This Member’s Bill amends Part 3 of the Health and Social Care (Community Health and Standards) Act 2003. The 2003 Act allows the NHS to get the cost of hospital treatment back from someone who's responsible for causing an injury . The Bill would make it possible to get NHS costs back in cases of industrial disease.
Industrial diseases are diseases people get as a result of the work they do. For example, if the work involves being exposed to hazardous substances.
The Bill lets the Scottish Government calculate how much the hospital treatment has cost the NHS. The person responsible (usually the injured person’s employer or former employer) then has to repay that amount.
There will be no responsibility to repay the NHS costs if the harmful events happened before the Bill becomes law.
You can find out more in the Explanatory Notes document produced on behalf of Stuart McMillan MSP that explains the Bill.
Why the Bill was created
When someone develops a disease as a result of the work they're expected to do, the employer normally has to pay them compensation.
Stuart McMillan believes that, in such a situation, it is only fair that the employer should also pay for any hospital treatment required. He thinks that this will help the NHS, which is paid for by taxpayers. He also believes this will encourage employers to improve working conditions.
You can find out more in the Policy Memorandum document produced on behalf of Stuart McMillan MSP that explains the Bill.
On 22 December 2020 the Bill was withdrawn. A Bill can be withdrawn by the person, group or organisation that suggested it.
The Member in charge of this Bill, Stuart McMillan MSP, sends the Bill and related documents to the Parliament.
Related information on the Bill
Why the Bill is being proposed (Policy Memorandum)
Explanation of the Bill (Explanatory Notes)
How much the Bill is likely to cost (Financial Memorandum)
Opinions on whether the Parliament has the power to make the law (Statements on Legislative Competence)
Information on the powers the Bill gives the Scottish Government and others (Delegated Powers Memorandum)
Stage 1 - General principles
Committees examine the Bill. Then MSPs vote on whether it should continue to Stage 2.
Who examined the Bill
Each Bill is examined by a 'lead committee'. This is the committee that has the subject of the Bill in its remit.
It looks at everything to do with the Bill.
Other committees may look at certain parts of the Bill if it covers subjects they deal with.
Who spoke to the lead committee about the Bill
First meeting transcript
The Convener (Lewis Macdonald)
Good morning, and welcome to the 28th meeting in 2020 of the Health and Sport Committee.
We have received apologies from Alex Cole-Hamilton. I welcome Willie Rennie as his substitute for this meeting. I also welcome Stuart McMillan MSP, who has joined us for stage 1 consideration of his member’s bill.
I ask all members to ensure that their mobile phones are in silent mode.
I remind members that, when they are asking questions, they should indicate when they have finished their final question. Witnesses should type an “R” in the chat function if they want to respond to a question that is being answered by somebody else.
The first item today is evidence on the Liability for NHS Charges (Treatment of Industrial Disease) (Scotland) Bill at stage 1. I welcome to the committee Professor Andrew Watterson of the occupational and environmental health research group in the University of Stirling; Alan Rogerson, who is the chair of the Forum of Scottish Claims Managers; David Short, who is the secretary of the Association of Personal Injury Lawyers Scotland; and Laura Blane of the lung disease team at Thompsons Solicitors Scotland.
We now move to our first questions. As we do in the current circumstances, we will ask questions in a prearranged order. I will begin with the general principles of the bill. I would like to hear the views of all four of our witnesses on the general principles of the bill and whether employers should, in principle, be liable to pay national health service costs for industrial disease. I will start with Andrew Watterson.
Professor Andrew Watterson (University of Stirling)
Thank you convener, and thank you for inviting me to the committee. The principles of the bill are pretty clear, and there will probably be fairly wide agreement. The bill addresses issues of social justice for the people who contract industrial diseases. That makes economic sense, because it will drive changes in the workplace that will make businesses and employers more effective. It is also an economic scheme that is relatively modest, and is doable. The principles are important because they are about driving improvements to reduce occupational ill health in Scotland.
The Health and Safety Executive has done some costings on the problem. Each year, something like £805 million goes on occupational ill-health costs. Of course, not all of that goes into the hospital sector.
Alan Rogerson (Forum of Scottish Claims Managers)
Good morning, and thank you for the invitation to appear at committee. On the face of it, the bill seems like a good idea, but I am concerned that it would, as currently drafted, have many unintended consequences. Although it is well intentioned, the practicalities of recovering money for the NHS might be a lot harder than they first appear. I can give the committee examples later using parts of the bill, if questions allow it.
That will be helpful. Thank you.
David Short (Association of Personal Injury Lawyers)
Good morning, and thank you for inviting me to the committee this morning. In principle, the Association of Personal Injury Lawyers supports the bill, which follows the polluter-pays principle. However, I agree with Mr Rogerson that it could have unintended consequences, which we could go into later on. Overall, however, APIL’s position is that, if we can get money into the NHS, particularly at this time, that should be done. We can discuss the unintended consequences a little bit later on.
Laura Blane (Thompsons Solicitors Scotland)
I, too, thank you for the invitation to appear before the committee this morning.
Thompsons is broadly in favour of the principles of the bill, which is a logical extension of existing legislation for—[Inaudible.]—cost recovery. Industrial disease has been excluded from that until now because of the potential complexity and potential unintended consequences. However, as we are likely to discuss further, few such problems cannot be solved by taking a sensible and practical approach to them. Litigation in such cases is full of complexity, but most of it has been resolved by those who practise in that area of law, so there is no reason why legislation cannot also overcome the potential complexities.
As has been indicated, the administrative costs of setting up a scheme are likely to be modest. In the current climate, any recovery to the national health service of costs incurred by treating people who are victims of industrial disease must be welcomed. I echo Professor Watterson’s view that anything that encourages better health and safety practices must be welcomed.
David Stewart (Highlands and Islands) (Lab)
Good morning to all our witnesses. Would the bill have retrospective application? Perhaps David Short can kick off on that.
I do not see that working.
The question is more about whether you believe that the bill might, in an unintended way, have a retrospective effect.
Should the bill become statute, it could deal itself with whether it would have retrospective effect. However, generally, new laws are not retrospective.
Thank you. Do any other witnesses want to comment on that?
The bill’s drafters have been quite meticulous in avoiding the possibility of retrospection. Lessons were learned from the Welsh attempt to take forward a similar bill, on which the Supreme Court quickly gave its view in terms of retrospectivity. In my view, there is no scope for the bill to have any retrospective effect.
I thank the witnesses for those answers. Are the witnesses confident that the bill would have no impact on the law relating to insurance, which is a reserved matter?
Can Mr Rogerson start on that one?
Yes. An exception is written into the bill that it should not affect insurance matters, but an insurance contract is a contract between an insurance company and the person who takes out the policy—the insured. The individual contract’s terms and conditions determine whether the policy is triggered. A key aspect that we will probably come to later is that we are talking about insurance policies that are being taken out now that might be triggered many years, even decades, in the future. We have in the past seen arguments about the terms and conditions of policies that were written 50 or 60 years previously.
Thank you. My final question is this: what assessment has the panel made of the bill’s legislative competence? I am sure that the witnesses are mindful of the Supreme Court judgment in 2015, which was referred to by Laura Blane, that the Welsh Parliament acted outside its legislative competence with the Recovery of Medical Costs for Asbestos Diseases (Wales) Bill.
The Supreme Court deemed that the Welsh bill was not within the competence of the Welsh Assembly. Of course, we cannot draw a direct comparison, because the Welsh Assembly operates on the basis of specific powers having been delegated to it, whereas the Scottish Parliament can deal with all matters that are not specifically reserved to Westminster.
I cannot see that the bill treads on the toes of any reserved matter. You touched on whether it treads on the toes of insurance, which of course is reserved. The bill does not affect the law on insurance; it does not require that an insurance policy be taken out to protect against recovery costs—although, as Mr Rogerson said, there will be implications for future policies. I do not think that it could be said that the bill touches on insurance as a reserved matter. It seems to fit most appropriately with health, which is not reserved to Westminster. I cannot foresee the bill causing difficulties in relation to competence or proportionality.
I agree with Laura Blane. I see no legislative problem in relation to insurance, given how the bill is drafted.
