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Lord Rodgers of Quarry Bank: My Lords, with due respect to the noble Lord, Lord McIntosh, as well as to the Minister, I made a very specific reference to the opening remarks of the noble Lord, Lord McIntosh, about the noble and learned Lord, Lord Simon of Glaisdale. That alone I said was pompous. I hope that he will forgive me for that. I thought that the rest of his speech was absolutely splendid and not pompous at all.

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Baroness Blatch: My Lords, the noble Lord, Lord Rodgers of Quarry Bank, reduces many matters to personal comment. He knows and I know that we do friendly battle across this Dispatch Box. But perhaps I may say that, uncharacteristically for the tone of this House, the noble Lord, Lord Rodgers of Quarry Bank, has developed pomposity to an art form.

The noble Lord suggested that we should spend more—perhaps a related percentage of what is spent on, for example, Bosnia or prisons. I believe that he even evoked the GDP. During the course of the Bill it will be interesting to know what is the precise percentage of public expenditure that the noble Lord would wish us to spend on this scheme. Perhaps he wishes that to be totally unlimited.

We shall review and revise the benefits. Parliament will be involved in that process. However, I must ask what proportion of the claims will be met in the first year under the new scheme as opposed to the old scheme. I shall refer again to that matter.

The noble Lord referred to changes in the existing common law scheme before the tariff scheme starts. The only planned change is to allow structured settlements to be made where claims under the old scheme have not yet been settled. I believe that the whole House would welcome that opportunity being afforded to those set-back claims that have not yet been settled. The noble Lord went on to ask for comparative figures for the new tariff and the common law damages scheme. However, I gave them in my opening speech which I invite the noble Lord to read in Hansard tomorrow morning.

I have mentioned the action of my right honourable friend and I rest my case in that respect. The noble and learned Lord, Lord Ackner, referred to Clause 11 which allows the Secretary of State to make changes in the common law damages scheme. Perhaps I may link that back to the point that I have just made. There is nothing sinister about Clause 11. It puts beyond doubt that the common law damages scheme may continue until it is replaced by the new scheme and that my right honourable friend the Secretary of State may make any changes necessary. That will ensure, for example, that the necessary changes can be made to allow for those structured settlements to which I referred a moment ago.

The noble Lord, Lord McIntosh, referred to dependency payments and asked if they were subject to the 28-week rule. That is not the case. In fatal cases, there will be a fatal award for all qualifying claimants, plus a payment for loss of dependency where the qualifying claimant was financially dependent on the victim. That will be calculated from the time of the death of the victim.

Much has been made of incidents where someone may lose a left or right hand, and concerning the difference in treatment of those two injuries. The tariff awards are based on an injury to the dominant limb. Therefore, the actual basis is on the dominant limb. If, in Committee, the House wishes to suggest that there is a lesser payment for the less dominant limb, then of course we shall consider that if someone wishes to table an amendment. We would like to think that there is an

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overpayment concerning the less dominant limb and the right payment for the dominant limb. However, we shall await developments during the further stages of the Bill.

My noble friend Lord Colnbrook referred to loss of earnings. In cases where loss of earnings or special expenses are payable, the expectation is that the basic tariff payment will be made as soon as possible—that is, of course, once eligibility has been determined—rather than waiting for a loss of earnings assessment which, as my noble friend will know, could take more time. However, we take the point about paying people as quickly as possible.

The noble Lord, Lord Ewing, referred to the tariff scheme and said that it was not quicker than the common law damages scheme. As my noble friend Lord Campbell of Alloway, said, it is not possible to make proper comparisons on the basis of one year's experience of the tariff scheme, especially as the scheme was under challenge at the time. Priority was given to dealing with the backlog, which I am sure the noble Lord would agree was the right thing to do, of cases under the old scheme. Therefore, until the tariff scheme stands alone and the old scheme cases have been dealt with, it will not be possible to make proper comparisons. However, we are confident that the scheme will deliver speedier payments to most victims and we believe that there has been some support for that in the Chamber this afternoon.

The noble Lord, Lord Macaulay of Bragar, asked if members of the existing board would become members of the new panel. Well, we expect to invite some members of the existing board to become members of the new panel as, indeed, happened with the tariff scheme which operated last year. We shall, of course, be inviting people from a wider range of backgrounds to become members. Therefore, it is not quite the "horror house" that I believe the noble Lord described during the course of his speech.

