Historically compensation programs for asbestos victims have constantly evolved. One of the leading efforts to reform payments for victims has emerged in the United Kingdom. While the City of London continue to maintain in depth effort for employee safety and health to limit asbestos exposure and restrict disease support groups there maintain a close vigilance such as the Asbestos Victims Support Groups Forum UK [AVSGFUK]. The following article is authored by Tony Whilston, Chair of the AVSGFUK.
Asbestos victims and their representatives have welcomed the Mesothelioma Bill. After all, it is the first attempt to remedy a long-standing injustice. But, on close examination, it is a gift to insurers who could not indefinitely hide behind their own failures and evade liability for insurance they wrote for so many years. The day of reckoning has come, but at great cost to asbestos victims and with a great discount to insurers. It is in examining the detail of the payment scheme that the true cost to asbestos victims is found. This article sets out the main elements of the scheme and then discusses the Government's rationale for its generosity to insurers.
Background
For decades, insurers wantonly destroyed or simply lost records of employers' liability insurance – insurance which victims of very long latent asbestos diseases, such as mesothelioma, would later come to rely on long after the companies who exposed them to asbestos had ceased trading. Unmoved by the suffering and incalculable loss of life caused by asbestos, insurers persistently refused to accept responsibility for their failure to retain records and turned their backs on dying asbestos victims, who searched in vain for evidence of insurance which might provide some security for the families they would leave behind.
At last, in February 2010, the Labour Government consulted on measures to remedy this gross injustice with a recommendation to set up an Employers' Liability Insurance Bureau (ELIB), similar to the Motor Insurance Bureau (MIB) which pays compensation in the event negligent drivers are uninsured or insurance cannot be traced. The consultation closed in May 2010 and responsibility for responding to the consultation fell to the Coalition Government Minister, Lord Freud. Two years later, on the 25 July 2012, Lord Freud announced his response.
The Mesothelioma Bill and the Diffuse Mesothelioma Payment Scheme
Instead of creating an ELIB, the Government has drafted the Mesothelioma Bill to set up a Diffuse Mesothelioma Payment Scheme (Payment Scheme), funded from a levy on active insurers, which will pay discounted average compensation based on age to mesothelioma sufferers who were diagnosed on or after 25 July 2012. The Bill commenced in the House of Lords where the discounted payment of 70% of average compensation was increased to 75%. The Bill has now commenced its passage through the House of Commons. Royal assent is expected to be given in April 2014 and payments are set to commence in summer 2014.
It is estimated that approximately 3,500 payments will be made by 2024 at a cost of £322 million. Although average compensation in 2012 was £154,000, due to the increasing age of claimants it is expected that average litigated settlements over the first ten years of the scheme will be £124,286. At 75% of this figure, the average scheme payment would be £93,214. However, benefits and lump sum payments would be deducted in full, at an average deduction of £20,480, reducing the average payment to £72,734.
The levy will be collected by the Department of Work and Pensions (DWP) and treated as a hypothecated tax, i.e. public money. Dependants may claim under the scheme, but unlike claims in law, no payment will be made to the deceased's estate if there are no dependants. However, the scheme applies common law rules for recovery of benefits. Peers challenged the Government's very selective application of common law rules, but to no avail.
Fifty per cent of asbestos victims are excluded from the scheme, which is limited to mesothelioma sufferers only, even though it would only increase the cost by 20% to include all asbestos victims. Despite the fact that it took two years to respond to the consultation, the Government has refused to accept the modest request to set the eligibility date at the commencement of the consultation, 10 February 2010.
The scheme excludes claims for negligent environmental exposures and contaminated work clothes exposures, and claims from the self-employed. Turner & Newall (T&N) claimants, who are not protected by T&N insurance and are paid just 27% of tariff payments from T&N scheme funds, are also excluded.
The payment scheme is the result of two years' negotiation with insurers held behind closed doors in which insurers drove a hard a bargain, reducing scheme benefits well below the limit of acceptability. With threats of court action and utter intransigence, insurers have bullied and faced down the Government, thereby gaining an overwhelming advantage.
The Government expects to receive £71 million in recovered benefits and lump sum payments in the period 2014 to 2024, of which £17 million is to be given as a gift to insurers to help them out. This is a gift; it is not to be paid back. The Government is also lending insurers £30 million to help to “smooth” the first four years when there will be a spike in claims due to claims coming forward from 25 July 2012. This money will be paid back in years six and seven.