Brian Whittle (South Scotland) (Con)
I have an interest in the bill. Any bill that will potentially improve people’s working conditions or help to stamp out bad practice on the part of employers is welcome. However, I speak as someone who owned a small company with only 22 employees. We always found it difficult to keep up with legislation; small and medium-sized enterprises differ from major employers in their ability to deal with such matters. I am not sure who to direct my question to; perhaps Alan Rogerson could start. Should there be a cap on the amount that an employer would be liable to pay in an industrial disease case?
On your point about workplace health and safety, the bill is about penalties that will be levied many years in the future, and sometimes on companies that no longer exist, so there are perhaps better ways to improve workplace safety now, such as through better enforcement action.
There is a cap in place; NHS charges, in the context of road traffic accidents and workplace accidents that arise from a single cause, are on a sliding scale that is reviewed every year. Therefore, there is precedent for the approach. I can talk about the practical difficulties with the current scheme, which might be more problematic in respect of industrial diseases.
[Inaudible.]—that means that they are entitled to good information and advice, and it is a struggle for them. We would expect the regulators to provide that sort of support, upstream. An indirect but positive consequence of the bill is that it will focus attention on occupational ill health, which means that more information should feed into the system and SMEs should be better advised and supported.
I will follow on from that. Some industrial diseases manifest further down the line, including in relation to companies that no longer exist. Should the bill hold former directors of companies responsible further down the line? At the end of the day, directors are responsible for what happens within a company.10:15
Members are probably aware that there is likely to be another bill on corporate responsibility, particularly for fatalities that are due to health and safety breaches. I do not think that the bill that we are discussing should go that far. Legal responsibility rests with the corporate entity, which is the limited company, under the current law. The bill is not the mechanism to change that legal principle.
There remains the ability to restore a company artificially to the Companies House register for the purposes of litigation and to sue that company, with the insurance policy kicking in to make payments for any compensation or NHS costs, should that company be found to be responsible for the damage that has been done. The risk or threat of making directors responsible is more likely to lead to people finding ways of evading that responsibility. It is much safer for people to know that the company will be held responsible and have the protection of insurance policies through the premium that the company has paid, potentially for many years, to meet those liabilities.
Thanks. David Short, do you have a view on the question?
I agree that the bill should not be extended to include directors’ responsibility. Corporate and directors’ responsibility is a complex area. It has been considered in the past, and it is very difficult to hold individuals responsible. As Laura Blane said, it is possible to restore companies to the register. There is also an insurer database, which was not the case in the past. If someone has a case, they can find the insurer and restore the company; it can be dealt with in that way. I do not agree with extending the bill to cover directors’ responsibility.
The matter is very interesting and is something that we will have to look at a bit more. There is already legislation on director negligence; that must play in here, somewhere. I threw the question in as a grenade, so I will just leave the matter there.
Finally, would the cost of administering the scheme, compared to the amount that would be raised from the scheme, be prohibitive?
We have more information than we had a few years ago. We can identify some of the healthcare costs, not just in relation to diseases such as mesothelioma, but in relation to other cancers that are not connected to asbestos, including bladder cancer. The healthcare costs—just the disease-treatment costs—of those would be considerable. The money that would be generated by the scheme that would go back into the NHS—that is important—would far exceed administrative costs.
There has always been a problem with occupational diseases, in that there is cost externalisation. Those who create the diseases and breach the laws—we are talking about cases in which there has been a breach of the law—do not pay, but everyone else does. The scheme would be a good way to recover that money. It seems that the costs of running the scheme would be modest. If they were to go up, that would be an indication that we have more problems and should be doing more on prevention. However, one would expect, if the bill operates as it is hoped it will, to see the number of claims being driven down because there would be prevention of the diseases.
We have much better evidence on what the disease-treatment costs would be and we know that they would be considerable and would far outweigh the administrative costs of the scheme.
We should not lose sight of the fact that industrial diseases take a long time to come to the surface. What we are talking about is negligent exposure of a person, after the bill was enacted, that would result in an industrial disease further down the line. It could be years or decades later, especially in the case of long-tail diseases, such as those that are caused by asbestos exposure.
There are shorter-tail diseases, too, but even in such cases if, after the bill was enacted, a person suffered negligent exposure in year 1 it could be three years between that negligent exposure ending, and the person having realised the extent of the injury, sought treatment and made a claim for that industrial disease. It could be three or four years, easily, before there was any financial impact, so the scheme would have to be set up now.
The financial memorandum contains some very helpful data from Thompsons on the numbers and types of injuries. It might be possible to do a bit more work on the financial memorandum if there was more information about when exposure occurred and how long it takes for claims to arrive following exposure. My part of the industry sees only one small component of that, so I do not have any overwhelming data to confirm the figures. However, I would be happy to work on information on that so that I could provide the committee with some projections.
That would be extremely helpful. Thank you very much.
Andrew Watterson would like to come back in.
I want to make the point that although it is right that a lot of occupational diseases take a long time to develop, that is not true across the board, as has been mentioned. For instance, occupational bladder cancer and some leukaemias can develop in a small number of years, and the treatment costs may be resolved relatively quickly. However, it is also fair to say that there could be long-term costs.
Tragically, in a number of cases of occupational cancers the treatments will not be successful, so there would be an outcome very early on.
Emma Harper (South Scotland) (SNP)
Good morning. I am interested in obtaining information on the definition of “industrial disease” that is used in the bill. The explanatory notes explain that section 1 seeks to insert five new subsections in the Health and Social Care (Community Health and Standards) Act 2003, the first of which provides the main definition of “industrial disease”. The second new subsection expands on that definition. Basically, a disease is “industrial”
“if it arises out of a person’s employment, whether that is the injured person’s own employment or the employment of someone else associated with that person, so long as there is a causal link between the disease and the associated person’s employment.”
Our briefing paper mentions that more than 70 prescribed diseases are known to be a risk from certain jobs. As a co-convener of the cross-party group on lung health, the Parliament’s asthma champion and a registered nurse, I find the issue extremely interesting.
Do any of the witnesses have any concerns about the definition of “industrial disease” that is used in the bill? Laura Blane might want to answer first.
I do not think that I have concerns. The word “industrial” might carry connotations that are not really for a modern age, in that it suggests heavy industry of the past, but I think that the wider definition, in which the phrase
“arising out of the employment”
is used, is wide enough to capture any potential disease that arises from modern employment. The word “industrial” is used consistently in benefits legislation and in all sorts of definitions of diseases of employment. The connotations are perhaps a little out of date, but the wider definition ought to capture a wide-enough scope of people being exposed to or going through processes that lead to disease or long-term injury in their employment.
Might there be potential issues with identifying an industrial disease and its subsequent treatment? We have heard previously that many industrial diseases can take years to cause an injury or ill health. I am thinking about people working in sawmills who are exposed to sawdust, for instance, who do not make the correlation between their chronic obstructive pulmonary disease and a job that they had five, 10 or even 15 years ago. There are also issues with welders and inhalation of manganese. Are there any issues with identifying what caused a person’s disease, especially when it is years down the line?
That is a very valid point. It is clear that there are difficulties, but the position is getting better. We are getting a much clearer picture now about how occupation might affect diseases such as those that Emma Harper mentioned, including asthma, COPD, bladder cancer and skin cancer. I agree that “occupation” would be the better word to use, if it were not for the reasons that we have just heard. Legally, people operate on the basis of the word “industrial”.
If we look at something like asthma and exposure to various chemicals, the effects would probably be quite rapid. There is a wide range of lung diseases linked to asthma that can appear within weeks. There could be one exposure and the diseases would certainly appear within a couple of years. Long-term exposure to wood dust might be another matter, but we can build up a picture. That is what the Industrial Injuries Advisory Council does at the moment in the United Kingdom, although it is fair to say that its list of occupational diseases is quite limited.
Over the past couple of years, we have seen greater recognition that it will not just be workers who are exposed to asbestos who may present a problem to their relatives and families; other substances such as benzine, for example, could damage the foetus or affect children. However, as I understand the bill, the provisions would kick in only when those diseases are properly recognised. Knowledge will grow over the years and some occupational diseases may drop off, but new ones will come in and the bill will be well able to cater for that. Therefore, the definition of “industrial disease”, which has been broadened out, is very positive.
