Supreme Court overrules Welsh law

The UK Supreme Court has struck down a backbench Welsh law,
ruling that it fell outside the powers of the National Assembly.
(Pic : The Guardian)

I'm afraid this one's for the anoraks (also touched on by National Left).

In 2012, Mick Antoniw AM (Lab, Pontypridd) introduced a Member's Bill called the Recovery of Medical Costs of Asbestos Diseases Bill (aka. Asbestos Disease Bill - more here). Its key proposal was for insurers, on behalf of employers, to reimburse the Welsh NHS (via the Welsh Government) the cost of treating work-related asbestos diseases. This is potentially worth between £1-3million.

The Bill was passed 38-10 by the National Assembly in November 2013. Counsel General, Theodore Huckle QC, referred the Bill to the Supreme Court, as the Welsh Government expected the Association of British Insurers (ABI) to challenge the law.

On Monday (9^th February), the Supreme Court ruled by 3 votes to 2 that provisions in the Bill fell outside the competence ("beyond the powers of") of the National Assembly and were, therefore, struck down.

The Court's judgement (pdf) (short version [pdf]) was based on two grounds :

1. Sections 2 and 14 of the Bill as passed (pdf) - which placed a liability on insurers to reimburse the Welsh NHS any medical costs for treating those eligible for asbestos compensation – fell outside Schedule 7 (and other sections) of the Government of Wales Act 2006. This is because although the National Assembly has power to fund the NHS in Wales, they have no fiscal powers and therefore no power to place levies on third parties to fund health services.
2. The Bill "interferes" with insurers' rights under Article 1 Protocol 1 of the European Convention on Human Rights to the "peaceful enjoyment of their possessions". The retrospective justification  that was needed in order to apply a levy on insurers, covering the period before the Bill, was "absent".

Two judges believed the National Assembly does have the power to raise levies to fund health services, but only from patients, who would claim back costs from employers/compensator who would, in turn, be indemnified by insurers under usual insurance rules. This mechanism for recovering costs wasn't included in the Bill, however.

What happens next?

The Asbestos Disease Bill will now return to the Assembly, but
without the relevant sections it's likely the Bill will be withdrawn.
"Constitutional Crisis"? Probably not.
(Pic : indymedia.org.uk)

In some ways this is a legal first.

As far as I know it's the first case of a law from a devolved administration being (partly) struck down as unconstitutional; though devolved laws have been challenged in the past, including three from Wales (this one counted amongst them).

There was a previous case involving insurance giant AXA, who challenged the Scottish courts after a law passed by the Scottish Parliament – the Damages Act 2009 – was judged to have conflicted with a 2007 legal ruling. The ruling said insurers had no liability to pay compensation for work-related asbestos illnesses, in particular plural plaques. AXA also believed, amongst other things, that the law interfered with provisions within the Scottish devolution settlement to protect cross-border property rights.

The Supreme Court dismissed AXA's case, allowing victims and their families to make compensation claims. Last year, Westminster passed the Mesothelioma Act, which – ironically – created an insurer-funded compensation scheme (mesothelioma is directly-linked to asbestos exposure).

The difference between the AXA case and Mick Antoniw's is the Scots were able to argue that asbestos-related diseases were a personal injury actionable under Scottish law; so the law itself wasn't unreasonable, fell well within the powers of the Scottish Parliament and could only be challenged in exceptional circumstances.

The National Assembly can't do the same thing as criminal justice is non-devolved. Also, unlike Scotland, Mick's Bill intended to refund the Welsh NHS instead of being a straight-up compensation scheme for patients.

As mentioned earlier, the Supreme Court believed this fell outside the National Assembly's current powers to fund NHS services and was, effectively, a tax or levy on insurance companies - something the National Assembly doesn't have power to enact.

Not even Scotland has that power (Section A); though it hasn't stopped Stuart McMillan MSP (SNP, West Scotland) putting forward his own law with the same goal as Mick Antoniw. It'll be interesting to see what happens there.

Scotland's position hasn't always been protected and it's wishful thinking to believe a reserved powers model will make everything clearer. It won't.

In 2010, the Scottish Parliament had to introduce emergency legislation when the Supreme Court ruled it was unlawful for Scottish police to interview suspects in the absence of legal counsel (known as the Cadder ruling). This is despite the Scottish criminal justice system being completely separate from the rest of the UK.

So even if Wales had a separate legal jurisdiction, criminal justice system and reserved powers, it wouldn't prevent the Supreme Court striking down Welsh laws.

Nobody - except nationalists - can argue that regulations and levies on the insurance industry should be devolved, even if it raises funds for the NHS, because it's heavily-tied to financial service regulation. Such powers could only realistically come via independence. That's why Westminster can create a compensation scheme funded by contributions from insurance companies while Wales can't.

As for what happens next with the Asbestos Disease Bill, the law itself hasn't been struck down, only specific sections. It'll go back to the Assembly where it can be reconsidered. Unfortunately, not being able to draw payments from insurers guts the Bill, so it's likely to be withdrawn.

Mick Antoniw is, quite understandably, said to be "gutted" by the decision as he's put a lot of work into this, while families and victims of asbestos-related diseases supported the law's aims (more from Click on Wales).

Yesterday, Llywydd Rosemary Butler (Lab, Newport West) issued a statement on behalf of the Assembly Commission saying the ruling, "further demonstrates the complexity of the devolution settlement in Wales" and called for clarity (presumably a reserved powers model).

If this were a Welsh Government law, then the Welsh media would be full of small-n nationalism talking up "another slap in the face for Wales" etc. Despite that, there's no "constitutional crisis" here because the Supreme Court has done exactly what it was set up to do - the law wouldn't have seen the process through even if a reserved powers model were in place.

Likewise, the Counsel General did the right thing to refer it to the Supreme Court. If this had been given Royal Assent and then challenged in the courts afterwards, it's likely it would've been a grave (possibly costly) embarrassment to the Welsh Government and National Assembly.

The only way this law, as is, would've been passed is through sovereignty - whether that's the National Assembly enjoying the same parliamentary sovereignty as Westminster, or "the i-word" that dare not be spoken. So unless AMs are going to surprise me and start mentioning the "dreaded i-word" without getting a fit of the vapours, there's very little they can do about this, is there?