The insurers have insisted that they will pass on levy costs to businesses if the levy exceeds 3% of the annual amount they receive from employers' liability premiums, i.e. Gross Working Premium (GWP). They argue that anything over a 70% payment will exceed 3% GWP. The Government has disputed the insurers' estimates and their figures show that over the initial 10 years of the scheme, 100% compensation could be paid without exceeding 3% GWP. Nevertheless, the Government has accepted the insurers' estimates and the arbitrary 3% threshold and have pledged not to levy insurers above 3% GWP.
For the first four years of the scheme (2014-2018) insurers will have to meet the cost of claims, but the DWP will fund any cost in excess of 3% GWP. After the first four years, the DWP will have to estimate the annual cost of claims and set the levy accordingly. Any shortfall in the levy is the DWP's responsibility and any surplus will be paid into the Government Consolidated Fund. If the estimated levy payment is above 3% GWP the DWP will pay the excess, not the insurers.
Discussion
The Government justifies its concessions to insurers saying the insurers paying the levy are not necessarily the ones who took the premiums paying for untraceable historical policies so they have to be fair to them. But insurers should take collective responsibility for their collective failure. If this is “rough justice” it is nothing compared to the injustice suffered by asbestos victims.
We should be clear about where responsibility lies. The Financial Services Authority (now the FCA) described the long-standing problem of untraced insurance as “… a situation where insurers/policyholders are inappropriately subsidised by claimants ….” According to the Mesothelioma Bill Impact Assessment an estimated 6,000 mesothelioma sufferers have lost approximately £800 million in compensation due to untraced insurance. That is the extent to which mesothelioma sufferers have subsidised insurers. If one includes other asbestos victims we find that asbestos victims have subsidised insurers to the tune of £1 billion. In the face of such financial loss, not to speak of the loss of life, does fairness lie in mesothelioma sufferers continuing to subsidise insurers by 25% and other asbestos victims subsidising them by 100%?
Notwithstanding the Government's uncritical acceptance of the insurers' 3% GWP threshold, there is no certainty whatsoever that insurers will not pass on the cost to businesses at any level of GWP. The Government should not give way to threats of this sort, and certainly should not use taxpayers' money to subsidise insurers in the event of the levy exceeding the insurers' convenient 3% threshold. We have come to a pretty pass when dying asbestos victims are called on to absorb insurers' cost to protect business!
In the face of an obdurate, litigious and self-serving insurance industry, Lord Freud has negotiated a scheme at too great a cost to mesothelioma sufferers. Asbestos victims are entitled to 100% justice. We are asking everyone who is concerned about justice for asbestos victims to write to their MPs asking them to improve the Bill for mesothelioma sufferers and to give a commitment to include victims of other asbestos diseases in the scheme in the future.
Monday, March 4, 2013
Friday, March 1, 2013
Norfolk Southern Railway Co. ordered by US Labor Department's OSHA to pay $1.1 million after terminating 3 workers for reporting injuries
Norfolk Southern Railway Co. has been ordered to pay $1,121,099 to three workers following an investigation by the U.S. Department of Labor's Occupational Safety and Health Administration, which found that the company violated the whistleblower provisions of the Federal Railroad Safety Act. Two investigations, conducted by OSHA staff in Chicago and Pittsburgh, found that three employees were wrongfully fired for reporting workplace injuries. In addition to monetary remedies, the company has been ordered to expunge the disciplinary records of the three whistleblowers, post a notice regarding employees' whistleblower protection rights under the FRSA and train workers on these rights.
Railroad carriers are subject to the FRSA, which protects employees who report violations of any federal law, rule or regulation relating to railroad safety or security, or who engage in other protected activities.
"The Labor Department continues to find serious whistleblower violations at Norfolk Southern, and we will be steadfast in our defense of a worker's right to a safe job – including his or her right to report injuries," said acting Secretary of Labor Seth D. Harris. "When workers can't report safety concerns on the job without fear of retaliation, worker safety and health suffer, which costs working families and businesses alike."