The question about the identification of the diseases and their subsequent treatment is a very good one. As I see it, one of the unintended consequences of the bill for the NHS is what I would describe as comorbid conditions. If a person presents at hospital, we are, in essence, asking the treating clinicians to establish what has caused the person to present on that day in order to work out whether it is a cost that is recoverable under the bill. That can be an impossible task; we are trying to divide the indivisible if a person with asthma or a lung condition also has a history of being a heavy smoker, for example. We are asking clinicians to take time out from treating patients to decide whether their condition is due to the industrial disease or some other cause, and there could be many different causes.
I am thinking about ways of mitigating that. If the list of industrial diseases was up to date—using robust evidence, obviously—we would then know whether something is an industrial disease. Keeping information up to date would be one way to overcome such outcomes.
How could the proposals relate to Covid? We hear about long Covid, which involves longer-term symptoms of exposure to coronavirus and might be experienced by healthcare workers, for instance.10:30
It is important to remember that the liability to repay NHS costs would be triggered only after the compensation process had been completed. The list of identified industrial diseases does not necessarily determine the outcome of civil litigation. In that process, causation is the key issue—whether the injury to the individual, whatever it might be, was caused by their workplace. That is not predetermined by whether the condition is on the prescribed list.
The law is flexible enough to adapt to and accommodate any new condition, and Covid is absolutely relevant now. However, causation is determined in the legal process by expert evidence and not by the treating doctors who have seen the individual—they get on with treating the individual regardless of the legal process.
Whether we were dealing with an industrial disease under the bill would be determined by the compensation process, which would trigger the repaying of costs. As I said, that is wide enough to accommodate any suggestion that an injury is associated with an occupation, regardless of the list of prescribed diseases. That is not to say that I do not think that that list should be as flexible and broad as possible in the context of industrial injuries disablement benefit and so on, but that is not necessary for the bill’s purposes.
As for Covid, I think that it would, if the bill were—[Inaudible.]—potentially be considered an industrial disease, because we know that people are being asked to go back to the workplace before a proper risk assessment has been done and are contracting Covid as a result.
I remind everyone please to mute or switch off devices other than the one that they are on for the meeting, so that notifications do not interrupt the recording.
I agree with several things that Laura Blane said. Covid should certainly be on the list, and that will be worked through. Belgium already recognises Covid as an occupational disease for healthcare workers, and that approach will probably need to be broadened. The question would go through the processes and mechanisms that are in the bill.
Emma Harper made a point about the list of occupational diseases, which I think will be updated. It is sobering to note that the UK has a very short list of prescribed industrial diseases, whereas the list is longer in France and Germany, although they use the same science. The number of asbestos-related cancers that are recognised in the UK is small in comparison with France. Canada recognises more than a dozen cancers as occupational diseases, whereas the UK recognises one, in effect.
We cannot just pop a disease into the list; nobody suggests that. A rigorous examination would be needed. If we were doing our job, the number of people who were affected by the growing list of occupational diseases would be small. There is an incentive for employers and for Governments to support employers by getting information out there to stop the use of the substances and processes that might cause occupational diseases. Many people would welcome an expansion of the occupational disease list.
I support Laura Blane’s comment about causation and legal liability being decided through the legal route; I agree with that entirely. My point was that we are asking the treating clinicians, in essence, to say whether the person who has presented to them is suffering the effects of industrial disease or some other cause. I draw parallels with my experience with NHS charges in relation to road traffic and workplace accidents, which are the biggest source of appeals down the line, when the person who is paying the compensation does not agree that the treatment that the person has had is all related to their accident.
That will be all the harder when we are talking about industrial disease that is the result of events that happened many years before. Cases will be by no means as straightforward as a case in which someone has a broken leg—and if that person spends numerous days in hospital, we have to work out what those days in hospital were for and whether the person sustained a complication that was unrelated to the accident.
I want to come in on two points, the first of which is the industrial nature of the disease in the context of employment. APIL’s view is that the bill should not be restricted to employment. In dealing with disease claims at the moment, a voluntary protocol is followed, which the Scottish civil courts review indicated should be made compulsory. In that protocol, the definition of “disease” is much wider. What we seem to have in the bill is the diseases that are categorised as industrial diseases for industrial injuries disablement benefit and the like.
APIL’s view is that the approach should not be restricted to the workplace. For example, 40 or 50 cases are currently being litigated as a result of the legionella outbreak in Edinburgh a number of years ago—many of those people had time in hospital. The outbreak was linked to an industrial site or sites. Another example is a case in which someone contracts a disease from a product—there was litigation against Johnson & Johnson in the United States in relation to cases of ovarian cancer that were allegedly caused by using baby powder. Lots of diseases can stem from using a product or from a workplace, but such cases would not come under the heading “employment”.
My second point is about the difficulties that Ms Harper talked about and which Alan Rogerson pointed out. I do not often find myself agreeing with Mr Rogerson, but I certainly agree with a number of points that he has made today. If someone breaks a leg, they break a leg—and, as he said, even in those cases there can be complications and appeals. APIL is not part of such appeals, as we deal just with the compensation for victims. There are problems with assessing the level of disability that is the subject of the litigation. There is also a problem if there are multiple defenders. What proportion of the contribution to NHS charges does each company have to make? There are enough arguments going on between defenders already, and I worry that the bill will add another layer of complication, which could delay litigation for victims.
David Torrance (Kirkcaldy) (SNP)
In written submissions to the committee, some people highlighted a potential unintended consequence in relation to insurance companies delaying compensation settlements due to the obligation to pay NHS costs for industrial disease. What impact could the bill have on the agreement of compensation settlements in cases of industrial disease?
This follows on from what I said to Ms Harper. Delays can come in when there are arguments between the defenders. As representatives of victims, we often find ourselves just standing back and watching the defenders throw bricks at one another.
In a straightforward asbestos case, such as a shipyard case, liability is not usually in dispute, so we know that we will be successful for the victim. However, the questions come in about what the disability is and who has caused it. At the moment, I understand that the defenders argue over £1 of contribution, on a percentage basis. I worry that, if defenders have to make further payments, they will dig in a bit deeper and argue more about contribution between the defenders, which will inevitably lead to possible delays, subject to court timetables.
I almost find myself agreeing with David Short on some of those points, although my points about defenders are maybe not quite so bad.
We are talking about some of the unintended consequences of section 2 of the bill, which I see as problematic, as it could delay settlement offers for pursuers and result in delays for pursuers in obtaining their rightful settlement. Section 2 is about contributory negligence and the idea of defenders splitting up the cost of a claim. Contributory negligence is when a person might have contributed to their injuries by refusing to wear personal protective equipment or by not adhering to training that they have undertaken.
With road traffic accidents, it happens all the time that solicitors for the injured person will not commit in writing that they accept a level of contributory negligence, such as 25 per cent or even 10 per cent. The solicitors will not do that, because they fear that putting it in writing will mean that a professional indemnity claim will be made against them later for undersettling the claim.
The compensation recovery unit, which administers the scheme for road traffic accident and workplace accidents, requires written evidence at conclusion of the claim saying what the respective people agreed as a split in the cost of the claim. The unit uses that to split the NHS charges accordingly. If that written evidence and those agreements are not available, that just delays the claim for the pursuer, so the poor person who is due the compensation does not get it. Much of the time, the situation forces cases to litigate that do not need to litigate, which just lengthens the process and the cost for everyone involved.
I do not deny that all those issues are present, but they are present currently for anyone—[Inaudible.] The reality is—[Inaudible.] In terms of the defender—[Inaudible.]—their contribution. The majority of disease claims are also—[Inaudible.]—because—[Inaudible.]—might otherwise get. So, the process of—[Inaudible.]—once the case has litigated there will be hearing dates set down in those cases, which will be about the liability—[Inaudible.] On that hearing date—[Inaudible.]—defender—[Inaudible.]—subject for the court—[Inaudible.]—and they do get—[Inaudible.] So I do not—[Inaudible.] The defender is required to reach an agreement—[Inaudible.]—on the contribution—[Inaudible.]—on the matter—[Inaudible.]
Thank you very much. I should say that, on that last answer, Laura, the sound quality was not terribly good, so we might ask you to put that in writing at some point after the meeting.
How could any unintended consequences of the bill be mitigated?10:45
I cannot see any way that the unintended consequences of the bill can be made right unless the bill is not brought forward. That is fundamental.
The bill must follow the same sort of process as the recovery scheme that exists in other areas, but this area is not as straightforward as others. That is why the briefing from the Scottish Parliament information centre said that when this matter was previously looked at, in 2006, as part of the changes that brought in the workplace NHS charges, industrial disease was too difficult to tackle then.
