Ministers will amend Britains compensation laws after a recent House of Lords ruling prevented thousands of victims of an asbestos-related cancer receiving a full payout, it was announced today.

A legal victory by the insurance industry last month made it harder for victims of mesothelioma and their relatives to bring a successful case if they had been employed by more than one company.

The Lord Chancellor, Lord Falconer of Thoroton, and John Hutton, the Work and Pensions Secretary, will amend the Compensation Bill – currently going through Parliament – to improve the system.

“The Government is acting quickly to help claimants suffering from this terrible disease to receive the compensation to which they are entitled as soon as possible,” Lord Falconer said.

“I intend to bring forward an amendment to the Compensation Bill to provide that in these cases negligent employers should be jointly and severally liable, so that the claimant can recover full compensation from any relevant employer. It would then be open to that employer to seek a contribution to the damages awarded from other negligent employers.”

Last month the Law Lords ruled in a series of test appeals that damages awards for mesothelioma must in future be decided on a “shared liability” basis in cases involving several former employers, none of whom can specifically be shown to be liable for the onset of the illness.

The decision by the House of Lords imposes strict limits on the effect of an earlier ruling that a single employer who was shown to have been negligent could be ordered to pay all damages due, even though other companies might also have been liable.

The judgment will affect compensation claims running into many millions of pounds.

The leading test case concerned Sylvia Barker, 58, of Flintshire, who was awarded 152,000 pounds in the High Court three years ago for the death of her husband, Vernon.

He died, aged 57, in 1996 after being exposed to asbestos whilst employed at John Summers and Sons at its Deeside steelworks and another company during 20-years of self-employment.

The court heard that Mrs Barkers damages would now be reassessed by the High Court to reflect the proportion of blame attributable to his time with Summers rather than 100 per cent liability for his illness and death.

Peter Williams, a partner at Field Fisher Waterhouse, said: “I am delighted the government has promptly indicated their intention to restore the rights of those suffering from mesothelioma to claim full compensation from any one employer.

“Whilst we do need to look at the detail and timing of the legislation we hope to be able to tell our clients and their families we can deal with their cases speedily and that they no longer face the prospect of losing large amounts of compensation through no fault of their own.”

Adrian Budgen, head of industrial diseases at Irwin Mitchell, said: This is great news for the thousands of victims of this cruel disease and redresses the balance in favour of the innocent victims of negligent working practices.

However, other lawyers were more sceptical of today’s move. Rod Freeman, a partner at Lovells, said: “The litigation system, which awards compensation based on finding blame for events that occurred many decades ago, is poorly suited to delivering justice to the victims of asbestos.

“What we have in the asbestos context should, fundamentally, be dealt with as a social tragedy rather than a legal dilemma. What is clearly needed, if true justice is to be delivered, is a system for delivering compensation based on need and injury rather than based on chance and blame.”

About 1,900 people die in the UK each year from mesothelioma, a cancer of the lining of the lungs or abdomen, which is almost always caused by exposure to asbestos.