This post was written by Michael Rawlinson QC.
Given the number of different diseases with which it is associated, asbestos might reasonably be thought to be as versatile at killing the humans who inhaled it, as it was in meeting the perceived needs of British industry throughout the 20th Century. Perhaps the most frightening of asbestos’ manifestations is mesothelioma: the cancer of the linings of the chest and peritoneum. Until recently swift death following diagnosis was almost inevitable. However, consultant chest physicians have begun to express excitement regarding new therapies called immunotherapy/biological therapies (referred to collectively here as “immunotherapy”) when they have been applied to mesothelioma victims.
Mesothelioma victims referred to the correct Oncologist will be told that whilst immunotherapy is not right for everyone, it could be that their Mesothelioma may be stabilised by immunotherapy. Usually such therapy will only be applied once first line chemotherapy has been undertaken; but only if at that stage the victim’s health status is still otherwise good and only if they can afford it, because such therapy is not available on the NHS.
If you talk to an oncologist about the likely immunotherapy treatments to be given to a mesothelioma victim, you will be told about a large number of potential drugs. So far the most expensive of these is pembrolizumab (Keytruda) at around £120,000 per annum. Results from trials are emerging all the time and one cannot know what the landscape will be in even 2 years time. So a person who is given Keytruda today and who, as a result, is alive in 2 years time, may be well enough to transfer onto another therapy which is unproven today but which may by then be realised to yield great benefit.
There is a dilemma created for those advising both victims and insurers as a result of this medicine. Suppose you are acting for a victim who has just received a diagnosis and is very early in their treatment. Let us say that exposure and breach of duty are easily provable and all looks set fair for an early settlement. But what are you to do about immunotherapy? You cannot yet know whether the victim is suitable for such treatment and, even if they are, which drug(s) will be prescribed or at what cost or for how long?
Prima facie you have only two options: first to wait to see what is prescribed and then claim an interim payment for that amount or, second to guess. Neither is a very attractive option for either the victim or the lawyer. Equally unattractive to the insurer is an unfocussed claim for some estimated amount of damages (added without evidence) to every schedule of loss.
In recent months insurers have approached the problem by offering to make direct payments to the immunotherapy provider, on condition that the insurer’s own medico-legal expert has the right to say that the provision is not in the victim’s interest (and thereafter the insurer can seek a determination from the court that it may withdraw funding). There can be a place for such agreements but anyone who does so will need to satisfy themselves that two potential issues are being considered. First, that there are safeguards to prevent either the payer making deals with the provider over the head of the victim such that only a cheaper option is being paid for as opposed to a more expensive and experimental one which would otherwise be sanctioned by the treating oncologist if ‘money was no object’. Further, that there should be arrangements whereby the victim is informed when each payment is made so as to avoid any dispute arising between the insurer and the provider leading to the funds not being provided.
I was asked by Irwin Mitchell to look at this problem and it seemed to me that the best option was to seek to persuade insurers to enter into a Periodical Payment Order (“PPO”). Since a PPO is an open-ended commitment to make payments for as long as is needed and since an insurer could credibly argue that in its detail the situation we face neatly fits neither a stepped nor a variable PPO, why should any insurer enter into such an agreement voluntarily? The answer is that because such an agreement is, in the long run, a highly efficient method of dealing with the dilemma for insurers as well. If, upon proof by a Claimant that at the moment of settlement, there exists now a realistic chance that at some point in the future immunotherapy will be recommended, then an insurer who enters into a PPO agreement as part of an overall settlement acquires two very significant benefits:
- First, no case is ever delayed by waiting to see whether immunotherapy is provided and with what effect etc.
- Second, no payment is ever made by the insurer against the future risk that immunotherapy is to be provided if in fact no such immunotherapy is in fact never provided ie they will not have to add £50,000 to each claim to ‘buy off’ the risk of immunotherapy being provided at some nebulous point in the future.
Finally it might be recognised by insurers that there are two very powerful legal weapons lying in the hands of Claimants’ lawyers when one considers their ability to enforce payment from the tortfeasor for medical costs: The law is that, provided such treatment is recommended by a reputable relevant expert, then the cost of that treatment is recoverable even if it is unsuccessful. In reality, where the prize at stake is longer life or longer healthy life, then there will be very little short of the positively harmful which the Court will consider not have been reasonable to attempt. If a proposed treatment is reasonable then it is no defence for an insurer to say that it could either be obtained more cheaply in another way (Rialis) or that it is available on the NHS (s2(4) Law Reform (Personal Injury) Act 1948).