Thursday, February 28, 2013
California, Workers' Compensation and The Nuclear Option
There has been a call among eminent commentators
in California to invoke “The Nuclear Option,” abolishment of the Workers’
Compensation Act entirely. The
suggestion was aired in response to proposed legislation (AB
1309) that would implement a statutory limitation on extraterritorial
coverage for professional athletes and reflects a trend to emasculate the
benefit program by incremental “take backs.”
An analysis demonstrates that the law, proposed by
California Insurance Committee Chairman Henry
Peres (D-Fresno), may indeed be the triggering mechanism to implode the
entire system both in California and in the Nation. It may very well be the
sentinel event.
California has had a logarithmically problematic workers’
compensation program for at least the past 3 decades. It has been literally a
political football. The promise to provide a simple, economically conservative
and expeditious administrative system of benefits has turned into an outright
nightmare. Both labor and Industry have tried, to no avail, to meet those noble
goals against a tide of crippling economic downturn, new and costly medical
modalities, waves of emerging occupational diseases, and an onslaught of
outside vendors who are “eating the lunch” of the system.
E-Filing Is A Good Thing
Workers' Compensation attorneys need to adapt to new technology. A case in point is electronic filing.
Two jurisdictions recently have sparked efforts for adaptation to new procedures designed to implement more expeditious and cost savings measures.
Over fifty years ago, there was a sit-com on TV, The Bob Cummings Show. The program mocked a GrandPa's ability to adopt to new technology. The aging parent used gifts of an electric blanket as a bread warmer, and an electric rotisserie as a sock dryer.
NJ has adopted e-filing of motion practice that speeds docketing and service of pleadings in the vast majority of cases. While not mirroring the stellar Federal Court Case Management Electronic Filing System with compete exhibit PDF submissions permitted, it does make major improvements to the process.
Florida has reported, that despite offerring an e-filing, parties are still entrenched in their old and wasteful habits of using USPS Certified Mail for process.
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| The Bob Cummings Show January 2, 1955 to September 15, 1959 |
Over fifty years ago, there was a sit-com on TV, The Bob Cummings Show. The program mocked a GrandPa's ability to adopt to new technology. The aging parent used gifts of an electric blanket as a bread warmer, and an electric rotisserie as a sock dryer.
NJ has adopted e-filing of motion practice that speeds docketing and service of pleadings in the vast majority of cases. While not mirroring the stellar Federal Court Case Management Electronic Filing System with compete exhibit PDF submissions permitted, it does make major improvements to the process.
Florida has reported, that despite offerring an e-filing, parties are still entrenched in their old and wasteful habits of using USPS Certified Mail for process.
Wednesday, February 27, 2013
Knee Replacement Medical Device Recalled
The US Food and Drug Administration (FDA) has notified healthcare professionals of a Class I recall of the LPS Diaphyseal Sleeve, a manufactured medical device used in human knee replacement surgery.
It has been found that The LPS Diaphyseal Sleeve to Diaphyseal Sleeve Base taper connection may not be sufficient to accommodate potential physiologic loads that may be transferred to the junction during normal gait activities by some patients. This may result in fracture of the sleeve at the taper joint which may also lead to loss of function or loss of limb, infection, compromised soft tissue or death.
It has been found that The LPS Diaphyseal Sleeve to Diaphyseal Sleeve Base taper connection may not be sufficient to accommodate potential physiologic loads that may be transferred to the junction during normal gait activities by some patients. This may result in fracture of the sleeve at the taper joint which may also lead to loss of function or loss of limb, infection, compromised soft tissue or death.
The device was manufactured by: DePuy Orthopaedic, Inc, a company owned by Johnson and Johnson.
Thursday, February 21, 2013
Out-of-State Work-Related Injuries: What You Need to Know
Today's post comes from guest author Brian M. Wright from Causey Law Firm of the State of Washington
In all of the above scenarios, you may have the ability to file your claim in multiple states. Generally, you will have the option of filing in:
1) the state in which you were injured;
2) the state in which you primarily worked; and
3) the state in which you entered into your employment contract.
If you are injured outside Washington, or whatever state in which you normally work, it is important to evaluate your options and file wherever you might have a legitimate claim. It is possible that you have remedies available to you in more than one state.
EPA Fines Arizona School Districts for Asbestos Violation
The U.S. Environmental Protection Agency has fined six Arizona school districts a combined total of $94,575 for Asbestos Hazard Emergency Response Act (AHERA) violations. More than 15,000 children attend the 25 schools not in compliance with the federal AHERA in these districts.