I do not think that it has since become any less difficult to tackle, especially when the Department for Work and Pensions and the compensation recovery unit are insisting on written evidence of agreement before apportioning a change to NHS charges. You are putting the onus on one defender who is paying the NHS charges for their exposure period, but there could be many other historic defenders before the act is brought in who are more culpable but who will not put pen to paper to agree the proportion. In many cases, the defender will have no option other than to leave the pursuer waiting for an offer. That is not right. The injured person must be at the heart of the process and should come first in our consideration.
George Adam (Paisley) (SNP)
Ironically, my first speech as an elected member of Renfrewshire Council was on this subject, supporting what was then known as Clydeside Action on Asbestos.
We have seen how legislation can change business practices, particularly in health and safety. Do you believe that the bill would provide an additional incentive to improve health and safety practices in the workplace?
I do not think that there is any guarantee of that, but the bill will reposition health and safety as a serious issue for employers of all sizes. Anyone running a business will take the financial impact seriously. If an additional insurance policy is required because of the bill, and if there is the incentive that premiums will be lower when someone has a good health and safety record, it makes economic sense for the employer to maintain a good health and safety record.
As well as considering the financial burden that they may have to bear, employers must also focus on health and safety practice in order to prevent these diseases developing.
Anything that helps health and safety in the workplace should be welcomed. There could be pressure from the insurer for the company to ensure that it follows health and safety guidelines as a condition of the policy. If that helps to save someone from developing a disease, people must welcome that.
I agree with what has been said. We have evidence from the United States, particularly from Massachusetts. When occupational diseases are identified there, there is an advice and support service that allows employers and regulators to work on ways and means of getting the causes of that occupational disease out of the workplace. That is a win, win, win. Diseases in workers are reduced, pollution is often reduced and companies usually become more effective and efficient because they invest in the best technologies and materials.
Simply by being passed, the bill would highlight the importance of not neglecting what goes on in the workplace and the impact that that has on health and, indeed, public health. That is a big plus.
Do you believe that the bill will result in fewer industrial diseases in the future? Does it have the power to be able to cut them? I wonder whether Professor Watterson can answer that question.
I think that it does. We will see how the bill works but, if it works well, employers and workers will become more aware of the problems, and action will be taken to try to raise standards. If we do what we should do in the health and safety structure, we would expect to see occupational diseases and injuries being driven down. I would expect that to happen.
I have a slightly contrary view, mainly because I see the consequences of industrial diseases appearing many years later. I do not think that the bill will have quite the impact on workplace conditions that better inspection and enforcement action would have.
Willie Rennie (North East Fife) (LD)
It is widely believed that insurance companies will offer insurance policies in the future to cover the NHS contributions that may be coming as a result of the actions of their clients. What effect would that have on premiums? If we are going to have a law in Scotland that is different from that in the rest of the United Kingdom, what would that mean for insurance policies and for companies that straddle several parts of the United Kingdom?
That is a good question. The problem is that we do not know what impact there will be many years down the line. Because of the way in which insurance policies work, it will be the insurance policy at the time of exposure—that is, after the bill has been passed—that will pay out many years down the line. We are trying to look at that, assess the risk, and say what insurance premiums will do.
I am a claims person, and my personal view is that the costs are so far down the line that we simply cannot tell. I think that it will be many years before we see any of those costs coming through and that there will not be any real guidance on setting premiums for a number of years. However, the uncertainty could well drive up premiums and lead insurance companies to charge additional premiums.
The point about other areas of the UK is quite a good one, because businesses cross borders. We could see people who have industrial diseases working in England and Wales but living in Scotland and coming back to Scotland for treatment in years to come. We simply do not know what will happen.
The uncertainty means that insurance premiums could increase on the chance that there will be an additional cost in the future off the back of the policies.
Sandra White (Glasgow Kelvin) (SNP)
Good morning, everyone. I have found the discussion fascinating, and I thank my colleague Stuart McMillan for introducing the bill, particularly in light of the definition of diseases and the amount of information that we have received. I also thank our witnesses.
I was going to raise an issue that was not in my agreed questions, so the convener would not let me. I wonder whether mental health will come into this, in light of what is happening now, and people who work in bars and shops, for example.
Who would administer the scheme? Would it be administered from Scotland? Would the DWP administer it? I note that opinions differ on that issue. Stuart McMillan would prefer that the Scottish Government and UK Government come to an agreement, and for the DWP to administer the scheme on behalf of the Scottish ministers. However, the University of Stirling occupational and environmental health research group states that
“the Scottish Government published the document Creating a Fairer Scotland: A New Future for Social Security in Scotland. In these circumstances it would be contradictory”
for the DWP to administer the scheme.
In answers to previous questions on cost, I think that Laura Blane said that the administrative cost to the Scottish Government would be “modest”, but the Association of British Insurers said that
“a separate recovery scheme operated by the Scottish Government would be more expensive, complex and less efficient.”
Should the Scottish Government or the UK Government compensation recovery unit administer the new scheme? Given that the evidence is contradictory on that point, what are the advantages and disadvantages of each approach? What are the potential difficulties in administering the scheme for whoever takes on that job?
You mentioned mental health as well, so the witnesses should feel free to comment on that, too.
Sandra White makes some interesting points. I agree that we should consider mental health, but that will be a difficult area. Some countries recognise some of the problems that are created there and have industrial disease compensation.
With regard to the CRU, things have moved on. The CRU started off well in the DWP, but people in England say that there are actually lots of problems with how it functions. A fresh approach would perhaps give an opportunity to avoid some of those problems, because it would mean that we get greater equity in the way that the scheme operates. While recognising the complexity of the matter, in some respects we might be able to start with a blank sheet for the administration processes. There will be opportunities as well as challenges for Scotland if the bill goes through.
Mental health is a huge issue, especially currently. I revert back to what I have said previously: I do not think that mental health issues have to appear on a list of prescribed diseases before the legal compensation route is open to individuals. It is a difficult matter because stress cases, as they are widely known, are difficult to establish; it certainly would not be impossible for the existing law to be made wide enough to include those issues in the definition of industrial disease.
With regard to administration, from a purely practical perspective, a system is already in place that the CRU operates and that everybody understands. It operates in terms of accidents and diseases and it would make sense for that to continue, with arrangements made separately.
Given that the bill covers Scotland only, modifications would need to be made to deal with the fact that it is about diseases and therefore more complex, and that it applies only to Scotland. I share Stuart McMillan’s view: the CRU is there and set up and should be modified to deal with the provisions in the bill.
I agree. If a separate arrangement is made in Scotland, all the systems have to be in place to support it, and staffing costs have to be considered. The financial memorandum touches on those and conservatively estimates them at £66,000 for three people in the CRU.
I come back to the issue of the hidden cost on the NHS as well, in relation to appeals and processes wherein hospitals would be asked to consider the appropriate treatment and decipher whether that treatment was linked to the industrial disease cost.
It would then be a lengthy and expensive process. Although we can tell how the compensation recovery unit works for road traffic accident victims, we are into unknown territory in relation to appeals for disease cases, and I think that they would be a lot more prevalent than has been allowed for in the financial memorandum. It will be some years before the level of recovery gets to a point where it is sustainable, if indeed that is ever reached.11:00
I have a small follow-up question: if we do not have a separate scheme in Scotland and we marry up with the DWP scheme, would that cause problems for anyone who wants to make a claim? Would that be stymied?
I do not see any problem at all with that; we are all well versed in the world of insurance in telling the DWP that we have a claim and giving it the details, and we do not have any issues with it checking with hospitals whether that person has had any treatment.
I will call Donald Cameron in a moment and after Donald has asked his questions, I will ask Stuart McMillan, who is the sponsor of the bill, to put a question or two to the witnesses.
Donald Cameron (Highlands and Islands) (Con)
I refer to my entry in the register of members’ interests. I am a member of the Faculty of Advocates.
I will follow on from some of Sandra White’s questions. The witnesses have touched on the subject of the financial memorandum. Are you confident in the cost estimates for administering the scheme, as outlined in the financial memorandum? It is estimated that a Scotland-only cost-recovery system would cost £66,000 per year, but Alan Rogerson touched on the fact that there is a view that that is a light figure and we might require more. Does the panel have a view on that?