In a case in which I was instructed recently I was able to put the proposal of a PPO to an insurer. Last week the proposal was accepted. Our client in that case was Mr Scott. He wanted to keep the terms of his order which are not relevant to the PPO confidential and the Court has so ordered, but he did want his name attached to the draft model agreement and this was permitted by the Court: and so what follows is both a description of and the terms of a draft Scott agreement.
The essence of the agreement was as follows:
A Tomlin form of order was used. As usual, the interesting terms lay in the Schedule to the order.
- It was recited in the Schedule that there was accepted to exist now a realistic chance that at some stage in the future Mr Scott would require immunotherapy albeit no one could say when that time would be; which treatment would be given; for how long and at what cost.
- Irwin Mitchell would set up and administer a trust whose sole purpose is to receive and then pay to the provider the costs of immunotherapy provision (with associated expenses such as blood tests and scanning) as and when such payments were demanded by the provider and received from the insurer. In addition such travelling expenses as Mr Scott would incur would also be paid. This trust is to be administered at the insurer’s reasonable expense.
- The trigger for payments is the victim’s treating oncologist recommending immunotherapy. Once the insurers were made aware of that the trigger had occurred they will then pay £130,000 in quarterly instalments for as long as required. The figure alighted on was the figure for the provision of Keytruda. However a quid pro quo was agreed in that should the actual figure be less than that, a reverse indemnity would be provided (ie the IM Trust would repay to the insurer the money) and conversely should the treatment cost be higher then an additional ‘top up’ would be made by the insurer to the IM Trust. This would continue for as long as necessary but if the treatment stopped temporarily or otherwise changed the insurer would be informed and payments adjusted
- There was no future role within the agreement for any expert employed by the insurer. Thus there was no provision for second guessing or countermanding the treating oncologist’s recommendations. This was made clear by the following clause within the agreement: “For the avoidance of doubt the only ground upon which such objection can be taken by the Insurer is that the new sum does not actually represent the cost to be levied by the health provider to the Claimant. The Insurer shall not seek to argue that the continued provision of immunotherapy is rendered irrecoverable or unreasonable by reason of the fact or amount of the new sum”
Payments would cease at such time as either the treating Oncologist considered that immunotherapy should be stopped permanently or the patient sadly died. Any excess remaining in the Trust would be repaid to the insurers.
Any insurer who seeks to object that this agreement could not be ordered by the Court can be answered in one of three ways:
- The agreement does not in fact offend either the Damages Act 1996 nor CPR Part 41 nor yet the Damages (Variation of Periodical Payments) Order 2005/841;
- Alternatively, the Court could without fear of reasoned contradiction impose upon a defendant a variable PPO which was triggered by the worsening of the condition represented by the advance of the cancer after front line chemotherapy had been administered and at a fixed figure equivalent to the most expensive treatment envisaged: the model agreement we entered into is a far more benevolent regime to the insurer than such an approach.
- Finally, if the insurers really wish, victims can simply settle all parts of the claim except that for immunotherapy, adjourn and then make multiple applications for interim payments as and when for as long as they live; and that would not be a happy solution for anyone. Our agreement with the insurers in his case has provided peace of mind to the victim that any immunotherapy treatment will always be paid for as and when he needs it.
There is one final issue to consider. If the present agreement becomes widely adopted then there will grow a divide between those victims who possess good claims for compensation (and hence who can obtain immunotherapy via the Scott model agreement such as has been entered into in this case) and those victims who do not have such claims and are limited to making applications under the Diffuse Mesothelioma scheme (who cannot). Thus we quickly reach the highly uncomfortable position that whether a victim lives 12 months or 5 years may depend on the whether or not an insurer can be traced for his employment: a happenstance which is wholly out of the victim’s control and which essentially amounts to a lottery on life. Since the intention of the scheme was to award average damages to its applicants, the time has come to consider whether the scheme should also be expanded to include the facility to enter into such agreements as were entered into in this case. This will require additional capital of course.