Asbestos sufferers and their lawyers have welcomed the government’s announcement that it will not be reclaiming compensation from Turner and Newall claimants.

The decision will mean that victims of the UK arm of the insolvent US manufacturing giant Federal Mogul, and its other associated UK companies, will be able to keep all their compensation rather than having to pay a portion of it to the government’s Compensation Recovery Unit (CRU).

Thompsons Solicitors has campaigned with trade unions and victims’ groups to secure a fund to pay out the thousands of people who developed or will develop asbestos-related diseases as a result of being negligently exposed by T&N.

But with payouts from the fund set to be dramatically lower than claimants would have received if T&N had not been in administration, victims would have lost still more of their compensation had the usual CRU rules applied.

The law allows the government to reclaim the first five years of any state benefit that has been claimed, once the innocent victim of injury or disease receives compensation.

But the Department for Work and Pensions has confirmed that T&N claimants should keep their compensation in full.

Ian McFall, head of asbestos litigation at Thompsons Solicitors said:

"This is a swift and compassionate move by the government which will make a real difference to thousands of asbestos sufferers and their families. These claimants have had an agonising wait for their compensation, since T&N went into administration, and even though the settlement fund has now been established, they are only likely to receive about 20p in the £1 – signficantly lower than the real worth of their claims."

"To have to lose still more of their damages by paying back benefits to the government would have been a very difficult thing for claimants to understand. We welcome this move, which will help hundreds of people immediately and many more who may claim in the future.”