I have no information on the actual costs, so we have to take what is in the financial memorandum at face value, but it seems to be particularly light. The estimate of use of three people sounds reasonable, but there will surely have to be process changes behind the scenes to enable that. The estimate takes no account of the administration time for the NHS, or of the time of treating clinicians, if we ask them questions about treatment that is being administered or what that person was in hospital for. It is impossible to put a cost on all those hidden charges, but it puts the £66,000 in perspective.
I come back to the point that Alan Rogerson made earlier. I accept completely that there will be a lot of complexity in many cases, but in some instances things might be relatively straightforward, and we should take note of that. We did some work a while ago on hospital treatment costs for mesothelioma, about which I do not think there would be any debate. The Canadians and others have good templates in respect of a number of other occupational diseases in relation to which there would be little debate about treatment costs. In some instances it might be straightforward, but it could become very complicated.
This might be an obvious question to ask, but would it be right to suggest that the bill will simply increase the number of cases that are eligible for recovery of NHS costs? Are we likely to see more appeals and reviews? What might be the impact on costs, if that turns out to be the case?
As a pursuers’ solicitor, I am probably not in the right position to answer that. We take no part in the recovery process, which is for our counterparts and for the insurers. I will therefore pass that question to Alan Rogerson.
I think that the bill will give rise to more appeals because, with industrial disease, it is harder to say that the treatment is directly related to that disease. There will undoubtedly be appeals, and any additional cost that is part of the process also lengthens the process. I return to the point about delay in the injured person receiving compensation, and increased costs in the system.
Insurers and the solicitors who act for defenders would appeal cases not just because they are being vexatious, but because they think that they have a point—that the treatment is not linked to the industrial disease.
As a pursuers’ solicitor, like Laura Blane, I cannot comment on the actual costs, but I will say that, from a victim’s point of view, the current scheme that is run by the Department for Work and Pensions is working. There is the odd glitch—although I defer to Professor Watterson, who seems to have some statistics to suggest that the scheme is not working—but from a victim’s point of view, and judging from the cases that I deal with, the system works. If it’s working, don’t try to fix it.
My understanding is that the appeals process and, indeed, the recovery process take place after settlement of a compensation claim, so I am not entirely convinced by the point about additional delay for the person concerned.
I think that Alan Rogerson wishes to clarify his view on this point.
Appeals have to happen after settlement; I was conflating that with reviews, when we ask the compensation recovery unit to review the treatment.
I take this opportunity to invite Stuart McMillan, who is the member in charge of the bill, to ask our witnesses some questions.
Stuart McMillan (Greenock and Inverclyde) (SNP)
Thank you, convener, and I thank colleagues on the committee and the witnesses for their questions and answers so far this morning.
I have a couple of questions. The first is for Mr Rogerson, who has said a couple of times that there would potentially be no major gain from the bill, in terms of finance for the NHS, for some years to come. Surely, however, a bill of this type would be extremely useful to have on the statute book now, for future proofing the issue and assisting with NHS treatment in the future.
[Inaudible.]—future proofing. It is really for the committee and the Parliament to decide whether the numbers stack up in that respect. It has been difficult to find any analysis of exactly what the costs would be. That goes back to the point about the delay, or the latency period, as we call it—the delay between negligent exposure of the person to the thing that has caused the industrial disease and when the condition transpires.
We are talking about things happening many years, if not decades, down the line. That must feed into the decisions of the committee and the Parliament on whether you want to future proof things in this regard, whether the bill represents the best mechanism for doing that, and whether the set-up costs and the running costs are not to be taken on just now.
I have a second question for Mr Rogerson. I assure you that I have a couple of questions for the other witnesses, too.
You commented earlier—Willie Rennie also touched on this in his questions—on the potential for confusion if there is in Scotland a process or system that is different to what exists elsewhere in the UK. However, most insurance companies already operate in multiple countries and under multiple jurisdictions. It could therefore be suggested that this limited addition to the statute book in Scotland and not elsewhere in the UK would not be overly onerous or confusing for the insurance industry.
I would not say that it would be completely confusing for the insurance industry. What I would say is that because it is difficult to predict the cost, the uncertainty could lead to additional insurance premiums. I can offer no more information without knowing more about what the cost will be in the future.
However, we can look at other areas—for example, flooding. Insurance companies now have flood-mapping technology and can predict which areas are likely to suffer from flooding. The Government has also implemented a flood reinsurance programme to ensure that people in those areas can obtain insurance.
The point is that if insurance companies are trying to better their competitors by having better technology and pricing, a company may look at Scotland and say that a business with a Scottish postcode might have to pay an additional insurance premium for the additional risk involved.
My final question concerns Professor Watterson’s written evidence on behalf of the University of Stirling occupational and environmental health research group. It says:
“The bill’s broadening out of what is understood by ‘industrial diseases’ is an important step forward. It should help to ensure neglected numbers of occupational diseases occurring among women and marginalised groups are finally fully recognised and recorded as the bill will be able to include diseases contracted beyond those in traditional male-dominated industries.”
First, do the other witnesses agree with those comments? Secondly, do they believe that the bill has, in its ethos, an equality aspect built in, rather than its being an add-on? Bearing in mind the comments from Professor Watterson, do you think that the bill will increase the opportunities for women and marginalised groups to get justice and the assistance that they require?
I come back to a point that I have made a couple of times. The definitions of disease and the sets of people that those definitions touch on do not really play into how the bill will operate in practice. The bill is all about whether or not there has been successful litigation. The law is currently wide enough to encompass anyone who has been negligently injured in the course of their employment or as a result of the employment of somebody else.
My speciality is asbestos disease. I am now seeing increasing numbers of women who are affected by asbestos disease because of its social history, which meant that women first became exposed 20 or 30 years ago and are now suffering the consequences of that exposure.
The bill, in itself, will not open up equality of opportunity to marginalised groups: law exists to do that. What the bill will do, as I said previously, is highlight all those issues, which are still relevant to anyone in Scottish society.
I agree with that entirely. The bill does not promote equality; the existing legal framework does that. This goes back to use of the misnomer “industrial disease”, which leads one to think of Scotland’s heavy industrial past, as opposed to what we mean by disease now.
I thank all our witnesses for a very full evidence session, which has been helpful to committee members. I thank Stuart McMillan for joining us; I am sure that he will have found it helpful, too. We look forward to dealing with the bill further in the weeks ahead.
3 November 2020
Second meeting transcript
The Convener (Lewis Macdonald)
Good morning, and welcome to the 29th meeting in 2020 of the Health and Sport Committee. We have received apologies from Alex Cole-Hamilton; I welcome Willie Rennie as his substitute.
I also welcome Stuart McMillan MSP, who joins us for stage 1 consideration of his member’s bill, the Liability for NHS Charges (Treatment of Industrial Disease) (Scotland) Bill. We will hear evidence on the bill from two panels of witnesses. First, I welcome Joe FitzPatrick, the Minister for Public Health, Sport and Wellbeing, who is accompanied by officials from the Scottish Government directorate of health finance: Isabel Hinds, governance and finance accountant; and Julie McKinney, head of internal financial performance. I thank you all for joining us and invite the minister to make brief opening remarks.
Joe FitzPatrick (Scottish Government)
Thank you for the opportunity to give evidence today. The Scottish Government is sympathetic to the intention behind the bill, which is to ensure that the costs of treating and caring for individuals who are affected by an industrial illness are recovered from the party that has compensated those individuals, rather than the taxpayer. We are keen to consider any proposal that would allow national health service resources to be used more effectively.
In saying that, we would be interested to see more evidence behind the detail of the bill, as a number of points require further clarity. The policy memorandum notes that there would be in the region of 500 cases per year but states that, ultimately, it is impossible to estimate the costs to the NHS of treating those people. We are keen to see further information about the number of cases and resulting costs.
As we set out in the memorandum that we submitted to the committee in September, it would also be helpful to have evidence on the anticipated level of revenue that the bill could recover and on the cost of administering the scheme. It is important that the scheme should not run at a loss due to the potentially low number of cases.
At present, the effect of the bill is that the Scottish ministers would administer the scheme. We note that the member says in the bill documents that his preference is for the United Kingdom Government to administer the scheme through the Department for Work and Pensions compensation recovery unit. It will be important to clarify details on scheme administration, as the bill might need to be amended to enable the scheme to be administered by a new statutory body, or to give new statutory functions to the existing body.
