ABI Scheme Not working
In the wake of the Barker v Corus decision of the House of Lords the Department for Work and Pensions (DWP) is conducting a review of the operation of the Association of British Insurers’ (ABI) scheme for tracing insurers.
The purpose of the scheme is to help victims of industrial disease trace their employers’ insurers when the employers themselves have gone out of business. The Association of Personal Injury Lawyers (APIL) has frequently criticised the scheme, most recently in response to a press release from the ABI, and has called on members for information about the effectiveness of the scheme.
"Our experience is that the ABI scheme is simply not working.
In most mesothelioma claims we can find at least one insurer or solvent employer and up until recently we have been to obtain full compensation in those cases. But there have always been some cases where we could not find any solvent employer and we did not know any insurer. In that minority of cases our clients have had to rely on the ABI scheme and they have been badly let down. The ABI’s own figures state that three quarters of enquiries are unsuccessful, leaving those victims and their bereaved families with no compensation. This is particularly galling because this insurance has been compulsory since 1972 and was widespread for decades beforehand – the ABI Scheme is failing to identify insurance that must have existed.
The operation of the ABI Scheme has been brought into focus by the decision of the House of Lords in Barker v Corus. As a result of this decision our clients now need to identify a full insurance history before they can recover full compensation. In many cases that is simply impossible. It is the insurers who are custodians of the records and yet they benefit financially when the records are incomplete. This conflict of interest is a recipe for injustice.
For those affected by the Barker decision and for those suffering from other asbestos diseases such as asbestosis or asbestos pleural diseases the only way to guarantee full compensation is by establishing an “insurer of last resort” similar to the Motor Insurers’ Bureau (MIB). This would either identify the relevant insurer or pay compensation out of a fund when the insurer couldn’t be traced or was itself insolvent. The Financial Services Compensation Scheme shows that an industry-wide levy is feasible and the successful operation of the MIB sets a precedent.
We will be supporting APIL in its campaign to establish an Employers Liability Insurance Bureau to replace the ABI Scheme."
If you would like to find out more information about our Personal Injury Practice, please visit our personal injury section. You can also find out about our experience and expertise in asbestos related claims.
For further information, please contact Andrew Morgan.