The government has recently published their response to a consultation about relaxing laws relating to employer liability insurance. Click here for link to the full government response.
The government’s consultation sought views on how to reduce the “administrative burden” on employers in relation to the Employers’ Liability (Compulsory Insurance) Regulations 1998. Amongst the Regulations are requirements for employers to retain insurance certificates for 40 years and to display the certificate at the place of work in a prominent manner. The government has announced that they plan to scrap these regulations.
The background to this consultation is that individuals are now developing “long tail” industrial diseases as a result of exposures to noxious substances and conditions in employment that may have taken place many years ago. For example, we are seeing an epidemic of industrial diseases like mesothelioma and it is predicted that the numbers of deaths caused by meothelioma will continue to increase until 2011-2015.
Unfortunately, some of the former employers responsible for causing these illnesses are now defunct. If their previous employer liability insurers cannot be traced this can lead to some victims failing to recover compensation. Amongst the most severely affected include victims of asbestos diseases; mesothelioma, lung cancer, asbestosis and pleural thickening. These diseases have long latency periods between exposure taking place and the onset of symptoms. For example, mesothelioma can occur over 30 or 40 years after asbestos exposure has taken place.
Unfortunately, the government have decided to remove the requirement upon employers to retain insurance certificates for 40 years because in their view, the current regulations cannot be “effectively enforced.” In spite of this the government acknowledges the problems in relation to long tail disease claims that can arise over 40 years after exposure and that failures by employers to retain insurance documents could lead to employers having to meet compensation claims themselves. Therefore, this makes their decision to relax rather than tighten the regulations even more bewildering.
The government recognised that the TUC, APIL and asbestos support groups saw the reforms as likely to weaken the ability of future claimants to successfully trace employers’ liability insurance policies. However, the government ignored pleas made by organisations that represent victims to introduce an effective enforcement regime. Perhaps even more disappointingly they also refused to introduce a database to record employer liability insurance policies and acceded to the ABI’s arguments that the cost of such a database would be “prohibitive.”
The government response considers that retention of the current “ineffective” system is not appropriate just because no acceptable solution has been developed. The government strategy is to replace regulations with guidance for businesses, pointing out that it would be “unwise” for businesses not to keep their own records and rely on third parties to provide the information. Effectively, employers are being allowed to self regulate and potential victims of disease and illnesses are being asked to stake their futures on the good intentions of business.
The government’s decision to undermine protection in this area is all the more disappointing given the abject failure of the ABI’s code for tracing insurance policies. Success rates for tracing insurers under this scheme have been consistently poor and although the ABI have now introduced some improvements to the code, for many practitioners who represent asbestos disease sufferers, this is too little too late. We proposed in our submission that the ABI voluntary code should be put onto a statutory footing, so that the code has “teeth” to deal with insurers who fail to comply. We also proposed that the period for retention of insurance certificates should be increased from 40 to 60 years. Indeed, this may have gone some way to addressing concerns cited by the government that the present regime is ineffective. In addition to proposing a database for retention of insurance certificates, we also argued that companies could lodge copies of their insurance certificates with their annual returns that have to be lodged at Companies House. We considered that this would have been a simple and cost effective way of trying to address the current shortcomings. The government have not adopted any of these proposals.
The government have also decided to change the regulations to permit insurance certificates to be displayed electronically despite the concerns expressed by the TUC, APIL and asbestos support groups that this would weaken compliance and provide fewer opportunities to view policies.
We are very concerned at the government’s decision to not only overlook the chance to improve and strengthen the current regime, but to further erode and undermine the rights of potential future claimants.
John Pickering and Partners LLP- Specialist asbestos solicitors
John Pickering and Partners LLP is a niche legal practice that has represented Claimants in the leading asbestos "test cases" in the last ten years. The firm represented Sylvia Barker in Barker v Corus (UK) Plc, a case that highlighted the legal tactics of employers and insurers trying to cut back their compensation liabilities to mesothelioma sufferers, and which prompted the amendment of the Compensation Act 2006 to ensure full compensation for mesothelioma claims. The firm represented two of the three Claimants in the Fairchild appeal, in which the insurance industry tried unsuccessfully to block compensation altogether for mesothelioma sufferers unable to identify which of two or more sources of asbestos exposure had caused their illness.
The firm represented Alice Jefferson, a mesothelioma sufferer, whose illness and compensation claim against Cape Asbestos were featured in the important documentary "Alice: A Fight For Life." Shown by Yorkshire Television in July 1982, the programme was an important catalyst for legal change and public awareness of the plight of the victims of asbestos.
If you need advice about an asbestos related illness, contact us now for
information about making a claim for compensation.
Further information:
Kevin Johnson, Partner
John Pickering and Partners LLP
19 Castle Street
Liverpool
L2 4SX
Telephone: 0151 227 1214
E-mail: kj@johnpickering.co.uk
Website: www.johnpickering.co.uk
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