Campaigners have won in a High Court challenge to the government’s plans to subject mesothelioma cases to the provisions of the Legal Aid, Sentencing and Punishment of Offenders Act.

The Asbestos Victims’ Support Groups Forum UK had contested the decision of justice secretary Chris Grayling to remove an exemption for mesothelioma claims agreed during the act’s passage through parliament.

In today’s judgement, The Honourable Mr Justice Williams said the issue was whether Grayling had conducted a ‘proper review’ of the likely effect of reforms on cancer sufferers.

‘I conclude that he did not,’ said Williams. ‘It is now for the lord chancellor to carry out a proper review of the likely effects of the LASPO reforms in whatever manner he concludes will permit him reasonably to achieve the required purpose.’

Mesothelioma cases were left out of new rules in the Legal Aid, Sentencing and Punishment of Offenders Act in April 2013 which mean claimants can be charged up to 25% of their awarded damages to pay for success fees and after-the-event insurance. An amendment to the act places an obligation on the government to carry out and publish a full review of the effect of applying the new rules to mesothelioma sufferers.

The asbestos victims’ groups had argued in court that no such review had taken place before the government announced last December that it would lift the exemption.

The government argued in court that the required review was carried out as part of the consultation ‘Reforming Mesothelioma Claims’ which took place between July and October 2013. The Association of British Insurers intervened into the court action in support of the government.

Richard Stein from the human rights department at national firm Leigh Day, who brought the judicial review against the decision, said: ‘This government is seemingly intent on doing what it is told by the insurance industry against the best interests of those suffering from the negligent behaviour of the insured.

‘Today’s judgment should send a clear message to the government that it has to conform with the laws of the land and cannot ride roughshod over the interests of mesothelioma sufferers and their families to benefit the insurance industry.’

Tony Whitston, chair of the UK wide Forum of Asbestos Support Groups, called on the government to: ‘see this judgement as an opportunity to take a new approach based on justice for victims and not the profits of big financial institutions’.

He added: ‘The old plans were rooted in a culture of secret deals with insurers and flawed consultations, which excluded the victims of asbestos. Now is the time for a change.’

In August the justice select committee of the House of Commons criticised the government over its approach to compensation for sufferers of mesothelioma and urged the coalition to hold a fresh consultation.

MPs also expressed their surprise at a document dated July 2012 called ‘Mesothelioma Heads of Agreement’ between the government and the ABI.

A Ministry of Justice spokesperson said: ‘Mesothelioma is an awful condition which can destroy lives in a frighteningly short amount of time and we want to help sufferers and their families. We are committed to finding the best way to get claims settled fairly and quickly. ‘It remains our view that the Ministry of Justice review of this issue was conducted fully and openly and we are disappointed with this judgment. We will now consider our next steps.’

Andy Slaughter, shadow justice minister, said the case marked a ‘new low’ for the MoJ.

‘The government undertook to parliament to review the way mesothelioma cases are funded… Not only has Grayling broken that promise, the High Court has found, but he has done so as part of a squalid deal with his friends in the insurance industry. This heaps further embarrassment on an already beleaguered Lord Chancellor.’

James Dalton, head of motor and liability at the ABI, said it was ‘frustrated’ by a development ‘which delays long overdue reform of the legal system for mesothelioma sufferers’.

He added: ‘As a result, the legal costs of mesothelioma claims in England and Wales remain disproportionately high and claimant lawyers need to answer why they do not support lowering these costs and getting more compensation to mesothelioma sufferers.’