At this unprecedented time, we recognise the difficulty of gathering further evidence on costs to include in the financial memorandum. Nonetheless, if we are to come to a clearer position on the bill, we require further work to be done on the expected costs to be recouped, compared with the time and resources that would need to be spent on the proposed approach.
We look forward to the committee’s report on the bill. I am happy to take questions.
Thank you, minister. Given everything that you have just said, would it be fair to say that you are not averse to the general principles of the bill and indeed are sympathetic to them, but that, if the bill is to proceed to the next stage, you will need the questions that you have summarised to be addressed?
That is an accurate summary of our position. Obviously, everyone has an interest in the NHS having additional resource, but we need to ensure that any scheme that we put in place meets its intended purpose and has that effect, rather than ending up as a drain on resource.
In that case, is it your view that all the practical and implementation issues that you raised can be addressed through the Parliament’s scope for taking proposed legislation to a conclusion?
We would need more information about intention, and it looks like more work requires to be done. The Government would be keen to help the committee get more information if the decision is that the bill should proceed in this parliamentary session. Obviously, accessing some of that data in the current pandemic, particularly on issues around finances, is particularly difficult, and more difficult than it would be in normal times.
Thank you very much. That is helpful.
Emma Harper (South Scotland) (SNP)
The minister has raised the issue of finance, with one challenge being the need to find out about the cost of the scheme.
I am interested in the definition of “industrial disease”. The bill defines that as a disease
“arising out of the employment of the injured person ... arising out of the employment of any person associated with the injured person, or ... which makes the person suffering from the disease eligible for employment-injury assistance under regulations made by the Scottish Ministers”.
Might issues relating to the implementation of the new scheme arise from the definition of “industrial disease”? If there are challenges with the definition, what are the reasons for potentially implementing the new scheme?
As the bill goes through the parliamentary process, it is really important that we ensure that we get robust definitions. It is clear that the existing scheme is a United-Kingdom-wide one and that the new scheme would be a divergence from that. It would have Scotland-specific aspects. There would be a balance between ensuring that the aspects of the scheme that remained aligned across the four nations would still be robust and ensuring that we have appropriate definitions for specific aspects.
David Stewart (Highlands and Islands) (Lab)
[Inaudible.] I would like to talk about the administration of the scheme. Who should administer the new scheme? Should it be the Scottish Government or the compensation recovery unit at the Department for Work and Pensions?
That is a very important question. The member in charge of the bill has suggested that it should be administered by the compensation recovery unit at the DWP. My officials have contacted the DWP to seek clarification on its position, and we are still waiting for a response. Obviously, we will provide that information to the committee when it is received.
The question is very important because the answer to it would determine to some extent where the burden of the costs would rest. It is clear that, if the costs rested on the NHS and those costs were higher than the recovered costs, we would have a scheme that was intended, in principle, to help the NHS but which would do exactly the opposite. It is really important that, in looking at the bill, the Parliament and the committee ensure that we do not inadvertently create a scheme that does exactly the opposite of what Mr McMillan and, I am sure, others hope that it would do.
My experience is that the Governments in the four nations tend to underestimate the costs of providing new services. As a generalisation, there are hidden costs in setting up any new organisation. The advantage of the compensation recovery unit administering the scheme is that there is an existing scheme and it knows which way is up. The issue is not a party-political one. I understand that the minister may wish to have a lot more powers in the Scottish Parliament, but that is not what we are talking about; this is about ensuring that the approach is cost effective and that we do not create another huge tier of bureaucracy.
I am sorry if I gave the impression that I have a preference one way or the other; I do not. What I am saying is that in the bill as drafted those powers rest with the Scottish ministers, although I understand that the preference of Mr Stewart and Mr McMillan is that the scheme would be administered by the compensation recovery unit.
Sandra White (Glasgow Kelvin) (SNP)
You said in your opening remarks that you are sympathetic to the scheme, but that there are a number of issues and that more evidence is needed on finance. My question follows on from David Stewart’s question. What consideration has the Scottish Government given to the potential costs of administering the new scheme? I note that the DWP charged £215,000 to administer the current scheme on our behalf. Will you elaborate on that? Have you looked seriously at whether you would continue with that scheme while having to set up a unit under the Scottish ministers, would you have a Scotland-only scheme?
The member is absolutely right about what the DWP charges—the figure is £215,600. This is not a Scottish Government bill. If the committee decides that the bill should move to the next stage, we would do as much work as is required around it. Just now, huge resources are going into the Covid response. As I said in my opening remarks, some of the costings might be more difficult to estimate under current circumstances than in normal times.
I have a short follow-up question. I thank you for the correspondence that the committee has received from the Scottish Government. Point 10 in that correspondence says that if the Scottish Government wished to set up its own scheme, it would need to speak to the DWP about whether it would
“have the capacity to provide the service”
or whether it would be happy to work with you to set up a separate service. How difficult would setting that up be?
As I said, Scottish Government officials have contacted the DWP to seek clarification on its position, but we have not yet had a response. I guess that it is suffering the extra pressures that we are suffering, and which the committee is suffering, in terms of the work that it is doing around the Covid response. We will make sure that the committee sees any DWP response.
That is very helpful, minister.
Brian Whittle (South Scotland) (Con)
Good morning, minister. Your opening statement and the Scottish Government’s written evidence alluded to the fact that further explanation is needed as to whether setting up the scheme would be worthwhile and would not incur costs. Has the Scottish Government made any assessment of the potential financial benefit to the NHS of the scheme as set out in the bill?
As I say, this is not our bill and we will take it forward as the committee suggests. The point I made in my opening statement is that some additional evidence would be required to enable that assessment to be made. There are two sides to that: one is the cost of administration, and the other is what might be recovered. Both figures would be difficult to estimate at any time. Parliament and the Government are used to making estimates for which it is difficult to access the information, but it is especially difficult just now, given the pressures that we are all facing.
What process will be required to get that information, and what is the timescale for that?
This is not a Scottish Government bill, so the member and the committee would need to satisfy themselves that they have robust figures. If there is a role for the Scottish Government, we will put in the required resource. However, that resource will have to come from somewhere. The health directorate, in particular, is working very hard across the board, and we have already had to put aside a number of the Government’s priorities in health and other areas in order to focus on the work that is required to respond to the virus.09:15
Willie Rennie (North East Fife) (LD)
I am not detecting a great deal of enthusiasm from you, minister.
Have you looked at the work on the issue by the occupational and environmental health research group at the University of Stirling, which has said that the money that would be brought in from the proposed scheme would easily cover the cost of running it? Do you agree with that assessment?
I have not looked specifically at the University of Stirling’s work in this area. Isabel Hinds might be able to comment on that.
Isabel Hinds (Scottish Government)
I thank the committee for having me.
I have not seen the piece of work in question, but I can certainly have a look at it and submit any views to the committee, should that be required.
That is fine.
I invite Stuart McMillan, who is the member in charge of the bill, to ask any questions that he may have for the minister. I ask any other committee members who have questions for the minister to indicate that in the chat box and I will try to bring them in.
Stuart McMillan (Greenock and Inverclyde) (SNP)
A question has been asked about the definition of “industrial disease”. Do you believe that the definition in the bill is robust? I realise that the issue of whether it is robust has already been touched on.
The definition that is used in the bill does not give us huge concern. If the bill were to proceed to the next stage, we would consider whether any amendments were necessary. The definition of “industrial disease” is not an area that we have huge concern about, unless Isabel Hinds has evidence to the contrary.
I agree with that assessment. We have no concerns about the definition at the moment. It would be at stage 2 that we would look to make further assessments.
With regard to the financial memorandum, Willie Rennie asked about the work that has been done by the University of Stirling, which you said you have not seen. At last week’s meeting of the committee, the witness from the University of Stirling indicated that they believed that, if the proposed scheme was introduced, the measures in the bill would cover its costs and the additional resource could go into the NHS.
I recommend that, once the meeting is over, you have a look at the evidence from the University of Stirling. I am aware that you are waiting to receive a reply from the DWP.
We will look at that evidence. However, it is important that the financial memorandum is as robust as possible, and if the University of Stirling can provide more data that can go into the estimates in the financial memorandum, that will help with their robustness.
