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Ministry of Justice Loses Mesothelioma Costs Battle

About The Author

Alexander Barbour (Former Criminal & Environmental Law Editor)

Alex has recently graduated from the University of Birmingham, achieving a First Class Honours degree in Law. His main interests lie in issues concerning human rights, criminal justice and the environment. Alex recently received the Albion Richardson Award from Gray’s Inn to fund the BPTC, which he is currently undertaking at the University of Law, Birmingham.

Mesothelioma is a rare form of cancer that develops as a result of exposure to asbestos and asbestos dust, but can take up to thirty years to show symptoms. Once the cancer does become symptomatic its progression is rapid, with most sufferers surviving for less than 12 months from the onset of symptoms. The effects of the disease over the period from the onset of symptoms to death are hugely painful and debilitating. This combination of factors means that litigation in relation to mesothelioma is unusual in comparison with many other types of litigation involving personal injury or industrial disease.

The law in the UK affords specific protection to mesothelioma claimants, of whom there are thousands each year, by allowing them to skip a number of causative hurdles (Fairchild v Glenhaven Funeral Service Ltd is the leading case on the area). One such hurdle is the factual causative hurdle. For ordinary personal injury claims, the claimant must satisfy a factual test, namely, ‘but for the conduct of the defendant, would the claimant have suffered harm?’ The test is much wider for mesothelioma sufferers who merely have to prove that each previous employer materially contributed to the risk of harm. Until recently, it has been clear that the defendant insurance companies would cover the cost of proceedings; however, the Ministry of Justice, following a recent consultation, decided that these costs should be covered by the claimant, leaving the mesothelioma sufferers and their families an estimated 25% worse off.

Tony Whitston, Chairman of the Asbestos Victims Support Groups Forum, brought legal action against the government on the grounds that the decision of the Ministry of Justice was unlawful. Mr Justice Davis, handing down his judgment in the High Court in October, ruled that the consultation by the Ministry of Justice was unlawful. 

The Consultation

In May 2012 the Legal Aid Sentencing and Punishment of Offenders Act 2012 (‘LASPO’) came into force. Sections 44 and 46 of this Act prevent the recovery of success fees, which can be up to 100% of ordinary legal costs, and insurance premiums paid by successful claimants from unsuccessful defendants. However, the provisions were not to apply to proceedings relating to mesothelioma, as set out in s 48(1):

Sections 44 and 46 may not be brought into force in relation to proceedings relating to a claim for damages in respect of diffuse mesothelioma until the Lord Chancellor has (a) carried out a review of the likely effect of those sections in relation to such proceedings, and (b) published a report of the conclusions of the review.

In December 2013 the Lord Chancellor, Chris Grayling, decided to bring into force Sections 44 and 46 of Legal Aid Sentencing and Punishment of Offenders Act 2012 in relation to mesothelioma claims in accordance with the process provided in this section.

When the case reached the High Court, Davis J deemed that the decision of the Ministry of Justice to remove he exemption for mesothelioma claims was unlawful, as the consultation process was not conducted properly:

The issue is whether the Lord Chancellor conducted a proper review of the likely effect of the LASPO reforms on mesothelioma claims … No reasonable Lord Chancellor faced with the duty imposed on him by Section 48 of the Act would have considered that the exercise in fact carried out fulfilled that duty.

There are three main reasons that can be drawn from the judgment of Davis J that explain the decision. Firstly, Question 15 of the consultation paper was the only question relating directly to the effect of the proposed LASPO reforms on mesothelioma claimants. It asks: 

Do you agree that sections 44 and 46 of the LASPO Act 2012 should be brought into force in relation to mesothelioma claims, in the light of the proposed reforms described in this consultation, the increase in general damages and costs protection described above, and the Mesothelioma Bill?

In their response to the consultation, the Law Society of England and Wales outlined that they ‘do not consider that a single consultation question … is likely to produce the detailed data and analysis required to make a satisfactory assessment’. Davis J accepted this view at paragraph 31, where he asserts that ‘the question of itself did not invite the objective reader/consultee to assess the likely effects of Sections 44 and 46 on mesothelioma claims’. 

The LASPO reforms are only one of several proposed reforms relating to mesothelioma claims set out in the consultation paper (hyperlinked above). Question 15 asks consultees to consider the LASPO reforms ‘in the light of the [other] proposed reforms described in [the] consultation’; this presents two problems. First, Davis J ruled that a single question that does not deal solely with the effect of the LASPO reforms is insufficient for a review under s. 48 LASPO. Secondly, this takes on a new level of absurdity when coupled with the fact that in the written ministerial statement issued by Shailesh Vara MP, Minister for Courts and Legal Aid, which outlined the outcome of the review, the government announced that none of the other ‘proposed reforms’ in Question 15 were to be implemented, meaning the key premise to Question 15, namely that LASPO reforms were to be considered in light of other reforms, no longer applied.

The most damning point Davis J makes regarding the ministerial statement, however, and the point which I believe to represent a key reason why the review was found to be illegal, is made at paragraph 34: ‘the Minister did not give any indication of what the Lord Chancellor had concluded as to the likely effect of Sections 44 and 46 on mesothelioma cases … which was the statutory purpose of the review’.

