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Asbestos compensation shouting: “Tax dodgers go to hell! Take your
Tory mates as well!”
Mesothelioma claims targeted by ‘disgraceful Activists say the company has “dodged” a
£6 billion tax bill, but the firm rejects this. A
and perverse’ Court of Appeal ruling spokesperson said: “Reports suggesting we
have an outstanding tax bill for £6 billion are
by Neil Hodge incorrect, as this was never the case. It is an
urban myth.” In July, Vodafone agreed to pay
HM Revenue and Customs £1.25 billion to
A Court of Appeal decision last month will settle a long-running dispute over a tax assess-
make it more difficult for mesothelioma ment, although the company confirms it put
sufferers to claim compensation from their aside £2.2 billion to cover the problem. The
employers’ insurers. Judges ruled that some assessment relates to Controlled Foreign
employers’ liability policies – a mandatory Companies liabilities, which apply to firms
insurance cover that all companies must buy controlled by British residents but which pay
to protect their workers – may only tax on their earnings abroad at a lower rate.
apply once employees have developed the Private Eye, which ran the original investi-
deadly disease rather than when they were gation into Vodafone’s tax affairs, estimated
exposed to asbestos, depending on the the bill for CFC liabilities and other arrange-
policy’s wording. ments as “at least £6 billion”, and the maga-
Until 2006, it was common practice for zine quotes a senior figure at HMRC describ-
insurers to pay out on mesothelioma claims if ing the deal as “an unbelievable cave in” by
they were the insurer on cover when the expo- Revenue and Customs.
sure to asbestos occurred. But over the past But a Vodafone spokesperson said: “We
two years insurers have challenged this con- pay our taxes in the UK and all the other
cept after finding that some employers’ liabil- countries in which we operate.” Companies –
ity policies are worded differently – so some and the coalition Government – are vulnera-
only accept liability when symptoms occur. ble to charges of tax dodging, as the
On October 8, the Court of Appeal ruled Chancellor has embarked on a savage round
that if a policy was only “triggered” when of spending cuts and the Prime Minister is
injury was “sustained” – meaning the period Mesothelioma sufferer Leonard Eyre hopes his claiming that “we are all in this together.”
when the tumour develops – then the insurers compensation claim will not be affected by the
that provided cover at the time the inhalation Court of Appeal’s decision. Photo: Neil Hodge Schools
occurred would not be liable to pay out.
Alternatively, if the policy said it would pay Governor’s warning
out once an illness was “contracted”, eral secretary of the Union of Construction,
the claim would be triggered from when the Allied Trades and Technicians, said: “This over school quango cut
asbestos was inhaled, potentially 50 or 60 decision is disgraceful and perverse. This is
years after working for the company. not justice. Victims who were needlessly By René Lavanchy
Those insurers who have lost on this point exposed to asbestos will be prevented from
will be challenging the decision at the claiming compensation, leaving the victim
Supreme Court, though it will take at least and their family destitute.” School teaching assistants could be at
12 months for the case to be heard. increased risk of working unpaid overtime as
In the meantime, mesothelioma victims – Vodafone a result of the Government’s decision to scrap
who typically die within a year of diagnosis – the body that was preparing to negotiate pay
will remain uncompensated while the Protestors force phone and conditions for teaching support staff,
decision is awaited and insurers argue over according to the leader of Britain’s school
the technicalities of the wording of their giant to shut up shop in governors.
insurance policies. Education secretary Michael Gove
Sara Hunt, an associate at Shoosmiths tax dodge row announced last week that the School Support
solicitors who leads the personal injury team, Staff Negotiating Body, set up earlier this
says the judgment is unsatisfactory. “If the by Keith Richmond year, will be abolished, saying it did not fit
company where a claimant worked is no with coalition plans to deregulate pay bar-
longer trading, mesothelioma sufferers can gaining. Clare Collins, chair of the National
still pursue their claim if they can identify an Activists forced mobile phone giant Vodafone Governors’ Association, told Tribune: “We
insurer to pay out. In the past, they would to close stores around the country after a care- would be concerned that there isn’t proper
need to find the insurer who was on cover at fully co-ordinated Twitter campaign. The recognition for the role that support staff play
the time of their exposure. However, in light company shut its shops when demonstrators in schools,” adding: “It would be the expecta-
of the trigger litigation, if that insurer issued a turned up en masse to protest at what they tion of working additional hours outside con-
‘sustained’ policy, they will not pay out. claim is the firm’s failure to pay its proper tax. tact time.”
Depending when the company stopped Shops in Glasgow, Edinburgh, Brighton, Unison, the major union for some 500,000
trading, the claimant may then be left with no Bristol, Birmingham, Liverpool, Leeds, support staff, said it would consult its mem-
one to pursue a claim against.” Manchester and York – as well as the firm’s bers over possible industrial action, calling the
The decision is seen as a catastrophe for flagship store in London’s Oxford Street – move “a bitter blow” to low paid and mainly
sufferers and their families. Alan Ritchie, gen- were closed after campaigners turned up female staff.
5 November 2010 | Tribune | 7
