10 February 2015

Recovery of Medical Costs for Asbestos Diseases (Wales) Bill out with legislative competence & incompatible with European Convention on Human Rights.

On 9 February 2015, the Supreme Court held the Recovery of Medical Costs for Asbestos Diseases (Wales) Bill to be out with the legislative competence of the Welsh Assembly and incompatible with the rights of compensators under the European Convention on Human Rights (ECHR).

The Bill sought to make those liable for compensation payments made to victims of asbestos-related diseases liable to Welsh Ministers for the cost of NHS services provided to such victims. The Bill would have impacted all parties liable for compensating victims of asbestos-related disease including: insurers, local authorities and health boards.

The five judge bench, by majority, held the Bill to be out with the legislative competence of the Welsh assembly regarding their devolved powers for the “organisation and funding of [the] national health service” under the Government of Wales Act 2006 section 108(4)-(5) and paragraph 9 of Part 1 of Schedule 7.

However, most notably, the Bill was held to be incompatible with the rights of compensators and insurers to the peaceful enjoyment of their possessions under article 1 of Protocol 1 of the ECHR, commonly known as A1P1 rights. The Bill was held to be incompatible since it would put new financial liabilities on compensators and insurers which arise from asbestos exposure and liability insurance policies which long pre-date the Bill. The bench commented that the retrospective effect of this Bill requires special justification which was not given in this case.

This decision is likely to effect the Recovery of Medical Costs for Asbestos Diseases (Scotland) Bill which was presented to the Scottish Parliament on 5 January 2015. This Bill contains similar provisions to the Welsh Bill in that it proposes Scottish Ministers should be able to recover costs incurred by the NHS for diagnosing and managing asbestos-related disease from those responsible for compensating the victim. This Bill is unlikely, in the wide sense, to be out with the Scottish Government’s legislative competence due to Scotland having greater devolved powers than Wales. However, the Scottish Bill is also likely to be incompatible with the A1P1 rights of compensators and insurers to the peaceful enjoyment of their possessions. Monday’s judgement, therefore, gives rise to questions as to how the Scottish Bill will now proceed.

If you require further information about this update, please do not hesitate to contact:

Wendy Thomson, Partner & Solicitor Advocate, E: wjt@bto.co.uk T: 0131 222 2939