As regards my noble friend Lord Campbell of Alloway, perhaps I may say, first, how very good it is to see him in his seat today following a very recent operation. Indeed, my noble friend returned to active duties in the House with unseemly haste. We wish him well as he recovers to full fitness.

Noble Lords: Hear, hear!

Baroness Blatch: My Lords, I am grateful to my noble friend, first, for what he said about the Bill; and, secondly, for the important point that he made. Any government have to balance competing interests—that is, those of the victim in this case and, of course, those who must fund the scheme, the taxpayers. However, as my noble friend said, the scheme remains the most generous one in the world.

I listened most carefully to the noble and learned Lord, Lord Archer of Sandwell, when he criticised the proposed new scheme. I hope that the noble and learned Lord is not too dismissive of additional payments to the fixed tariff of loss of earnings, costs of care and of the facility to opt for structured payments which allows for a tax-free income stream for life. That was, indeed, the impression that he gave to the House. If, on the other hand, the noble and learned Lord is advocating a more

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generous scheme, then, let him tell his colleagues in another place about it because I believe they will note what he says with interest. Alternatively, would the noble and learned Lord cap the overall amount, but offer a different form of distribution? If so, perhaps we will understand what the capping arrangements could be during the course of the Bill's proceedings.

Lord Archer of Sandwell: My Lords, I must have been more than usually incomprehensible. I thought that I said clearly that I wholly agreed with the noble Lord, Lord Carlisle, in that the new scheme is a great improvement on the old one.

Baroness Blatch: My Lords, I actually heard the noble Lord say that; but I also heard him dismiss the sort of "add ons" to the tariff scheme. Perhaps we should both read Hansard tomorrow morning to clarify the matter. I shall offer a fulsome apology if I misunderstood what the noble Lord said.

The noble Lord, Lord Ewing of Kirkford, and indeed, the noble and learned Lord, Lord Archer of Sandwell, both referred to Henry VIII clauses. I said that I would return to that issue. First, if the scheme were to form part of the Bill, any change, however minor, would have to be a matter for primary legislation which would present very considerable difficulty. Again, that point was made by my noble friend Lord Campbell of Alloway. The Bill will, of course, go before the scrutiny committee between now and the Bill's next stage. Indeed, that is an important part of the process. It will be for that committee to take a view on whether my right honourable friend is seeking proper powers or whether he is exceeding his office in that respect. In that case, no doubt the scrutiny committee will report the matter to the House.

The noble and learned Lord, Lord Ackner, referred to awards and suggested that they should be selected from a band; and, indeed, my noble friend Lord Carlisle referred to a banded system. Assessing an appropriate payment from a wide band for each injury description would, in effect, mean reverting to a common law method of assessment. It would reintroduce an element of subjectivity and consequent uncertainty for the victim. It would undoubtedly lead to more appeals and to a gradual, upward drift towards the top of the band.

I should also remind the House that we are not looking to provide finely judged compensation on the same basis as before; we are looking to provide a speedy and generous payment to the victim for the injury suffered. The tariff approach is open and transparent and victims will have a pretty good idea when they apply of how much money they are likely to receive. However, that would not necessarily be the case under a banding system, but it will, of course, be for the "add ons" to take particular account of the circumstances of each claimant.

The noble Lord, Lord McIntosh, referred to the rising cost as being due to the increase in crime. I believe that that fact was also mentioned by other speakers. There is no absolute correlation between the crime figures and the number of applications under the scheme. Since the scheme's introduction in 1964, it is true that violent

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crime has increased by 500 per cent., while the number of applications has increased by 3,000 per cent. Moreover, the amount of compensation paid has increased by no less than 40,000 per cent.

The noble Lord, Lord Rodgers of Quarry Bank, referred to the time limit. We intend to introduce a time limit of two years. The one-year limit under the old tariff scheme was criticised as being too short, but the three-year limit under the common law damages scheme is, we believe, rather too long. Police and other records are often weeded out at three-yearly intervals. That can make it most difficult to secure the documentary evidence needed to substantiate the claims. However, there will continue to be discretion for the authority running the scheme to waive the time limit in exceptional cases.

