Clause would have been 'disastrous' for insurers

Attempts to slip an amendment into the Compensation Bill which would effectively leave insurers liable for pleural plaques claims have been thwarted in the House of Commons.

The amendment said insurers must pay up where a chemical or substance becomes lodged in the body as a result of negligence, whether or not the substance has caused symptoms at the time legal action is commenced.

There were fears that if passed insurers could be left exposed to claims for injuries which could not be medically proven.

Justin Jacobs, head of liability at the ABI, said: "The amendment would have changed what we compensate for as an industry. We compensate for diseases, but pleural plaques cannot be seen as a disease."

David Williams, AXA technical claims manager, said if passed the amendment would have been "disastrous".

MPs threw out the clause but commended Bridget Prentice, the minister responsible for driving the Compensation Bill through, for including an amendment on mesothelioma claims.

This overturns the Barker ruling that required mesothelioma claimants to recover from all liable parties rather than one.

Under the proposed law, claimants and insurers seeking financial redress from insolvent insurers will now be able to claim from the Financial Services Compensation Scheme (FSCS).

The FSA will be given the power to determine what proportion of the compensation the insurer is able to claim back, by amending the FSCS regulations.

Although dissatisfied about the return to the law pre-Barker, Jacobs said the ABI would now seek to speed up the compensation system.

"We still think the compensation system could be much faster. Speeding things up will bring down the legal costs," he said.

It was decided that establishing a mesothelioma compensation board to oversee the system would be premature, but it has not been ruled out entirely.

It is understood the board would be used to liaise between the ABI and FSA to enable speedy payments and settle disputes.

Jacobs added: "We would like to see a tariff of payments for mesothelioma sufferers which would cut the amount of time taken to settle."

Insurers have been asked by the Department for Constitutional Affairs to give their responses to the Bill's finer details.

Meanwhile, following the third reading, the Bill will go to the House of Lords, before returning to the House of Commons ready for Royal Assent before Parliament's summer recess.

' Insurance Times Future of Personal Injury Claims conference pages I-VIII