Insurers fear the government's attempt to reverse the Barker ruling on mesothelioma claims could have unintended consequences. Katy Dowell reports

The Compensation Bill looks set to be given Royal Assent this week. But the final Bill differs significantly from the original published in October. Alongside regulating claims management companies and clarifying the law of negligence, the Bill has, through a hasty amendment, reversed the controversial Barker ruling on mesothelioma claims.

Following Barker, mesothelioma claimants must now trace and sue every employer in order to obtain full compensation. This has prompted concerns among the asbestos lobby that claimants will be deprived their just compensation.

The amendment to reverse Barker came at the last minute and attempts to put the law back to its previous position where claimants could obtain full recovery from one employer.

But there are fears that the impact of the clause will be wider than originally intended.

"Once the government had decided it would reverse the Barker ruling there was an inevitability about it," says Steve Thomas, Zurich's technical claims manager.

"The wording is not ideal and I am not convinced it will do what the government has set out to do."

So has the amendment opened the floodgates to mesothelioma claims?

"I don't think insurers will suddenly face masses of claims. Mesothelioma affects a

limited number of people. What it does mean is that liability is no longer limited to workplace exposure," says Thomas. "The government has reversed Barker and gone further."

Thomas' frustration is that the government has pushed the amendment through parliament without fully consulting the industry it is most likely to affect.

"There should have been more dialogue," he says.

David Williams, AXA technical claims manager, is also concerned about the wider ramifications. "There is still the problem that this legislation has failed to set precedent, and that means further satellite litigation."

Both Williams and Thomas say that the ABI has lobbied hard on the issue. But it seems the ABI's concerns fell on deaf ears.

The issue of mesothelioma became an important issue for the government, so much so that Tony Blair wanted to be personally associated with it. He declared to an audience of trade unionists that the Barker ruling would be overturned several weeks before MPs had even discussed possible amendments to the Compensation Bill.

The move has divided the lawyer fraternity. Thompsons Solicitors hailed the amendment as an example of the government "moving swiftly to give certainty to claimants" and a "monumental step in the fight to ensure mesothelioma victims again have access to the justice they deserve".

But Kieron West, a partner at law firm Kennedy's, says the Bill is Labour "undermining" a House of Lords decision.

He says: "The court of Blair has decided the House of Lords doesn't know what its talking about and has changed the law without looking at it. It is a knee jerk reaction. Typically Blairite."

But in its zeal to tackle asbestos claims, the government has not stopped with simply reversing Barker. This week, the Department for Work and Pensions unveiled immediate measures to speed up the settlement of these claims.

The measures, outlined by John Hutton, the secretary of state for Work and Pensions, include working with Revenue and Customs so that employer records can be traced quicker. There will be a standard claim letter, which will highight the claim as one for mesothelioma, so it will receive priority from the start. These are short term fixes, which, says Hutton, will be developed further in the autumn.

The ABI wants Hutton to introduce a tariff system which will see claimants awarded set amounts. Justin Jacobs, head of liability at the ABI, says this system could be flexible. "A tariff of compensation levels will cut the time it takes for an insurer to settle."

Oliver Heald, the shadow secretary for constitutional affairs, also believes there is more work to be done: "The basic fact is that the problems identified by the ABI will be only be solved through far-reaching comprehensive reform."

AXA's Williams says the interim measures are to be welcomed, but much further reform is desperately needed.

"There are two things delaying the payment of these claims: tracing who is responsible and the adversarial approach of some claimant lawyers.

"If a standard claims letter could reduce the involvement of lawyers, and Revenue and Customs is another avenue of tracing employers, then it can only help."

The Compensation Bill has mutated considerably since its initial conception, and the recent controversy over mesothelioma claims has been a distraction from the Bill's main purpose of regulating claims management companies.

It remains to be seen, however, whether the Bill's new metholioma clause adds certainty or confusion to the compensation system. IT