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Delegated Legislation Committee Debates

Draft Northern Ireland Criminal Injuries Compensation Scheme 2002

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First Standing Committee on Delegated Legislation

Monday 22 April 2002

[Mr. Alan Hurst in the Chair]

Draft Northern Ireland Criminal Injuries Compensation Scheme 2002

4.30 pm

The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Desmond Browne): I beg to move,

    That the Committee has considered the draft Northern Ireland Criminal Injuries Compensation Scheme 2002.

I welcome you to the Chair, Mr. Hurst. Some of us here are long-distance runners on this subject, as they will be debating the scheme today for the third time. I am sure that that will help us to stay in order, which will make your job easier.

On 11 March I asked this Committee to consider the draft Criminal Injuries Compensation (Northern Ireland) Order 2002, which has now been made. That order provides the Secretary of State with a power to make arrangements for payment of compensation to persons who have sustained criminal injuries in Northern Ireland. It further defines those arrangements to include the making of a scheme to be known as the Northern Ireland criminal injuries compensation scheme. Article 9 of the order requires the Secretary of State to lay a draft of the scheme before Parliament. It also determines that the scheme cannot be made until the draft has been approved by a resolution of each House. The draft scheme, which was laid before both Houses on 10 April, is the subject of today's debate.

Certain mandatory provisions must be included in the scheme. All of them are set out in the order. They include that compensation should be assessed on the basis of a tariff of injuries; that, in specific cases, additional amounts should be paid to compensate for loss of earnings and special expenses; and that a bereavement support payment should be made in fatal cases, to acknowledge grief. Arrangements must also include a provision for review of decisions taken in respect of claims, and for a right of appeal against review decisions to an independent body of adjudicators. The order also provides that the scheme may specify the circumstances in which an award can be withheld or reduced, or made subject to a number of other conditions. Time limits may be imposed on the making of claims for compensation.

Today's debate focuses on the detailed provisions of the scheme. I am asking the Committee to consider whether the proposed scheme falls within the parameters of the framework in the order. The proposed new scheme, based on the recommendations of an independent review of criminal injuries compensation in Northern Ireland, changes fundamentally the basis on which quantum for criminal injuries compensation in Northern Ireland is assessed.

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Lady Hermon (North Down): I welcome you to the Chair, Mr. Hurst, and I am delighted to see you here. It is good to see a new face.

I ask the Minister to reflect on the commitment that he gave during our debate on 11 March, when he promised that he would

    ''deal with all the points that are relevant to the scheme in my introductory remarks when we debate the scheme.''—[Official Report, First Standing Committee on Delegated Legislation, 11 March 2002; c. 26.]

That was said because of a conflict between remarks made about the order and about the scheme. Will he deal with the points outstanding from that debate in his introductory remarks?

Mr. Browne: I am very grateful to the hon. Lady for reminding me of that undertaking. Indeed, I propose to refer to it later in my speech. It was my intention to try to be faithful to that undertaking by incorporating in my remarks responses to all the issues raised then and during the ensuing debate, which has now been going on for some months. I give her an undertaking that, in so far as I can, I shall deal with those issues in my opening speech. If I do not, I shall endeavour to do so when winding up.

The scheme fundamentally changes the basis on which quantum for criminal injuries compensation in Northern Ireland is assessed. A tariff of injuries has been drawn up, listing all injuries that have ever been the subject of a claim in Northern Ireland under the current common-law scheme. Every injury has been allocated a value based on average awards under the existing statute. I have detailed the methodology used to calculate the tariff bands on two previous occasions in Committee. They reflect the mid-point of the values in the Compensation Agency's internal document ''Guidelines to Offers'', rounded up or down as appropriate and adjusted to fit the nearest tariff band, of which there are 29. For example, under the current scheme the most serious injury is permanent brain damage. That is valued between £200,000 and £350,000. For tariff purposes, the mid-point of £275,000 was calculated and then rounded to £280,000, to give band 29.

