More Information on Industrial Injury Claims
Recent reports in the media have again highlighted the difficulty that industrial disease victims face in tracking down the insurance company of their former employers. Industrial diseases can take decades to develop, and this often presents problems in bringing a compensation claim where the injured party’s previous employer has ceased trading since the disease was originally contracted. Normally in this situation the solicitor handling the claim will attempt to trace the former employer’s insurance company and the associated liability policy (EL). Often however due to the passage of time records have been lost, destroyed or the policy never existed in the first place. Where this is the case it is impossible to proceed with a compensation claim.
A voluntary code of practice was established in 1999 to assist in tracing such policies, but has met with extremely limited success. Critics point to a potential conflict of interest in the fact that the scheme is administered by the Association of British Insurers (ABI). As the president of the Association of Personal Injury Lawyers (APIL), Muiris Lyons, has commented:
‘The current tracing system, administered by the ABI (the Association of British Insurers) just does not work.’
APIL, solicitors firms and campaigners are pressing for a new two pronged strategy to combat the problem. Firstly they would like to see a goverment-administered Employers’ Liability Tracing Office set up, featuring a compulsory electronic database of EL policies. Secondly a government fund of last resort would be established to compensate injured persons in cases where tracing the relevant insurance company has proved impossible. This fund would be financed via a levy on insurance companies. The Department for Work and Pensions has already backed these ideas in a consultation which concluded last month. The issue is how quickly such plans can be implemented, and whether or not the insurance industry will press for a continued role or alternatively attempt to delay or dilute the effectiveness of the proposed policies. Insurers object in principle to the idea of financing last resort compensation awards, claiming it would provide a disincentive for companies to take out Employers Liability policies, and increase such premiums generally. Nick Starling, the ABI’s director of general insurance and health, commented:
‘Such a fund could encourage firms to break the law and not take out this cover, knowing that there is a fund to compensate. In short, there is a serious moral hazard in this proposal.’
Opposing this perceived moral hazard are the real, devastating effects that industrial diseases are imposing on former workers and their families. Mesothelioma, the fatal lung cancer contracted from previous exposure to asbestos fibres normally proves fatal within 2 years. Thousands of families have lost loved ones to this disease, and yet have received no financial compensation from those ultimately responsible. To most impartial observers confronted by this grim reality, the objections of the insurance industry must surely pale into insignificance.
More Information on Industrial Injury Claims
