Four years certainly seems a remarkably short period over which to cost the scheme, given the many decades over which the industry expects it to continue. It is a concern—one that we will discuss further in Committee—that the figures seem to have changed since the Bill moved from the Lords to the Commons, and changed back again, in a manner that might be said to favour a particular outcome that suits the industry. We will want to question that in more detail when considering the range of figures being presented.
While the Bill has been proceeding, the Ministry of Justice has been consulting on its proposals to expedite and streamline the process for taking legal action, and to introduce fixed fees for mesothelioma cases, and we have real concerns about the MOJ’s plans for the fate of the scheme before us. Evidence suggests that fixed fees are likely to exert a downward pressure on the level of civil damages, notwithstanding the 10% uplift in damages that has not yet been applied to mesothelioma suffers under the Legal Aid, Sentencing and Punishment of Offenders Act 2012. Indeed, our suspicions are borne out by the view of the insurance industry that this Bill and the MOJ process should be seen as part of a single package.
I recognise that the Minister cannot answer for changes that the MOJ will make to court rules, but it is of concern that there will be no parliamentary scrutiny of those changes. I warn him that as the Bill proceeds we will seek assurances that the MOJ’s actions will not adversely affect the scheme in the Bill. Moreover we should remember that these already quite meagre payouts, which are already to be reduced by benefits recovery, will be further depleted by legal fees and fees for medical certificates. We are anxious that the deal looks less and less good for sufferers, and we will return to those points in Committee.
As has been noted, hundreds of sufferers will lose out because the scheme does not take effect until 25 July 2012, which was when the Government published their response to the consultation set up in 2010 under Labour. Although I recognise the time spent by Ministers in detailed negotiations with the industry, we must recognise that between February 2010 when the consultation opened and July 2012, more than 700 people will have died without access to justice. We therefore believe there is a strong argument for the earlier start date of February 2010, and we do not think it credible to suggest that an industry whose very purpose and lifeblood is the anticipation and management of potential risk has not been preparing for the likely introduction of a scheme such as this since the date of the initial consultation.
As the debate in the House of Lords exposed, this is not a matter of insurers reserving policy—I accept that a more rigorous framework might apply to provision for risk—but a simple matter of business planning. Surely it would have been prudent for insurers to have assumed from 2010 that there would be a payment system with which they would be required to comply, and to have made provision for best and worst-case scenarios. That, too, is a matter we expect to explore further in Committee.
I am sure the Minister will assert that there is a cost to the industry of an earlier start date, and I hope we will have some definitive figures for that. Lord Freud said the costs at 100% of civil damages would be £119 million, and he undertook to calculate figures at the lower percentage—then 70%—introduced by this
scheme. It would be helpful to know from the Minister before we go into Committee what progress has been made with those calculations at the level now proposed of 75%.