The minimum payable under both the proposed arrangements and those for Great Britain will be £1,000. However, the maximum will be £250,000 in Great Britain and £280,000 in Northern Ireland. That difference reflects the historical and jurisdictional differences governing the payment of compensation over the years. However, what is identical is the maintenance of the principle that tariff awards should, on introduction, reflect average awards under previous arrangements.

When the order was debated in Committee, it was pointed out that the tariff values are not the same as those listed in the green book—the ready reckoner published by the judicial studies board and used by the legal profession in civil cases. I agree that they are not—it was never intended that they would be. The same could be said under the current arrangements. The criminal injuries scheme is not a precise mirror image of damages in a civil case.

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I have also been asked about the savings that will accrue as a result of the tariff assessment. While cost cutting is not the reason for the proposed changes, I acknowledge that the new scheme will cost less to administer. Quantum may also be reduced in certain circumstances—for example, where an award would have attracted an above average value under the current guidelines. Equally, however, where an award would have been made at a lower than average value, quantum may now be higher. The overall expenditure profile is difficult to predict, given the demand-led nature of compensation and the increase in the numbers expected to become eligible for awards because of easements to the criteria for application.

Mr. Crispin Blunt (Reigate): I am glad to serve under your chairmanship, Mr. Hurst.

While the Minister is speaking about costs, he will recall that in the debate in the House on 23 May 1995, when the case was being made for Great Britain to move to the scheme that is now being introduced in Northern Ireland, the then Home Secretary made it clear that cost was an issue. There was an increase above inflation in the awards being made under the old common-law scheme, and one of the benefits of moving to a tariff scheme was to be that the increase in costs would be constrained. Based on what he knows about the increase in costs above inflation under the old scheme, does the Minister expect future savings? I accept that for now the two schemes will be roughly in balance.

Mr. Browne: I am grateful to the hon. Gentleman for raising the matter of costs, which the hon. Members for North Down (Lady Hermon) and for Montgomeryshire (Lembit Öpik) have both raised in earlier debates. I have consistently stated that costs have not been the driver for this change in the law, which has its roots in the review of the criminal injuries compensation scheme recommended in the report by Sir Kenneth Bloomfield, who also carried out the review. I am conscious that we did not follow Sir Kenneth's recommendations exactly, but I have previously dealt with the reasons for that. I am aware of the interest in the matter, and because I have been unable to give any precise indication of the cost effects on previous occasions, for the reasons that I have already alluded to, I have gone back and done some work on this, so the hon. Member for Reigate (Mr. Blunt) may get some indication of the likely cost effects of the provisions from my next paragraph.

I had this work done in response to the interest expressed during the debate in the Northern Ireland Committee, when I cited a figure of £70 million as the amount required to make the transition from the common-law system to a tariff system. I also explained that the demand-led nature of the expenditure and other unquantifiable factors made it difficult to forecast costs over a lengthy period. That remains the case, but further work has been done, and our best estimate is that year on year savings will not begin to accrue until year 3 of the operation, when it is possible that there will be a reduction in expenditure of £5.5 million. If hon. Members will bear with me, I shall set out some important qualifications to that.

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In the next year, there may be savings in the order of £12 million, of which £8 million will result from savings in legal costs, but those figures do not take account of any future reviews of the tariff. I have given an undertaking that the tariffs will be reviewed from time to time, as will the tariffs in Great Britain, to take account of inflation, among other considerations—not just inflation in the judicial sense to which the hon. Gentleman referred, but the inflation of prices.

The figures that I gave do not take account of any future reviews of the tariff, or of the expanded eligibility base that may attract—and for reasons that I shall come to, I fervently hope will attract—more applicants, especially from among people who have suffered child abuse.

Lady Hermon: Will the Minister elaborate on what he said about £8 million in legal costs? I am sure that that figure covers much more than simply solicitors' costs. There is concern, especially among members of the Law Society of Northern Ireland, about the implication that all that money is going to solicitors. Will he clarify that point?

 
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