Mesothelioma, success fees and ATE insurance

Another of the anomalies relating to the piecemeal introduction of the Jackson reforms is the treatment of those bringing claims for mesothelioma.

A policy decision has been made to postpone the end to recoverability of success fees and ATE premiums in these cases. The government explained, when announcing this decision: “Rather, we will implement the clauses in respect of those claims at a later date, once we are satisfied on the way forward for those who are unable to trace their employer’s insurer. The amendment commits the Lord Chancellor to carrying out a review of the likely effect of the clauses in relation to mesothelioma proceedings and to publish a report before those clauses are implemented.”

Putting aside any arguments as to whether this category of claim is sufficiently unique to justify this exception, the issue that arises is how this operates with the other reforms that are due to come into force in April 2013.

The Court of Appeal has announced that all personal injury claims settled after April 2013 (unless a CFA had been entered into and work commenced before that date) will attract a 10% increase in general damages. This is to compensate claimants for being unable to recover success fees after that date. It therefore appears that mesothelioma claimants will benefit from the 10% increase despite still being able to recover a success fee.

Qualified one-way costs shifting (QOCS) is also due to be implemented in April 2013 in personal injury claims. Although I do not believe the final rules have been published as yet, it seems unlikely that an exception will be made for mesothelioma claimants. QOCS is designed to compensate claimants for the fact they will be unable to recover ATE premiums in the future. However, mesothelioma claimants will still be able to recover ATE premiums. Although they will not need ATE cover in respect of losing on liability if they benefit from QOCS, they will be able to recover the costs of ATE cover to protect them against failing to beat Part 36 offers. Lord Justice Jackson’s view was that Part 36 offers should “trump” QOCS. It therefore appears that mesothelioma claimants will be able to recover the costs of ATE policies to protect them against the risks of rejecting reasonable offers in circumstances where other seriously ill claimants will not. It is not obvious why this should be necessary in the context of possible difficulties locating employers’ insurers.

Don’t get me wrong. I wouldn’t wish mesothelioma on my worst enemy and it may be thought that a modest increase in general damages and the occasional anomaly in their treatment is of limited consolation for sufferers and their families. I simply highlight this as being another example of what I am sure to be the unintended consequences of the piecemeal introduction of the Jackson reforms.

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