurance company’s failure to keep appropriate records, and the government’s failure to ban asbestos even though they were aware of the dangers. This situation should not be about savings, it should be about trying to rectify an injustice.

“What is also baffling is that the Association of British Insurers actually told the Government that insurers could afford to pay 3% without passing the costs on to customers. And Mike Penning, former Minister for Disabled People under the last Coalition government, stated in Parliament that 3% would be the figure set during the passage of the Mesothelioma Act 2014. This cut to the levy will only save insurers money and boost their profits.”