Background to coal health compensation claims

Under the terms of the Coal Industry Act 1994 on 1 January 1998 the health compensation liabilities of British Coal (BC) were transferred to the then Department of Trade and Industry (DTI), which later became the Department for Business, Enterprise and Regulatory Reform (BERR) and is now known as the Department for Business, Innovation and Skills (BIS). In October 2008 the responsibility transferred to the newly created Department of Energy and Climate Change (DECC). Within DECC the Coal Liabilities Unit oversees the Department’s obligations.


Coal health compensation schemes

British Coal (BC) was taken to court in 1996 under two separate group litigations supported by the mining unions. In 1997, BC was found negligent in relation to Vibration White Finger (VWF), and in 1998 for lung diseases including Chronic Obstructive Pulmonary Disease (COPD).

In each judgment the High Court set a ‘date of guilty knowledge’. For respiratory disease, it was 4 June 1954 in England and Wales and 4 June 1949 in Scotland. For VWF it was 1 January 1975. The Court judged that before these dates, with the knowledge and technology available to BC at that time, it could not be expected to be aware of the risks of exposure. However, after this date, BC should have been aware of the risks and taken steps to protect its employees against coal dust, fumes and vibration.


Claims handling agreements

Claims Handling Agreements (CHAs) for the two schemes were negotiated with a group of solicitors (for each disease) who were the chosen representatives for the large numbers of firms involved. The VWF Agreement was signed in January 1999 and the Respiratory Agreement in September 1999. The Agreements were necessarily complex as they defined exactly how claims would be dealt with by claimants' solicitors, DECC's claims handlers, the medical assessors etc. They specified the medical assessment process and the compensation a claimant would have expected to get if he had pursued his claim under common law through the courts. They gave claimants a fair entitlement tailored to reflect their disability. They were not flat-rate schemes and reflected other factors set out in the Court Judgments.


How much was paid out under the Coal health compensation schemes

For the Chronic Obstructive Pulmonary Disease (COPD) Scheme DECC received 591,768 claims and to date (June 2011) we have:

  •  settled 591,747 of those claims
  •  paid out over £2.3billion in compensation

For the Vibration White Finger (VWF) Scheme we received around 169,611 claims and to date (June 2011) we have:

  •  settled 169,609 of those claims
  •  paid out £1.7billion in compensation

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