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Tribune NOV 2010 by yaofenjin


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

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