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The government is increasing payments from £115,000 to £123,000 for new compensation scheme starting in April.

Victims of the fatal asbestos-induced cancer mesothelioma who can’t trace a liable employer or an employers’ liability insurer will soon be able to apply for compensation packages worth an average of £123,000. The government has increased this from the initial £115,000 debated in the House of Commons in January after making savings in the administration costs of the scheme.

Around 3,500 victims of the aggressive cancer or their families can apply for compensation from next month and will receive a payment of around £123,000 from July this year, as part of a £380 million package.

Mesothelioma, which often takes 40 to 50 years to present symptoms after exposure to asbestos, has resulted in over 300 people every year struggling to find a relevant party to sue for damages, because companies become insolvent or insurance records go missing.

Work and Pensions Minister, Mike Penning said:

The Mesothelioma Act was passed in January and allowed for the creation of a new package of support – funded by insurance firms – to pay in excess of 800 eligible people in 2014 and 300 every year after that, until 2024. Victims, or their dependents (where the sufferer has died), will receive substantially higher payments than the statutory schemes currently operated by government. They will also get an additional £7,000 towards legal expenses.

The claims handling company Gallagher Bassett has been appointed to run the compensation scheme.

More information

The government has increased payments from around £115,000 (75% of average civil damages) to around £123,000 (80% of average civil damages). This ensures the scheme pays as much as possible to mesothelioma victims without risking insurers passing the additional costs onto businesses through increased insurance premiums.

On top of the payments applicants will receive from the scheme, the scheme will pay £7,000 towards legal fees. The applicant will be paid this amount directly with their scheme payment, not to lawyers. The scheme has been designed to accept direct applications from applicants, to enable people to apply without the aid of a solicitor. In these cases, the individual would retain the £7,000 in legal fees.

Any benefits or lump sum payments received from the government previously in respect of the disease will be deducted from the final payment.

DWP research estimates that 300 applications per year will be paid by the scheme and that this number will drop slowly over time.

Mesothelioma is a cancer of the lining of internal organs, such as the lungs, and almost always arises from exposure to asbestos. Life expectancy from diagnosis is 8 to 9 months on average. The long time that mesothelioma takes to develop – sometimes 40 to 50 years after exposure before symptoms appear – means that some workers were negligently exposed to asbestos at work but their employers are no longer in existence to make a claim against. Insurance records from the time are also often incomplete.

The new scheme will pay those who develop diffuse mesothelioma as a result of negligent exposure to asbestos at work and are unable to claim compensation because they cannot trace a liable employer or employers’ liability insurer. The scheme applies to people diagnosed with mesothelioma from 25 July 2012.

In April 2011, the Association of British Insurers voluntarily established the Employers’ Liability Tracing Office (ELTO) – an electronic database of employers’ liability insurance policies to which 99% of employers liability insurers’ provide data.

Asbestos prohibition laws in the United Kingdom were first introduced in the mid-1980s. In 1985, the UK banned the import and use of both blue (crocidolite) and brown (amosite) asbestos. This rule was replaced in 1992 with a law that also banned some uses of white (chrysotile) asbestos – traditionally considered less lethal than the other forms of the mineral. In 1999, the government decided, with no exceptions, to ban the use and import of chrysotile asbestos.

Other asbestos-related laws passed during the 1990s stipulated that work on any asbestos insulation products (removal, etc.) may only be carried out by a licensed asbestos professional. Asbestos-at-work regulations have set maximum exposure limits and require that all asbestos be identified and managed properly. Regulations also require that employees at risk for asbestos exposure be trained in asbestos safety precautions.

DWP currently operate 2 schemes to make payments to people who contract mesothelioma:

See also the impact assessment about proposals to set up a payment scheme for people with diffuse mesothelioma

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