During inspections conducted in 2011, EPA inspectors discovered numerous violations, from failing to inspect facilities for asbestos containing materials, failing to re-inspect campuses with known asbestos containing materials, and failing to have an Asbestos Management Plan. All of the school districts have since taken necessary actions to comply with the law, with the cost of compliance reducing the penalties in most cases to zero.
“Asbestos in schools has the potential to harm the health of students, teachers, and maintenance workers,” said Jared Blumenfeld, EPA’s Regional Administrator for the Pacific Southwest. “EPA takes these violations seriously, and we are satisfied the schools have now conducted inspections and put their asbestos plans in place.”
Each school district is allowed to subtract properly documented costs of complying with the regulations from the penalty amount. The six school districts are:
· Apache Junction Unified School District (Pinal County): fined $21,675, but this was reduced to $7,933 because of the school district’s cost of achieving compliance.
· St. John’s Unified School District (Apache County): fined $14,195, reduced to $824 by the school district’s cost of achieving compliance.
· Florence Unified School District (Pinal County): fined $31,705, but no cash payment was due because the documented costs of compliance exceeded the penalty.
· Vernon Elementary School District (Apache County): fined $2,700, but no cash payment was due because the documented costs of compliance exceeded the penalty.
· McNary Elementary School District (Fort Apache Indian Reservation): fined $14,200, but no cash payment was due because the documented costs of compliance exceeded the penalty.
· Round Valley Unified School District (Apache County): fined $10,100, but no cash payment was due because the documented costs of compliance exceeded the penalty.
Federal law requires schools to conduct an initial inspection using accredited inspectors to determine if asbestos-containing building material is present and develop a management plan to address the asbestos materials found in the school buildings. Schools are also required to appoint a designated person who is trained to oversee asbestos activities and ensure compliance with federal regulations. Finally, schools must conduct periodic surveillance and re-inspections of asbestos-containing building material, properly train the maintenance and custodial staff, and maintain records in the management plan.
Local education agencies must keep an updated copy of the management plan in its administrative office and at the school which must be made available for inspection by parents, teachers, and the general public.
For over 3 decades the Law Offices of Jon L. Gelman 1.973.696.7900 jon@gelmans.com have been representing injured workers and their families who have suffered occupational accidents and illnesses.
“Asbestos in schools has the potential to harm the health of students, teachers, and maintenance workers,” said Jared Blumenfeld, EPA’s Regional Administrator for the Pacific Southwest. “EPA takes these violations seriously, and we are satisfied the schools have now conducted inspections and put their asbestos plans in place.”
Each school district is allowed to subtract properly documented costs of complying with the regulations from the penalty amount. The six school districts are:
· Apache Junction Unified School District (Pinal County): fined $21,675, but this was reduced to $7,933 because of the school district’s cost of achieving compliance.
· St. John’s Unified School District (Apache County): fined $14,195, reduced to $824 by the school district’s cost of achieving compliance.
· Florence Unified School District (Pinal County): fined $31,705, but no cash payment was due because the documented costs of compliance exceeded the penalty.
· Vernon Elementary School District (Apache County): fined $2,700, but no cash payment was due because the documented costs of compliance exceeded the penalty.
· McNary Elementary School District (Fort Apache Indian Reservation): fined $14,200, but no cash payment was due because the documented costs of compliance exceeded the penalty.
· Round Valley Unified School District (Apache County): fined $10,100, but no cash payment was due because the documented costs of compliance exceeded the penalty.
Federal law requires schools to conduct an initial inspection using accredited inspectors to determine if asbestos-containing building material is present and develop a management plan to address the asbestos materials found in the school buildings. Schools are also required to appoint a designated person who is trained to oversee asbestos activities and ensure compliance with federal regulations. Finally, schools must conduct periodic surveillance and re-inspections of asbestos-containing building material, properly train the maintenance and custodial staff, and maintain records in the management plan.
Local education agencies must keep an updated copy of the management plan in its administrative office and at the school which must be made available for inspection by parents, teachers, and the general public.
For over 3 decades the Law Offices of Jon L. Gelman 1.973.696.7900 jon@gelmans.com have been representing injured workers and their families who have suffered occupational accidents and illnesses.
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