My noble friend Lord Carlisle referred to the Criminal Injuries Compensation Authority and said that it should be able to refer difficult cases to an oral hearing. We recognise that in such a scheme there will always be cases which are more difficult, especially those involving complicated loss of earnings and special care calculations. However, we do not believe that a power of referral for an oral hearing, as is possible under the current 1990 scheme, would be appropriate. The enhanced tariff scheme is administered in a different way from the current scheme. Under the tariff scheme there is complete separation of the original decision taking process and the appeals function. Therefore, it would not be appropriate for the CICA to refer so-called "difficult cases" to the appeals panel for an oral hearing. To whom would any dissatisfied claimant then apply? The appeals panel would have to become both judge and jury, thereby compromising the independence of the appeals process.

The Criminal Injuries Compensation Authority will be able to call upon the advice of senior experienced staff and lawyers in more difficult cases. I believe that that point was also made by my noble friend Lady Elles. However, the initial decision must be for the authority alone. If, after review—that is, if one is requested—the authority decides on the balance of probabilities that a certain award should or should not be made, that must be a matter for the authority. It will then be open to the applicant to decide whether to appeal to the independent appeals panel, which can then consider the matter afresh without having been involved in any way in the earlier decision.

The noble Earl, Lord Longford, was fairly condemning of the Government and their treatment of victims. It was the Government who introduced the victim support scheme in the first place. The Government have supported it well, and will continue to do so. The victim is central to our concern about fighting crime. We have toughened up the criminal justice system almost precisely because we are concerned about the plight of victims.

I was asked by the noble and learned Lord, Lord Ackner, why the tariff and the detail of the scheme were not on the face of the Bill. I believe that I have already referred to that. Until it comes before the scrutiny committee, in my view changes to the scheme, which sometimes are very minor, will require a primary place

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in the programme for primary legislation. I do not believe that that is the way to deal with the details of such a complex scheme.

My noble friend Lord Colnbrook and the noble Lord, Lord McIntosh, referred to the up-rating of tariff levels. The tariff levels have been left as they were when the earlier scheme was introduced on 1st April 1994. Those levels were based on board awards and included at the time an unquantified element for loss of earnings and special care plus a generous amount for inflation. Though we are now paying loss of earnings and special care, in addition to the tariff award in more serious cases, we have not stripped those elements from the tariff levels which are therefore higher than they would otherwise have been. There is already a considerable cushion built into the tariff. For the future, the intention will be to review the tariff bands every three years. We shall give further thought to how that review will be undertaken. The priority for now is to get the scheme up and running successfully. But the element of the award for loss of earnings and special care will go up automatically in line with wages and the costs of care.

My noble friend Lord Colnbrook referred to early payments. I agree with him: it is our intention that payment should be made as soon as possible once liability has been established. My noble friend also asked whether I would repeat assurances given by my noble friend Earl Ferrers that the Government would not hesitate to make any necessary changes to improve the tariff. First, I should set the context of the way in which my noble friend asked the question. He was referring to the 1994 tariff scheme which had to be withdrawn following the ruling of the Judicial Committee of this House. Under that scheme, the Government would have been able to make changes administratively without having to come to Parliament and so could have acted much more promptly. Under the new scheme the tariff and other key features bearing on quantum will require the prior approval of both Houses of Parliament, both before the new scheme is introduced and before any subsequent changes are made to the tariff or to those key features.

Therefore, I cannot give an unequivocal assurance to my noble friend that we shall make any necessary changes because they will no longer be in the Government's direct gift. What I can say to my noble friend is that the Government will continue to be receptive to ideas and suggestions to improve the tariff, or other aspects of the scheme. If it seems appropriate, we shall not hesitate to invite Parliament to approve the necessary changes just as soon as that is practicable.

Reference was made to the minimum award of £1,000. It was said that it should be abolished. That would not make sense. There must be a minimum threshold to stop the authority from being swamped with minor claims which will hinder the award of compensation to the more seriously injured victims who have more need for it. The minimum threshold of £1,000 has been at that level since February 1992, and we have no plans to raise it.

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The noble Lord, Lord Ewing of Kirkford, referred to the 28-week trigger point for loss of earnings. I believe that his point was that it would be particularly serious for those in part-time or low-paid temporary work, as well as for the self-employed.

There needs to be a trigger for loss of earnings and special care to differentiate those who are most seriously affected by injury, and those for whom we all have particular sympathy from those who are less seriously injured and who recover more quickly. The 28-week trigger was chosen because that was the period for which statutory sick pay was payable by employers. Those of working age who are ineligible for statutory sick pay should qualify for incapacity benefit or other state benefit, as I think the noble Lord knows.

