“Tariff Will Not Change” – ABI rejects suggestions over Mesothelioma Act

The logo for the Association of British Insurers (ABI)

The Association of British Insurers (ABI) has claimed that the levy on the Mesothelioma Act will decrease after 2015 rather than increase, contradicting claims last week that it could rise to 100% in the future.

Last week the Labour Peer, Lord McKenzie gave hope to mesothelioma victims that the compensation tariff through the Act, currently set at 75%, could one day increase to 100%.

But this has since been dismissed by the ABI, who has insisted that the tariff is not relative to the number of claims being made through the scheme.

A spokesman for the ABI said: “The Mesothelioma Act sets out the payments that mesothelioma sufferers will receive on the basis of a simple age-based tariff. The tariff will not change relative to the number of claims to the scheme.

“Due to uncertainty as to the number of claims, the ABI has negotiated a position whereby the government will ensure the levy will not exceed 2.74% of employer’s liability premiums for the first four years of operation.

“Scheme payments in excess of this amount will be funded by the government, thereby providing certainty to insurers as to how much they will have to pay. Mesothelioma claims are predicted to peak in 2015, so the expectation is that the levy will reduce after this time.”

The revelations from the ABI are bound to bring distress to those who suffer from the (industrial) disease and are in the predicament whereby they are forced to rely on the Mesothelioma Act in order to get compensation.

It will also create fresh outrage for those who have campaigned hard, just to get the government to agree for 75% of the usually entitled damages to be awarded for those claiming through the act.

Once again the careless attitude of the insurance industry towards those people who are unfortunate to find themselves in the position where they are unable to claim for their illness is on display for all to see.

The Chairman of the Asbestos Victims Support Group Forum, Tony Whitston expressed fears over the insurance industry’s failure to commit to the 2.74% levy.

He said: “There is potential for 100% compensation if the levy were maintained but we have not had a firm commitment to maintaining the levy. Lord McKenzie asked for this in the Lords debates and it wasn’t forthcoming. I wrote to Lord McNally asking for confirmation and I did not get a reply. During the debates in the Commons there was not a firm commitment to it.”

Mr Whitston also expressed concerns for the future of mesothelioma claims, especially considering the fact that the government are proposing to remove the exemption on mesothelioma claimants playing success fees and after the event insurance premiums.

He accused the government of not holding a proper consultation over the decision and has requested a judicial review.

“The MoJ (Ministry of Justice) asked respondents whether they agreed with government that, in light of the conditional fee agreement changes in LASPO (Legal Aid, Sentencing and Punishment of Offenders Act), the reforms on pre-action protocols and fixed costs and the Mesothelioma Bill, we should bring into force sections 44 and 46, regarding the paying of success fees and ATE insurance (After-the-Event insurance) respectively.

“The MoJ abandoned the reforms on pre-action protocols and fixed costs, so that reason for ending the exemption is gone. The Mesothelioma Act has nothing to do with civil claims, and I have a letter from Shailesh Vara which concedes that. That leaves one reason – the conditional fee agreement changes – but the Lords rejected that reason for applying legal charges on Mesothelioma sufferers.”

Not surprisingly this decision by the government was supported by the ABI who claim that it provides a better deal for victims who are not currently benefiting from the 10% uplift in general damages.

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