The background to the Welsh bill was discussed in our article posted on 8 January 2015. A month later, the Supreme Court handed down its judgment. The proposed bill to allow Welsh Ministers to recover costs of NHS treatment from those compensating sufferers from asbestos related conditions was found to beyond the legislative competence of the Welsh Assembly and, in any event, in breach of the compensator's human rights.
The legislative competence of the Welsh Assembly is beyond the scope of this article. However, although the Scottish Parliament enjoys far greater legislative competence than its Welsh counterpart - everything bar the reserved matters are within the legislative competence of the Parliament - it is likely that the subject matter of the proposed Scottish bill would also be beyond the legislative competence of the Parliament.
Schedule 5 of the Scotland Act 1998 sets out reserved matters. Specific reservations are found in Part 2 of the Schedule and at Head A, fiscal and economic matters are reserved. More specifically, fiscal, economic and monetary policy, including the issue and circulation of money, taxes and excise duties, government borrowing and lending, control over United Kingdom public expenditure, the exchange rate and the Bank of England are all reserved matters. Insofar as funding the NHS is a matter of economic policy, it may be that the proposed bill will be regarded as a reserved matter. Social Security is another reserved matter listed under Head F in part 2 of the Schedule. Amongst the illustrations of Social Security Schemes given are, the recovery of benefits for accident, injury or disease from persons paying damages is specifically mentioned as an illustration of a reserved matter. The bill proposed by Mr McMillan envisages following the current scheme whereby compensators repay benefits (and NHS charges). Thus, it would seem to fall clearly within an illustration of what is a reserved matter, and therefore beyond the competence of the Scottish Parliament, at least for the moment.
Significantly, the Welsh bill also failed as being outside the legislative competence of the Welsh Assembly on the grounds that it was incompatible with the rights of compensators and insurers under Article 1, Protocol 1 of the European Convention on Human Rights to the Peaceful Enjoyment of their Possessions (A1 P1 Rights).
This was on the basis that the new financial liabilities of compensators and insurers would arise from asbestos exposure and liability insurance policies which long predated the bill. The retrospective effect of the bill required special justification which was absent in the case of this bill.
Legislation passed by the Scottish Parliament also has to be compliant with the A1 P1 Rights of compensators and insurers. The reasoning which defeated the Welsh bill would inevitably apply to its Scottish counterpart. Mr McMillan's bill may therefore have reached the end of the road.
The policy aim behind both bills may have been laudable. In times of austerity, providing additional funds to the NHS cannot to be seen as a bad thing. That said, singling out the insurers of the wide range of employers whose businesses used asbestos might be thought of as unfair. Other than their contributions through general taxation, the tobacco industry, the Scottish drinks industry and the food industry are not expected to meet the costs the NHS has to bear in connection with smoking related illnesses, alcoholism or obesity, for example.
As a footnote, those who think that making the compensators pay for asbestos related diseases is a good thing, may wish to consider the detail of the Health & Social Care, Community Health and Standards Act 2003, Part 3, which came into force in January 2007.
This act introduced a wider liability to pay NHS charges as a result of injury. Insurers in Road Traffic cases have had to repay NHS charges since 1999. The 2003 Act extended the provisions to a person who makes a compensation payment to or in respect of any other person in consequence of any injury, whether physical or psychological suffered by the injured person, where the injured person received NHS treatment at a health service hospital as a result of the injury and been provided with NHS ambulance services. That act brought in £11.6m to the Scottish NHS in the year to February 2015 and £172.9m to the UK as a whole. In the context of health spending in excess of £120 billion in the UK, that is not a huge contribution, but no doubt welcome.
Although Section 150 (5) of the 2003 Act states:-(5)“Injury” does not include any disease
Section150 (6) of the Act goes on to say:-Nothing in subsection (5) prevents this Part from applying to—(a) treatment received as a result of any disease suffered by the injured person, or(b) ambulance services provided as a result of any disease suffered by him,if the disease in question is attributable to the injury suffered by the injured person (and accordingly that treatment is received or those services are provided as a result of the injury).
It is well accepted that asbestos related diseases are caused by an injury. In the "trigger" litigation which was concerned with which insurers should indemnify employers of those who contracted mesothelioma (those whose policies covered the time of exposure to asbestos, or those at the time the disease became apparent, finding that those who were on cover at the time of exposure were liable), the Judge accepted that, on the question of injury, the weight of authority was that mesothelioma was not a disease or actionable until many years after fibres were first inhaled. The Judge accepted that there was no injury on inhalation and by inference, that injury occurred at a date around when symptoms developed.
Referring back to section 150(6) of the 2003 Act, it could be argued an asbestos related disease is attributable to injury. The injury would be the development of fibrosis in the lung, or a cancerous tumour, and the disease asbestosis or mesothelioma or lung cancer. If that analysis is correct, section 150(6) ought to apply and NHS charges be recoverable. However the explanatory notes in relation to that act make it clear that a 'free standing' disease, such as asbestosis, is excluded. A 'free standing ' disease might be difficult to identify. The example given of the broken leg, as a result of which septicaemia develops may help explain. In that situation, assuming compensation and hospital treatment for the broken leg, charges would have been payable, regardless of whether or not a disease developed. If the stay in hospital is extended because of septicaemia, then the amount of charges is increased.
In the case of an asbestos disease, compensation is not payable for the injury, but only for the disease which results and thus the exclusion applies.
It is perhaps a narrow distinction and arguably a distinction without a difference.
Whilst the Supreme Court's judgment in the reference by the Counsel General for Wales probably does mark the end of the road for Stuart McMillan's Bill, the road may fork in another somewhat unexpected direction.