As I said, I have not seen what the witness from the University of Stirling said, so I do not know what assumptions they made about who would administer the scheme, what the costs of administering it would be and how many cases they assessed. It sounds as though the work that has been done at the University of Stirling, on which evidence was presented last week, is an interesting piece of work. Neither I nor my officials have seen it as yet, but it is important that that information is looked at.
I have one final question, which is on the administration of the proposal. I am sure that we will also address that issue when I am asked questions shortly. The suggestion that the CRU should undertake the administration was made to ensure that costs are reduced, instead of establishing something new in Scotland. With that consideration in mind, does the minister think that that would be the most appropriate way forward, even in the short to medium term, to ensure that the proposal could be introduced until such time as constitutional arrangements are altered?
It is important that we understand who would administer such a scheme in the short term and in the longer term. As I said, my officials have contacted the DWP to assess its take on the matter, but we have not yet had a response. I do not know whether there is an opportunity for the DWP’s CRU to carry out the work; the DWP might say that it does not have the information. My officials will chase the DWP for a response about administration. If we receive a response, we will ensure that the committee gets sight of it.
That is very helpful. As there are no further questions for the minister and his officials, I thank them for their attendance. I ask that the further evidence that the minister has offered to provide to the committee is with us by 20 November at the latest. That will allow us to proceed on the schedule that we have set.
We will provide the information by then if we receive it. As I said, it is not ours.
Indeed. However, if it is possible, that would be welcome and would assist the committee with its work.
We move to the second evidence session on the bill. I welcome back the poacher turned gamekeeper, or the gamekeeper turned poacher—I am not sure which it is—Stuart McMillan, who is the member in charge of the bill. As a witness, he is accompanied by Andrew Mylne, who is the head of the non-Government bills unit of the Scottish Parliament; Kenny Htet-Khin, who is a solicitor; and Seonaid Knox, who is a researcher for Stuart McMillan. I welcome all the witnesses to the evidence session.
I ask Stuart McMillan, who will no doubt be considering the evidence that he has just heard and elicited, to make a short opening statement before we move to questions.
Thank you, convener. At the outset, I would like to thank a few people and organisations for their assistance in getting the bill to this point. First, I thank Phyllis Craig MBE from Action on Asbestos, which was formerly Clydeside Action on Asbestos, and Laura Blane from Thompsons Solicitors. Phyllis and Laura have been the genesis of the bill and have been consulted at every part of the process. This is the second attempt to bring such a bill to Parliament, and I believe that this bill is more tightly drawn and focused than my proposal in the previous parliamentary session.
Staff in the NGBU have worked tremendously hard to get the bill in shape to allow it to be introduced, and I offer my thanks to them. Finally, I thank my former staff members Shaun Kavanagh and Jenifer Johnston, as well as my present staff member Seonaid Knox, all of whom played their part in helping to shape the bill that is in front of the committee.
The bill’s purpose is to help to bring additional financial resource into NHS Scotland when there is a successful personal injury claim relating to industrial injuries. The claimant would not need to do anything extra, but the additional sum to the NHS would be consequential on a successful claim for damages. The liability to repay NHS costs would fall on the responsible organisation—that is, the organisation that was already required to pay the damages. That organisation might be an employer or its insurance company. The bill is not retrospective, so it would cover only harmful events that occurred after the bill came into force.
The bill will deliver two main things. First, after a period of time, it will introduce additional finances into NHS Scotland. Secondly, it will encourage employers to introduce better health and safety measures. As a result of that, I would expect a long-term reduction in insurance premiums. It would be unavoidable that premiums would rise in the short term, particularly as soon as the act came into force; employers would be liable for a new category of cost and sensible employers would extend their insurance to cover that risk. However, in the longer term, costs would certainly reduce.
Finally, as touched on, I would prefer the administration of the system that the bill would put in place to be done by the CRU. It already exists, so asking it to take on a new task would be easier and cheaper than establishing something new. Nonetheless, the bill would still be worth while if a Scottish equivalent of the CRU had to be established. I am sure that I will get some questions about the financial memorandum, which was touched on this morning. I am happy to take questions.
As you just said very clearly, we are talking about future events; nonetheless, on the basis of past events, you will have in mind some idea of how many cases that are not currently covered might end up being covered by the bill. How many cases might be involved annually?
One of the challenges in bringing forward the bill has been the financial memorandum, which has been touched on, and trying to get a figure for the number of cases to put forward has been difficult. In the financial memorandum, we used the figure of 514 cases, which is based on information that was provided by Thompsons Solicitors. I am also aware of the additional information that was presented to the committee by the Forum of Scottish Claims Managers and Alan Rogerson. I believe that 514 is a rough estimate; as time goes on, the real figure will clearly differ from that, including in relation to industrial diseases that we do not yet know about.
That is a helpful starting place nonetheless.
Good morning to Stuart McMillan. You talked a little bit about other industrial diseases, the definition of which I am interested in. Last week, we heard evidence that the term “industrial disease” might be a bit out of date and that we should perhaps use the words “disease or long-term injury from employment”. I am interested in the emergence of industrial diseases, injuries or illness caused by Covid, and mental health has also been mentioned. Last week, Thompsons Solicitors reminded the committee that liability would already have to have been established for a person to become liable for NHS charges; nonetheless, mental health conditions and emerging conditions such as Covid and long Covid might be issues to consider. Obviously, those are new issues. Might they be covered by the provisions in the bill?
That is a valid question, and my answer to it is yes. When we consider the information in the policy memorandum and the financial memorandum, “industrial disease” is defined broadly to include any diseases arising out of a person’s employment but also a disease arising out of another person’s employment—so long as there is a causal connection between the disease and the employment. However, the definition also includes diseases that confer eligibility for employment injury assistance, as defined by regulations under the Social Security (Scotland) Act 2018. Your point regarding Covid is worth considering, and I will do that but, ultimately, the short answer to your question is yes.09:30
Obviously, you have done fantastic work to prepare the bill and get it this far. I am interested in the fact that the Covid pandemic might have added complexity when it comes to considering financial implications.
That is a fair assessment. When the bill was being produced and worked on, Covid was not on the horizon. Things are a lot different now.
I will bring in Andrew Mylne, if that is okay, convener.
Andrew Mylne (Scottish Parliament)
Just to add to what Mr McMillan has said, it is important to bear in mind that, because of the way the bill sets up the definition of “industrial disease”, the provisions will apply only in cases where there is already a compensator. In other words, it will apply only where an employer—it usually is an employer—has accepted liability in the first place for what would become a damages claim, and the NHS cost recovery will flow from that. Therefore, in a case where someone contracts Covid, the employer would have to be liable and would have to pay damages for the circumstances in which the employee contracted Covid. The bill certainly would not apply automatically just because someone contracted Covid while they were at work. There would have to be that extra element.
However, subject to that, the definition is drawn fairly broadly. Obviously, there would be capacity to adjust that according to policy that the Government wished to impose on it in future.
I hope that that helps.
Emma, are you happy with those answers?
In that case, I call Donald Cameron.
Donald Cameron (Highlands and Islands) (Con)
Could Stuart McMillan provide more information on the estimates of the amounts that the new scheme is expected to recover? I ask that in the context of supplementary evidence that Alan Rogerson has provided to the committee in which he estimates that, over 12 years, there would be a shortfall of approximately £0.5 million between the costs of administering the scheme and the amounts recovered.
I saw that information. I must say that I am very much aware of the scepticism of the insurance industry towards any type of proposed damages legislation, although, of course, the bill is not that. However, that certainly was the case with the 2009 legislation relating to pleural plaques.
I saw the figures, and I can see why the insurance industry has suggested them, but I would point to data from the compensation recovery unit that shows that £66.8 million was recovered from employers from 90,219 settlements. That means that, on average, £740.80 was recovered per case. If that figure was applied to the estimated 514 industrial disease cases, that could generate more than £380,000 for NHS Scotland.
It has been difficult to get accurate information to nail down the financial memorandum. If the committee decides to move the bill forward, the minister’s earlier comments will be helpful and will potentially assist with getting more accurate data. However, I suggest that it is impossible to determine how many cases will come forward, due to the nature of the proposal.
I entirely agree with your last comment—it is very difficult to predict.
The current cap is set at £54,566 for 2020. Do you have a view on whether the cap should be increased or even removed?
I am quite flexible on whether the cap should remain as is, or be amended. I do not have a fixed position on that and am keen to find out what the committee would suggest.
