Recent guidance on Diffuse Mesothelioma Payment Scheme

In this post Cressida Mawdesley-Thomas and Megan Griffiths look at DP v Topmark Claims Management Ltd (CM) [2020] UKUT 0106 (AAC), a recent decision of the Upper Tribunal on the interpretation of the Diffuse Mesothelioma Payment Scheme (“the Scheme”) introduced by the Mesothelioma Act 2014 (“the Act”). A precondition of accessing the Scheme is that a claim cannot and has not been brought against the employer or insurer “because they cannot be found or no longer exist or for any other reason”, per ss. 2(1)(d) and 3(1)(c) of the Act.  This appeal analysed the meaning of the phrase “any other reason” and found that being statute-barred did not come within its ambit.  

The Scheme 

The Scheme was introduced following a consultation in 2010 which identified the difficulties that those with diffuse mesothelioma faced as a result of the disease’s long latency period. The consultation identified that many people would not know that their exposure to asbestos at work had resulted in diffuse mesothelioma until decades after their exposure occurred. That delay would mean that their employers (and their employers’ EL insurers) may be untraceable or no longer in existence, preventing them from making a civil claim for damages. The Scheme was therefore created to specifically remedy the injustices associated with diffuse mesothelioma being a “long-tail” disease.

The issues for the Upper Tribunal and its decision

An application was made by the Appellant under the Scheme on behalf of an individual who had died of diffuse mesothelioma aged 37. The Appellant had previously consulted solicitors  with the view to bringing a civil claim prior to the expiry of the primary limitation, those solicitors declined to act on the grounds of lack of prospects. The Application under the Scheme was refused and subsequently appealed to the First-Tier Tribunal, where the appeal was itself refused. The Appellant was then granted permission to appeal to the Upper Tribunal. A second set of solicitors issued proceedings: limitation was raised as a defence by the defendant. The matter then came before the Upper Tribunal.

The central issue was whether the Appellant was entitled to compensation under the Scheme and if so, on what basis. In answering this question Upper Tribunal Judge Kate Markus QC made findings on the following:

  1. The relevant date for determination of the review / appeal;
  2. What constitutes “any other reason”; and
  3. Whether a person whose claim is statute-barred is “able to bring an action” for the purposes of the Act.

Relevant date for determination of review / appeal

It was held that the First-tier Tribunal should approach the appeal in the same way that the administrator did on review: it should take into account all relevant evidence available to it and determine eligibility in the light of the circumstances as at the date of its own determination. The First-tier tribunal did not do this and had incorrectly considered matters as they were at 24 March 2017 which was before the expiry of primary limitation. This was important to the Appellant’s case as by the time of the tribunal’s decision, limitation had expired. However, the Upper Tribunal Judge found that this error would only be material if limitation qualified as “any other reason” for being unable to bring a civil claim. 

Scheme eligibility: meaning of “any other reason

In order to claim under the Scheme as a person with diffuse mesothelioma, or as their dependant, one must fulfil the criteria set out in ss.2(1) and 3(1) respectively. The criterion in issue in DP was section 3(1)(c) (as mirrored by section 2(1)(d)): 

That no-one is able to bring a claim for damages against the employer or their insurer, “because they cannot be found or no longer exist or for any other reason”.

By virtue of section 18(3), the scheme administrator can specify what circumstances qualify under section 2(1)(d). The circumstances themselves are listed in Regulation 7(2): “…(such as being insolvent, in winding up proceedings or in liquidation) and there is no other employer or insurer who could be pursued in a civil claim”. However, this regulation does not specifically address the scope of the “any other reason” provision. 

The learned Judge addressed the meaning of “any other reason” at paragraphs 38 to 43 of her decision. Counsel for both parties agreed that the explanatory notes to the Bill were of assistance in determining Parliament’s drafting intention. Particular focus was placed on paragraph 26 which said: 

those conditions [in section 2(1)(d)] are set out in general terms because there are a number of different reasons why a person may be unable to bring proceedings … but it is very difficult to predict in advance what all those reasons may be and it would be very complex to try to do so.”

The learned Judge found that “the general words were inserted in order to guard against an unforeseen omission or to enable clarification, but not to extend the application of section 3(1)(c) to circumstances of a wholly different kind to the two specified reasons [‘cannot be found or no longer exist’]” [43]. Therefore, whilst the words were intentionally general to cover unforeseeable circumstances, these did not extend to any or all circumstances. They were intended to be limited to those relating to a tortfeasor and insurer’s inability to provide compensation and to be “coloured” by the two specified reasons (of being unable to be found or no longer existing) [43].

Whether being statute-barred rendered the applicant unable to bring a civil claim 

The learned Judge rejected the Appellant’s submission that expiry of primary limitation came within the meaning of “any other reason”. This was based in part on the fact that expiry of limitation is no bar to litigation if it is not pleaded by the defendant, and that even if it is, the claimant can raise section 33 of the Limitation Act 1980 in reply. These realities had also been recognised by the Court of Appeal in Richards v McKeown [2017] EWCA Civ 2374.  

Kate Markus QC also accepted the Respondent’s submissions that the opening words of section 3(1)(c) of the 2014 Act were concerned with the ability to bring a claim in the first place, not the merits or prospects of a claim: since limitation related to the latter not the former, issues associated with it were not intended to fall within the ambit of the provision. 

Comment

The decision highlights that the Act is aimed at remedying the ‘mischief’ caused by difficulties relating to the Defendant (such as being insolvent with no traceable insurance) as opposed to difficulties which relate to the Claimant (such as bringing a claim out of time). 

The Upper Tribunal’s interpretation of the scope of “any other reason” highlights that, whilst it is a general provision, it is not boundless. Any such reason must bear resemblance to those specified in the Act. However, the scope of the provision is still not certain: for example, the decision in DP does not address a situation where a potential defendant is solvent but in fact does not have sufficient funds to pay out a civil judgment and its insurer is untraceable. It is likely that difficult cases like this will be determined on a fact-specific basis, not least because of the complexity of predicting them in advance as recognised in the 2013 Explanatory Notes.

For legal practitioners this case also underlines the importance of bringing a civil action within the limitation period if there is a Defendant against whom a claim can be brought. It also serves as a reminder that the Scheme is not an alternative to a civil remedy where one is available: it was intended to be, and is, a scheme of last resort.

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