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First reference to the Supreme Court by Counsel General for Wales


Recovery of Medical Costs for Asbestos Diseases (Wales) Bill

Following the first reference by the Counsel General for Wales to the Supreme Court of a Bill by the Welsh Assembly to test its constitutional validity, the Supreme Court has, in a significant constitutional judgment affecting the legislative competence of the Welsh Assembly, held (by a majority of 3-2) that the Recovery of Medical Costs for Asbestos Diseases (Wales) Bill was outside the powers of the Welsh Assembly.  It described the issues as ‘novel and important’ and observed that the Counsel General had been ‘right to recognise them as such and to make the present reference with a view to resolving them.’

Under s. 2 the Bill sought to impose retrospective liability for NHS charges on persons making compensation payments to victims of asbestos-related disease. By s. 14, the Bill sought to extend the insurance cover of liable persons (under s. 2) to their liability to pay the charges.

The majority judgment was given by Lord Mance (with whom Lord Neuberger and Lord Hodge agreed). It held that the Bill fell outside legislative competence because the mere purpose and effect of raising money which could or would be used to over part of the costs of the Welsh NHS was not sufficiently closely connected with the internal organisation and the delivery of NHS services to fall within paragraph 9 of schedule 7 to the Government of Wales Act 2006 as required by s. 108(4) of the 2006 Act. Even if (which was assumed but not decided) that paragraph 9 was capable of conferring some power to raise monies it did not amount to a general power to raise monies.

Albeit obiter, the majority expressed the view that Article 1 Protocol 1 of the European Convention on Human Rights was engaged and that the Bill was disproportionate. This was because of its retrospective nature for which special justification had not been established.

The minority judgment was given by Lord Thomas (with whom Lady Hale agreed) on a far narrower basis. It would have held that s. 2 of the Bill was within legislative competence as reflecting a power to impose charges on employers for the services in providing medical treatment and long-term care of employees and that s. 14 would also have fallen within legislative competence had it merely provided a machinery for enabling employers to claim from their insurers as if the charges had been reimbursed to the employees as a recognised head of damage. In those circumstances the Bill would have been proportionate to the legitimate aims sought to have been achieved. What made s. 14 outside the power of the Welsh Assembly and disproportionate was that it went much further and would have extended insurance policies to indemnify an employer for all liability under s. 2 if the policy provided cover to any extent.

The judgment is here. A video of the judgment is here.

A link to the BBC news report is here.

Richard Gordon QC appeared with the Counsel General for Wales in the reference.