David Torrance (Kirkcaldy) (SNP)
In evidence, the Forum of Scottish Claims Managers, the Association of Personal Injury Lawyers Scotland and Thompsons Solicitors Scotland believed that the compensation recovery unit would be best placed to administer the new scheme. What discussions have you had with the compensation recovery unit on the possibility of its undertaking the administration of the new scheme, and what is its view?
In October 2018, I wrote to the DWP, and I got a reply. The DWP indicated that it had previously been approached by the Welsh Government about the CRU administering its proposed legislation to enable the recovery of NHS costs relating to industrial diseases. The DWP explained that it was willing to discuss the proposals in order to understand the feasibility of the request. Scottish Government representatives were to approach the appropriate DWP officials to discuss any proposal to use the DWP CRU. Therefore, the DWP did not say that it would not do it; it said that it would have the dialogue to decide whether it would happen.
I have no further questions, convener.
George Adam (Paisley) (SNP)
I can see the challenges that you have faced in trying to get this worthy bill together. The whole point of the bill is to ensure that the claimants have a positive outcome. A number of issues have been brought up such as appeals and reviews and how the process would take longer and clog up the system. BLM commented that
“In our view, the complexities of disease cases are likely to mean that the administrative burden placed on NHS Boards is greater than that with which they are presently accustomed.”
That is an issue that would worry me. Is it anticipated that there would be an increased proportion of appeals and reviews under the new scheme for industrial disease claims compared with the existing scheme?
Obviously, the appeals process already exists. As is set out in paragraph 22 of the policy memorandum,
“Compensators must make the payments required by a certificate before appealing against it, unless this requirement is waived by Ministers; but a decision by Ministers not to waive this requirement may also be appealed to the First-tier Tribunal”.
In effect, appeals could still happen, but the payment must happen first, before any appeal.
In that case, there are likely to be more claims and therefore it would be more difficult, would it not?
It is hard to determine whether there would be more claims. I know that that was suggested in evidence last week, but it is genuinely hard to determine whether there would be more or fewer appeals. The key point is that the compensators must make the payments before appealing.
Have you taken into account the difficulty and complexity in assessing the cost of administering the scheme? That is also a concern.
I accept that there is a complexity to the proposal. However, at the same time, the proposal is to use the CRU process, to try to make it easier, in comparison with setting up something new.
I also accept that there are complexities in calculating the cost of NHS treatment in individual personal injury claims. However, the CRU operates a tariff system, with a cap that sets the maximum amount that could be claimed from any compensator. Therefore, although there are complexities, a process is already in place that would make it easier to progress and deliver my proposal.
Finally, I will ask about an issue that I want to get right in my own head. At this stage, none of us have heard anything from the CRU, have we?
No. The DWP is the United Kingdom Government agency that operates the CRU. In its reply to me, the DWP did not say that it would not operate such a scheme. It said that it would have to have a dialogue with the Scottish Government and then come to an agreement as to whether it would undertake what is set out in the bill.
Last week, I raised the difference between the abilities of small and medium-sized businesses and multinational companies to implement health and safety measures—that can be more difficult for the former. What considerations have been given to how the changes to liability resulting from the bill would be publicised?
No consideration has been given to that so far. However, I imagine that a few things would certainly need to happen. First of all, there would need to be a media campaign by the Scottish Government. Secondly, it would be extremely useful if organisations such as the Federation of Small Businesses, the Scottish Chambers of Commerce and trade associations helped to publicise information on the changes through the business community, particularly the small business community. I am sure that all the organisations that I have mentioned will have been involved in publicity campaigns on a wide variety of issues in the past, so I do not see there being any issue in that respect.
This is my final question. Will you clarify who you think would be responsible for getting out the information about the changes in respect of the liability for NHS charges to SMEs? As I said, I think that it can be a little bit more difficult for SMEs to implement legislation of this type. Who would be responsible for informing them?09:45
The Scottish Government would be the main body for sharing the correct information, but industry bodies would also play a pivotal role—it would not be just one organisation that undertook the task. I accept Brian Whittle’s point about smaller businesses and microbusinesses. However, in many aspects of public policy and policy changes, it tends not to be just one organisation, such as the Scottish Government, that puts information in the public domain. The Scottish Government might be the lead organisation, but other relevant organisations would also play their part in helping to get information out.
I think that Stuart McMillan has answered this question, but I will ask it for clarity. Would his bill result in any delays in compensation payments for people with industrial diseases? I understand his point that payments must be made before appealing, but would the bill have knock-on consequences for the rest of the process by adding complexity?
Mr Rennie is right that I touched on that. I do not see how the bill could lead to compensators delaying making payments in industrial disease cases any more than they do in accidental injury cases. I see no effect on that from the outcome that we want the bill to deliver.
You commented on liaising with the DWP. Have you had any political engagement? Have you spoken to the Secretary of State for Work and Pensions about whether she supports the DWP collecting such payments?
I have not spoken to the DWP; I wrote to it and, as I said, the reply gave the example of a discussion with the Welsh Government and said that the DWP would want to have such dialogue with the Scottish Government.
I support the bill in general, but my experience of dealing with bills has been that there are always issues in relation to unintended consequences. Have you analysed the bill’s potential impact on insurance premiums for Scottish businesses in comparison with those in the rest of the UK?
We looked at that. A fair assessment, which I touched on in opening, is that insurance premiums would inevitably increase in the short term or that additional insurance cover would be sought as a result of the bill. However, as employers took further precautions over time to protect their staff, premiums would reduce. Scotland could then become the safest part of the UK for employment. As we heard last week, if the bill were passed, it would bring health and safety benefits.
Staying on that issue, do you have specific evidence about when those costs would change? Clearly, no one on the committee would want to see businesses in Scotland incurring higher costs, which would make them uncompetitive compared with those in the rest of the UK.
I accept Mr Stewart’s point. However, although competitiveness might be an issue, I go back to my earlier comment that Scotland would also then be the safest place in the UK in which to work.
In the short term, premiums would no doubt increase—I am not running away from that fact, and I have to be up front about it. However, as I have indicated previously, if the bill were to progress and it could be seen that Scotland was a safe place in which to work, I suggest that the next step would be for premiums to reduce for those businesses that were doing the right thing and working to protect their employees. That could also have a beneficial effect on employees’ output, because they would feel safe in the knowledge that when they were going to work they would be able to come home again.
Therefore, although insurance costs would be higher in the short term, I expect that in the medium to longer term they would reduce because Scotland would also become the safest part of the UK in which to work.
I have a final question. Mr McMillan might have touched on the subject already, but I will ask it, just for the record. Do you consider that the bill would have a preventative impact that would result in there being fewer industrial disease claims in the future?
Yes, I do. However, I repeat the caveat that I made in a comment a few moments ago. We do not know what new industrial diseases will emerge in the future. Therefore my answer is yes in relation to the list of existing industrial diseases that we already know about. However, in relation to new cases I will have to say that I do not know, because we do not yet know what they might be.
I thank Stuart McMillan and our other witnesses for their attendance this morning. We have had a thorough examination of the issues affecting the bill, and the committee will proceed to have a further discussion on those in due course.
We will now move on. Agenda item 2 relates to the Forensic Medical Services (Victims of Sexual Offences) (Scotland) Bill at stage 2, which will clearly involve our hearing from a number of people besides members of the committee. As we will not be able to proceed to consider the bill until 10:45, I propose now to suspend the public part of the meeting briefly.
We will resume on a different platform just before 10 o’clock, in private session, which will allow us to deal with agenda items 3 and 4 in advance of agenda item 2. That is simply to accommodate the participants in the stage 2 proceedings, who are not with us at the moment. I ask members to follow the advice of our broadcasting team. The BlueJeans platform will remain live. However, in a few moments we will send out a request for a separate meeting on Microsoft Teams, which will give the committee an opportunity to deal with those other agenda items ahead of our public session on the bill.09:54 Meeting continued in private. 10:45 Meeting continued in public.
10 November 2020
3 November 2020
10 November 2020
What is secondary legislation?
Secondary legislation is sometimes called 'subordinate' or 'delegated' legislation. It can be used to:
- bring a section or sections of a law that’s already been passed, into force
- give details of how a law will be applied
- make changes to the law without a new Act having to be passed
An Act is a Bill that’s been approved by Parliament and given Royal Assent (formally approved).