Delay pain over plaques

Why the delay? In a situation that is becoming all too familiar to the insurance world, the Government is dragging its heels once again on a major issue. The industry was promised a decision before MPs' holidays started on Tuesday, but now Jack Straw says a decision will not be made on pleural plaques compensation until after the recess on October 21. It wouldn’t be surprising if judgement day was postponed until after the general election.

Straw has kept tight-lipped over reasons for the delay, but there could be several reasons. Firstly, plaques is hardly a vote winner. If the Government turns down compensation, it’s not going to impress voters – many in former ship-building and manufacturing Labour-strongholds – who are keen to see some sort of redress.

On the other hand, approving compensation for pleural plaques could prove very costly for both the Government and insurers. Loss adjusters Garwyn estimate the cost of compensating pleural plaques anywhere between £3.7bn and £29bn. These are huge numbers. What damaging effect could it have on an insurance industry just beginning to recover from battered investment portfolio’s in the wake of the financial crisis?

In a nightmare scenario, there has even been talk of ‘scan vans’ touring the country, aiming for medical check ups on workers in shipbuilding and manufacturing who may have some scarring on the lungs from plaques.

The Ministry of Defence could face huge claims from former shipyard workers claiming their health has been damaged. The Government is caught in between a rock and a hard place.

However, the sooner it comes to a decision the better for both plaque sufferers and insurers.

One interesting point about Straw’s speech is his pledge to set up a National Centre for Asbestos Related Diseases, a register for pleural plaques sufferers and quicker payments for mesothelioma victims.

Solicitors are urging the Government to press ahead with Employers’ Liability Insurers Bureau (ELIB) – effectively a funding pot from both insurers and the Government to compensate sufferers who cannot trace former employers. It’s bread winner for personal injury lawyers, but hardly something insurers want to see created.