Compensation Act

Compensation restored

On 3 May 2006 the House of Lords delivered a devastating judgement. It said, in Barker v Corus, that mesothelioma victims who had been exposed to asbestos in more than one job could not claim all their compensation from one employer.

This affected their right to claim compensation for the asbestos related cancer, mesothelioma, and meant that they had to figure out the extent to which each employer had contributed to the risk of the disease over the time they had been exposed.

To get their full entitlement the claimant had to find and sue every culpable former employer, some of whom had disappeared without trace and were never insured.

Not a realistic option for someone in good health, never mind someone dying of mesothelioma. The net result was that the two widows, in this case, Mrs Barker and Mrs Murray, stood to lose tens of thousands of pounds in compensation, as did many other sufferers and their families. Not surprisingly, the judgement provoked a public outcry.

Unfair decision

Ian McFall, Head of Asbestos Litigation for Thompsons who acted for Mrs Murray on behalf of her husband’s trade union the GMB, said: “The court has, on a legal technicality which will make no sense to most people, deprived our client of full compensation for the death of her husband. The real winner here is the insurance industry which stands to save billions of pounds. We will be urging trade unions and asbestos victim support groups to press for legislation to counteract this gross injustice.”
As a result of the campaign that ensued in which Thompsons played a crucial role (involving trade unions, support groups, lawyers and Labour MPs), the Government agreed to amend the Compensation Bill which was going through Parliament. Essentially, it accepted that the decision by the House of Lords was unjust and that mesothelioma sufferers and their families should receive the compensation they deserved.

Compensation act

The “Mesothelioma damages” amendment, as it is known, is now part of the Compensation Act 2006. Section 3(1) says that if a “responsible person” acts negligently (or in breach of the law), as a result of which someone else is exposed to asbestos and develops mesothelioma, then the “responsible person” is liable for all the damage caused, even if the victim had also been exposed to asbestos by someone else.
And it gets better. Section 16 of the Act says that section 3 “shall be treated as having always had effect”. In other words, it has to be interpreted as though it has always been the law, meaning that the two widows involved in Barker v Corus, will now receive the compensation to which they were entitled.

For Mrs Murray that means she will receive the full sum she was originally awarded in 2003 after her husband contracted the fatal illness through exposure to asbestos during his time as a welder in various shipyards in the North East.

He died in 1999, but one of his employers, British Shipbuilders (Hydrodynamics) Ltd, argued it should only pay a portion of the compensation because it had only contributed towards 42% of Mr Murray’s asbestos exposure. That argument has finally been buried by the provisions of the Compensation Act.

The Compensation Act is actually the product of the Government’s concern about compensation culture. Despite accepting the overwhelming evidence that there was no compensation culture the Government swallowed the insurance company line that there was a genuine fear of being sued and as a result they needed to do something about it.

The first clause of the act seeks to redefine the concept of negligence (see news story page 2).

The second part of the act seeks to regulate the claims management companies. If enforced effectively, it should stop the worst excesses by unscrupulous operators.