The prudent self-employed may also have made provision for absence from work for whatever reason through business or other insurance payments. Successful claimants will all receive the basic tariff award for their injuries. The minimum payment is £1,000, and more serious injuries will attract much more. All tariff awards still have some unquantified element in them for loss of earnings and special care. Therefore, it is difficult to see quite how the absence of additional payment for loss of earnings will be likely to lead to hardship. Therefore, we believe that between incapacity benefit, the state statutory sick pay benefit and income support probably everybody is covered.

I should like to thank my noble friend Lord Windlesham for the work that he does with Victim Support. He will know that the Government take the work of that body very seriously. He referred to the levels of award on the tariff in 1996, and said that they were based largely on median awards paid in 1991-92. The 1994 tariff was indeed based on median awards. The most typical award was that made in 1991-92. But those awards were first reflated by 19 per cent. to bring them up to what was thought to be 1994 levels. The actual increase in average award over the three-year period was under 12 per cent. Therefore, the awards under the 1994 tariff were 7 per cent. higher than they need have been. From the point of view of Victim Support, that is a point worth noting.

Being based on the median award, under the old 1990 scheme, the 1994 tariff included elements of all the heads of damage payable under that scheme. I repeat that it included many of those now separately considered as add-ons. My noble friend also referred to the levels of award being reviewed only every three years, with no guarantee of an increase in line with inflation. We have given a firm undertaking that tariff levels will be reviewed every three years. For the reasons already given, we believe that to be adequate.

Reference was also made to some very low awards which it was said gave rise to concern. It was said that the sexual assault of children resulted in an award which was less than that for a broken finger. The tariff is based on 20,000 awards made by the board under the present arrangements, and therefore reflects what actually happens under common law damages. We believe that it is the most defensible basis on which to construct a tariff. It would be wrong to substitute someone else's subjective assessment for that more objective approach.

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But we have undertaken to keep the tariff under review. If, with the passage of time, it appears that some of the relativities in the tariff need to be changed, then I go back to my promise to my noble friend: we shall consider inviting the House to reconsider them.

My noble friend Lady Elles referred to social security benefits and how they related to compensation. It is necessary to deduct social security benefits and payments made in respect of loss of earnings to avoid claimants being compensated twice over from state funds in respect of the same period of absence from work. The rules for taking account of capital when assessing eligibility for benefits are a matter for the Department of Social Security. We understand that that department considers that it is unfair and impracticable to attempt to distinguish capital received under the scheme from capital received from other sources, such as insurance payments. That replicates the situation that exists under the present scheme.

My noble friend Lady Elles also posed the question why National Lottery prizes could not be capped and the excess used to fund the compensation scheme. Parliament has agreed that the five areas to benefit from the National Lottery are: the arts, sport, National Heritage, charities and projects to mark the year 2000 and the start of the new millennium. Therefore, it would not be possible to use Lottery money for the criminal injuries compensation scheme. To do so would require a change in primary legislation. Even if that were possible, international experience has shown that large prizes are an essential part of any successful lottery. Attempts to cap prizes in other countries have generally led to a significant loss of sales and therefore a consequent loss of lottery money for good causes. However, I have no doubt that that particular point will rattle around for some time.

My noble friend Lady Elles also referred to court compensation. I hope that she is comforted by the fact that the Government share her view that defendants should be made to pay compensation where appropriate. The courts are required to consider making compensation orders in all cases, but such orders depend upon an assessment of offenders' means. It is often the case that they do not have adequate means to pay compensation.

The noble Lord, Lord Macaulay of Bragar, asked whom we had consulted in the course of the intervening months. We have received many helpful comments and consultation from a number of quarters, including the Law Society and my noble friend Lord Carlisle, the chairman of the Criminal Injuries Compensation Board. Many of those comments are reflected in the new proposals.

I was also asked how the scheme affected the police and who are the major beneficiaries of the scheme. Like other claimants, the police, firemen and nurses should all receive broadly similar payments under the enhanced tariff scheme as they presently receive under the common law damages scheme, including past and future loss of earnings.

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I shall stop addressing individual points in view of the time. I shall sum up by reiterating that the Government are committed to doing their best both for victims and for taxpayers. We have considered very carefully all the representations that have been made about the scheme, and we believe that we have devised a scheme that achieves the right balance. It is a simple scheme. It is a workable scheme. And it is an affordable scheme. Yet it will remain the most generous in the world. We can all continue to take pride in that. I await, on tenterhooks, the further stages of the Bill. Meanwhile, I commend the Bill to your Lordships' House.

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