MoJ MESO DECISION ANNULLED

R (on the application of Whitson) v Secretary of State for Justice [2014] EWHC 3044 (Admin)

On 2 October Mr Justice Davies ruled that the Lord Chancellor’s decision to abolish the entitlement of mesothelioma victims to recover their solicitors’ success fees and after the event insurance premiums from defending insurers was unlawful. 

Mesothelioma is a fatal disease which is caused by exposure to asbestos dust.  In 2011 it was responsible for 2,291 deaths in the UK, and the number of cases each year is expected to increase further.  Due to the difficulty in establishing liability, proving causation and the complications in identifying often numerous different employers and in tracing their insurers, these claims were exempted by section 48 of the Legal Aid Sentencing and Punishment of Offenders Act 2012 (LASPO) from sections 44 to 46 LASPO that abolished a successful claimant’s entitlement to recover these additional liabilities from a defendant. 

Section 48(1) of LASPO provided as follows:

‘Sections 44 and 46 may not be brought into force in relation to proceedings relating to a claim for damages in respect of diffuse mesothelioma until the Lord Chancellor has (a) carried out a review of the likely effect of those sections in relation to such proceedings, and (b) published a report of the conclusions of the review.‘

Rather than undertaking the proper and fair review required by section 48, the Lord Chancellor’s decided instead dispose of this duty by bolting on a question to the 2012 consultation dealing with procedural aspects of mesothelioma claims.  It invited consultees to comment on whether the exemption should be removed but this was predicated on various other proposals being implemented, which did not eventually happen.  This issue was never addressed directly and on its own and no proper attempt was made to research the likely consequences.

Mr Whitson of the Asbestos Victims Support Groups Forum UK brought a Judicial review of the decision to remove the exemption.  It disputed the assumptions made in the Government’s impact assessment and argued that for from being cost neutral to the victims affected the Government’s reforms would leave this particularly vulnerable class of victim loosing tens of thousands of pounds in unrecoverable costs; effectively denying them their full compensatory entitlement.

The judge concluded that the Lord Chancellor had failed to carry out the proper review that section 48 required.  He concluded that ‘no reasonable Lord Chancellor faced with the duty imposed on him by section 48 of the Act would have considered that the exercise in fact carried out fulfilled that duty’.  Accordingly, the Lord Chancellor’s decision of December 2013 to abolish the mesothelioma exemption was annulled. 

The appointment of Chris Grayling as Lord Chancellor in 2012 was controversial at the time as it broke with a long established convention that the head of the legal profession should come from one of the legal professions.  Instead we now have a Ministry of Justice department controlled by career politicians, with all that implies.

The Association of British Insurers, intervening, argued that the Lord Chancellor’s decision should be upheld as ‘the Lord Chancellor would be bound to make the same decision after a review as required by Section 48’.  This revealing statement illustrates the ABI’s role as the éminence grise behind much of the Governments policy making in this area.  In July 2014 a Parliamentary Justice Committee Report also considered the appropriateness of the Lord Chancellor’s decision to remove the mesothelioma exception.  It found that the outcome of the Chancellor’s flawed review had always been a foregone conclusion.  It brought to light the fact that the ABI had already reached a secret understanding with the Government in July 2012.  The committee expressed concerns that the Government had not been transparent or open about its true agenda, either with the committee itself or with other interested parties, and that it had not been even handed in its consultation.  

Any further consultation is likely prove to be a tendentious exercise, when such powerful interest groups continue to enjoy such extensive influence and control of government policy.

Further evidence of the insurance lobby unconstitutional influence can be found in last week’s New Law Journal opinion piece: Bad Law.