Legislative Consent Memorandum
Compensation Bill
Draft Legislative Consent Motion
1. The draft motion, which will be lodged by the Minister for Justice is: "That the Parliament agrees that the UK Parliament should consider those provisions of the Compensation Bill, introduced in the House of Lords on 2 November 2005, which will legislate in the devolved area of damages law in respect of joint and several liability, as laid out in LCM(S2) 8.1."
Compensation Bill
2. The Compensation Bill was introduced at Westminster on 2 November 2005. The Bill began its Committee Stage in the House of Commons on 20 June 2006. The Bill seeks to provide better safeguards for consumers of claims management services in England and Wales and to reassure those concerned about possible litigation that the law of negligence takes the social value of activities into account and that they will not be found liable if they adopt reasonable standards and procedures.
3. More details on the Bill and its progress can be found at
http://www.dca.gov.uk/legist/compensation.htm
Purpose of and background to amendment to Compensation Bill
4. It is intended that an amendment to the Compensation Bill will be lodged at Commons Report Stage to provide in mesothelioma cases that negligent persons are held jointly and severally liable for the damage caused by the disease. The UK Government announced the decision to make this amendment on 20 June 2006. It would be open to the liable person to seek a contribution to the damages awarded from other negligent persons.
5. The decision to legislate arises from a House of Lords judgment in Barker v Corus and conjoined cases on 3 May 2006 . This case raised issues left unresolved by the case of Fairchild v. Glenhaven Funeral Services Ltd in 2002. In the Fairchild case the House of Lords held that a worker who contracted mesothelioma after wrongful exposure to asbestos at different times by more than one employer or occupier of premises could sue any of them, notwithstanding that he could not prove which exposure actually caused the disease, for all had materially contributed to the risk of contracting the disease. That created an exception to the normal rule requiring proof of causation, which would otherwise have prevented the claimant from recovering any compensation from any of the employers responsible for exposing him to the asbestos. It did not, however, resolve the precise nature of the employers' liability, and whether they should be jointly and severally liable or liability should be apportioned among them; cases have been settled post- Fairchild on the basis of joint and several liability.
6. It is that issue which was the subject of Barker v Corus. The House of Lords has now determined that in a case within the boundaries of the Fairchild exception, where a worker has contracted mesothelioma after wrongful exposure to asbestos at different times by more than one employer, his damages are to be apportioned among the 2 employers responsible for the wrongful exposure according to degree to which they each contributed to the risk of the worker contracting the disease. This means in practice that the claimant will have to trace all relevant defendants (as far as this is possible) before liability can be apportioned and compensation paid, or issue multiple claims, and that the risk of any of them being untraceable or insolvent and unable to pay the appropriate share will fall on the claimant. This will make claims much more difficult and time-consuming for claimants to bring and in some cases they will not receive full compensation.
Position in Scotland
7. The law of damages is devolved. It has long been the case that there are no significant differences in the law relating to joint and several liability north and south of the Border. The House of Lords judgment in Barker v Corus is not binding in Scotland, but the courts are likely to find it highly persuasive. It therefore leaves the law in Scotland unclear in relation to joint and several liability in mesothelioma cases. If the provision now proposed in the amendment to the Compensation Bill for joint and several liability in mesothelioma cases is not extended to Scotland, then the likely position would be that the problem of untraceable or insolvent former employers would continue in England, as pre- Barker v Corus, to be borne by employers and insurers, but in Scotland it would be borne by terminally ill mesothelioma sufferers who would receive smaller compensation payments.
Policy Intention
8. The Scottish Executive intends to provide in legislation that, in mesothelioma cases where there is more than one negligent employer, employers should be jointly and severally liable for the damage caused by the disease. This will ensure that the claimant can recover full compensation from any relevant employer. It would then be open to that employer to seek a contribution to the damages awarded from other negligent employers. The objective is to ensure that Scottish claimants suffering from mesothelioma receive full compensation and are not in a less favourable position than claimants in England and Wales.
Compensation Bill as the vehicle to make the necessary legislative change for Scotland
9. The Minister for Parliamentary Business announced on 22 June that the Executive will be bringing forward a Damages Bill in the remainder of session 2006-2007. This will address a specific issue relating to non-patrimonial loss claims by the relatives of people with mesothelioma. This Bill could be used as a vehicle to make the changes to address the effects of Barker v Corus. Our primary concern, however, is to address this issue as quickly as possible and to ensure that mesothelioma sufferers in Scotland are not disadvantaged by the judgment for any longer than is necessary. The provisions planned for the Compensation Bill would be entirely within legislative competence for the Scottish Parliament. However, using the Compensation Bill (which it is hoped will complete its passage through Parliament before the end of July) as the vehicle to address Barker v Corus for Scotland is the quickest way of ensuring equal treatment and full compensation for claimants with mesothelioma in Scotland. Separate Scottish legislation to the same end would not come into effect for some months after the Compensation Bill receives Royal Assent. Even if Scottish legislation were retrospective, claims which needed to be settled in court prior to the coming into effect of Scottish legislation could be adversely affected by Barker v Corus. It is for these humanitarian reasons that a Legislative Consent Motion is being lodged in a situation which does not allow for the normal timescales to be followed.
Consultation
10. There have been discussions between Whitehall Departments and various stakeholders including the TUC, the Association of British Insurers and the Association of Personal Injury Lawyers. Representations have been made to the Scottish Executive about the effect of Barker v Corus on mesothelioma sufferers in Scotland and there have been calls in the Scottish Parliament and beyond for the judgment to be overturned.
Financial Implications
11. Legislating to address the effect of the Barker judgment does not create any new liability that did not exist before the judgment. It is not clear what the savings to liable parties would have been if cases had been determined in future on the basis of the Barker judgment .
Scottish Executive
June 2006