The Association of British Insurers 

In almost every case where a claim is made regarding mesothelioma, the defendant is an insurance company, as claims are brought against employers with employers’ liability insurance. Since the creation of the Employers’ Liability Tracing Office, even if the previous employer has gone out of business, it is possible to trace the company’s insurance provider and claim compensation. Accordingly, the Association of British Insurers (“ABI”) intervened as an interested party in the judicial review proceedings in order to try and protect the interests of their stakeholders. However, the involvement of the ABI in the overall decision-making process may have been more extensive than anticipated. It has been alleged that the Government had entered into an agreement with ABI to facilitate the removing of the LASPO exemption for mesothelioma claims.

This summer the Commons Justice Select Committee criticised the consultation process and expressed concern about an agreement that had been drawn up in 2012 between the Government and the ABI. The committee concluded that:

We are concerned that the Government has not been transparent or open, either with us or with other interested parties … It is hard to see how a balanced and informed public debate can take place when a prior agreement has been reached between two of the principal parties to that debate, and that agreement is not known to others participating in the debate, including victims.

Few would argue that the select committee’s concern is not justified, with transparency and openness with other interested parties being key to an impartial, fair consultation process. Richard Stein, of the firm Leigh Day, said that he hoped this judgment would ‘send a clear message to the government that it has to conform with the laws of the land and cannot ride roughshod over the interests of mesothelioma sufferers and their families to benefit the insurance industry.’

What Happens Next? 

With the implementation of sections 44 and 46 LASPO now halted by the decision of the High Court, successful mesothelioma claimants will continue to receive all of the compensation at the expense of defendant employers’ liability insurance companies, who will continue to pay costs and insurance premiums. However, the Ministry of Justice has committed to conducting the consultation process again, leading some to question what lesson, if any, has been learned.

This High Court decision is the second time in just a few weeks that it has been ruled that a consultation carried out by the Ministry of Justice was so flawed as to be unlawful. In September, plans to cut criminal legal aid by £220m were thrown into confusion after the High Court ruled that the Ministry of Justice’s consultation process was illegal.

Nicola Hill, President of the London Criminal Courts Solicitors’ Association, which challenged the separate consultation over legal aid cuts, describes it as ‘depressing’ that the government are trying to ‘worm their way out of the High Court’s findings’ as it did in the case of legal aid. On that occasion, the Ministry of justice simply conceded that the judicial review ‘raised some technical issues about the consultation process’.

Chris Grayling has once again found himself held to account by the very process he is trying to restrict, namely judicial review. Following the High Court decision concerning legal aid, the vice-chairman of the Criminal Law Solicitors’ Association voiced his views, which arguably reflect public opinion on the point: ‘The way the government has handled this process means we no longer have any faith in their ability to conduct any further consultation with fairness and integrity’.

Furthermore, in the recent decision of Re D (A Child), Sir James Munby, President of the Family Division of the High Court, expressed his scathing views on the effect legal aid cuts are having on the courts’ administration of justice. In this case, the parents of a child, who both suffer from mental disabilities, were disqualified from legal aid on the ground that the father’s disposable income from modest employment was £34.64 and £73.94 above the new threshold for the months of May and June 2014 respectively. Given that this case concerns the removal of their child, the issue of representation is crucial. Both parents are ‘wholly dependent on the good will of members of the legal profession’ who are representing them pro bono. Sir James Munby outlined the absurdity of the recent reforms of legal aid, which have resulted in a situation where ‘the parents were entitled to … legal aid … at a time when the removal of their child was not the plan. Yet when they are now facing an application for the permanent removal of their child … they are denied legal aid’. This is clearly, as Sir James Munby states, ‘a breach of their rights under Article 6 and 8 of the Convention’ and ‘a denial of justice’.

This unprecedented run of failures leaves confidence in the Ministry of Justice at an all time low. Eyes are now turning to the general election, meaning this could prove to be catastrophic for Chris Grayling and the Conservative party.

With insurers committed to the application of LASPO in order to protect their financial interests, and another Ministry of Justice consultation on the horizon, the amount of legal costs payable by mesothelioma sufferers and their families looks set for a significant increase; an additional unwelcome injustice added to Chris Grayling’s track record.

Further Reading

The Guardian (Online), ‘Court rules consultation over payout curbs for asbestos-related cancer illegal’ 7 October 2014

BBC News, ‘Asbestos victims win damaging ruling’ 2 October 2014

The Guardian (Online), ‘Plans to cut criminal legal aid in doubt after court ruling’ 19 September 2014

The Guardian (Online), ‘House of Lords votes against Grayling’s plans to restrict judicial review access’ 27 October 2014

Lewis Bedford (KCTL), ‘The Mesothelioma Bill: A Fraction Of The Justice They Deserve?’ 28 January 2014

Ryan Turner (KCTL), ‘Legal Aid – A Line In The Sand’ 10 March 2014

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Tagged: Justice, Legal Aid, Tort Law

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