The funding structure would mean insurers would pay for claims relating to decades-old illnesses

The mechanism for funding the proposed government-run Employers’ Liability Insurance Bureau (ELIB) is “fundamentally flawed”, a defendant insurance solicitor has warned.

Consultation closed earlier this month on the proposal. The Department of Work and Pensions wants all insurers to pay into the scheme to cover injured workers’ claims that cannot be traced to an employer or insurer. David Pugh, of law firm Keoghs, said insurers would be funding claims relating to illness that developed decades ago.

However, because ELIB’s costs were meant to be picked up by the industry, it was less likely to be affected by spending cuts.