Scottish Bill to recover medical costs of asbestos disease from insurers comes under fire

The Recovery of Medical Costs for Asbestos Diseases (Scotland) Bill intends to place the claims from victims of asbestos disease on an equal footing with those of accident victims. The proposals would also allow the retroactive extension of the terms of insurance policies to recover treatment costs for those suffering from mesothelioma. But the International Underwriting Association (IUA) this week warned that the rule changes would breach the rights of insurance companies, drive up the costs of insurance and could prove unlawful. The IUA's position is backed up by business law firm DWF. Chris Jones, Director of Market Services at the IUA, said: "Insurers cannot be expected to meet costs that are not within the original policy terms. This is an abuse of the contractual process. Assessing general liability risks and premiums is a complex process and underwriters consider carefully the scope of cover which will dictate the price charged."hideMr Jones added: "The UK market for liability insurance is highly competitive and extending the terms of existing contracts would inevitably add significant costs for insurers which would ultimately be reflected in the costs of future policies." The Scottish Bill would lead to over-burdening costs on insurers and delay the claims process, said DWF. It would do ‘little or nothing’ to improve the overall care services for asbestos victims, added the legal firm. Derek Adamson, DWF Partner and Head of Occupational Health and Casualty, said: "We believe the proposal could in fact worsen the position of mesothelioma victims. In recent years there has been a drive to improve efficiency in asbestos related disease claims handling. The practical difficulties which will be encountered in operating the proposed scheme will undoubtedly add further layers into the claims process and inevitably slow it down." He went on: "The other main aim of the proposal is to ensure that finances are recouped by the NHS on the basis that it is not fair that the financial burden of providing that cost should rest on the taxpayer when compensators are well insured. This fails to take into account that this proposal would rewrite the nature of the employer's liability and would burden the defendants and their insurers with a liability which was never foreseen when the policies were sold and paid for decades ago." Critics of the Bill also argue that it is potentially unlawful because such law changes do fall under the remit of the Scottish Parliament. They point out that earlier this year the UK’s Supreme Court decided on the referral of the Asbestos Diseases (Wales) Bill by the Counsel General of Wales and found that the proposed legislation on recovery of medical costs fell outside the competency of the Welsh Assembly. Mr Adamson said: "We anticipate that the proposal will raise potential jurisdictional issues in relation to insurance law, similar to those highlighted by Lord Mance delivering the judgement of the majority in the recent Supreme Court decision on the referral of the Asbestos Diseases (Wales) Bill." The IUA believes that any changes in this area of law should be conducted on a UK-wide basis. "Unilateral action by Scottish legislators would lead to commercial terms being dictated by postcode rather than the underlying risk factors of insurance meaning Scottish customers could well be disadvantaged by facing higher premiums," said Mr Jones.

Scottish Bill to recover medical costs of asbestos disease from insurers comes under fire

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