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Lord Renton: Before my noble friend replies, we should all bear in mind that there is one important matter to which the noble and learned Lord referred; that is, the delays that take place under the present system. I thought that some of the delays were rather frightening, especially bearing in mind that the tribunals and the decisions to be made relate to people's daily needs and:

We should bear that in mind.

Lord Higgins: A number of noble Lords have far greater experience in the practical operation of the appeal procedure than I have. The Minister's reply sounded convincing. That being so, in a moment I shall beg leave to withdraw the amendment. As this is the last

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debate in Committee in which I intend to speak, perhaps I may echo the remark of the noble Earl, Lord Russell, who said on an earlier amendment what a tremendous advantage it is to have a revising Chamber which can deal with these matters.

The Bill is a substantially better Bill than it was when it started. To what extent the threat of being defeated on these controversial matters when they are returned to the other place may have been an incentive to a co-operative attitude I know not, but at all events we have made a great deal of progress. I should like to express my thanks to the three Ministers for the way in which they have responded to our amendments. There is a long way to go yet. We are faced with Phoenix directors, Budget proposals and a number of other amendments, but I should like to express my thanks. We have done a great deal of good and the Bill is much better than it was. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Hardie moved Amendments Nos. 161 and 161A:

Page 52, line 33, after (" 65,") insert ("(Validation of certain housing benefit determinations),").
Page 52, line 33, leave out (" 75 to 79 and this section") and insert ("(Pilot schemes) to 79, this section and Schedule (Transitory provisions) to this Act").

On Question, amendments agreed to.

[Amendments Nos. 162 and 163 not moved.]

Lord Hardie moved Amendment No. 164:

Page 53, line 4, at end insert--
("( ) section 2 so far as relating to war pensions;").

The noble and learned Lord said: I shall speak also to Amendment No. 165. These are minor and consequential amendments.

Clause 81(4) sets out the clauses of the Bill which do not extend to Northern Ireland. Amendment No. 164 adds Clause 2 to the list of exceptions to this provision. The amendment ensures that the provisions of Clause 2 relating to the use of computers applies to the administration of war pensions in Northern Ireland. This amendment is necessary since the war pensions scheme is administered on a UK basis, whereas for other benefits Northern Ireland has its own separate legislation.

Amendment No. 165 is simply an amendment to the drafting of Clause 81(4) in which the draftsman has thought it appropriate to make the wording clearer. These are minor and consequential amendments. I beg to move.

On Question, amendment agreed to.

Lord Hardie moved Amendment No. 165:

Page 53, line 6, leave out ("they relate") and insert ("relating").

On Question, amendment agreed to.

Clause 81, as amended, agreed to.

House resumed: Bill reported with amendments.

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Merchant Shipping (Convention on Limitation of Liability for Maritime Claims) (Amendment) Order 1998

Hovercraft (Convention on Limitation of Liability for Maritime Claims (Amendment)) Order 1998

Hovercraft (Application of Enactments) (Amendment) Order 1998

7.30 p.m.

The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Baroness Hayman) rose to move, That the order and draft orders laid before the House on 10th and 17th March be approved [27th Report from the Joint Committee].

The noble Baroness said: My Lords, the Merchant Shipping (Convention on Limitation of Liability for Maritime Claims)(Amendment) Order would enable the UK to ratify the 1996 protocol to amend the 1976 Convention on Limitation of Liability for Maritime Claims. The enabling power for the order is provided by the Merchant Shipping and Maritime Security Act 1997, which was passed by the previous Parliament with cross-party support.

The aim of the protocol is to increase the limits of liability set by the 1976 Convention on Limitation of Liability for Maritime Claims. Such an increase is necessary to reverse the effect of more than 20 years of inflation.

The UK was the first state to sign the protocol. The making of this order should ensure that we are also the first to ratify it. This would be fitting. It was at the UK's instigation that the IMO began work on the revision of the 1976 convention. The UK also played a leading role in the negotiations leading to the successful adoption of the protocol in 1996.

The 1976 convention entitles shipowners to limit their liability for certain general maritime claims. The applicable limit depends upon the type of claim and the gross tonnage of the ship. The Government believe that the long-standing principle of limited liability for general maritime claims remains valid, but on two conditions. First, the limits must be set at a level which ensures that most claimants should receive full compensation when they successfully sue a shipowner in respect of a general maritime claim. This order would ensure that this is the case when claims are brought in a UK court. Secondly, the right to limited liability must be balanced by a duty for the shipowner to take out effective insurance cover. We are pressing within the IMO for the adoption of measures to ensure that all shipowners meet this duty.

The order would provide increased protection for claimants without placing any undue burden on the UK shipping industry. The increased limits would apply to all claims considered by courts in the UK irrespective

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of the flag of the ship involved. They should not in themselves increase insurance premiums paid by owners whose ships are engaged in international trade. They may, however, result in a small increase in the insurance premiums paid by ships engaged solely in voyages within the UK. The precise amount of any increase is impossible to estimate, since the insurer should also have regard to the quality and track record of the ship when setting the premium. We take the view that this cost is justified by the need to update limits set in 1976 to provide proper protection to potential claimants.

Overall, the order will limit the limit of a shipowner's liability for general maritime claims by about two-and-a-half times. These limits are set in terms of the International Monetary Fund's special drawing right. For example, the 1976 convention sets a limit for claims other than those in respect of death and injury arising in respect of a ship of 50,000 gross tons of about 7.6 million SDR, or roughly £6 million. The 1996 protocol will increase this limit to about 18.2 million SDR, or some £14.5 million. Higher increases will be made for small ships. For instance, the corresponding increase for a ship of 500 tons will be from 167,000 to 1 million SDR.

These increases, like most of the provisions of the order, are determined by the terms of the 1996 protocol. There are three areas, however, where the 1976 convention and the 1996 protocol give states discretion. The order would enable the UK to take advantage of these three freedoms.

The first freedom relates to the Hazardous and Noxious Substances Convention 1996. This convention would establish a liability and compensation regime for damage caused by dangerous and polluting cargoes carried by ship. The regime is modelled on the existing international regime for oil pollution from tankers.

The 1996 protocol enables states to reserve the right not to apply the general limits of the 1976 convention to claims under the Hazardous and Noxious Substances Convention in order that claimants might obtain the higher compensation amounts available under that convention. The order will enable the UK to do this. The opt-out will come into effect automatically when the Hazardous and Noxious Substances Convention enters into force for the UK.

The limits set by the 1976 convention already do not apply to claims for loss or damage caused by oil pollution from tankers. There is a specific international regime for such claims.

The second freedom relates to small ships. States may set specific national limits for very small ships with a gross tonnage of less than 300 tons. At present the limit set for such ships under UK legislation is half that for ships of 300 tons. Consultation with interested parties demonstrated that while some favoured lower limits and others higher limits most agreed that we should retain the differential. This is therefore what the order would do.

The third freedom, perhaps of most interest to the House, relates to passenger claims. The protocol provides an opt-out clause allowing states to set higher limits, or unlimited liability, in respect of claims arising

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from the death of, or injury to, passengers. The order would give effect to this opt-out. This would not in itself have any effect on the amount of compensation available to meet passenger claims. The 1976 convention sets a global limit on all passenger claims arising from any particular incident. A separate convention--the 1974 Athens Convention relating to the carriage of passengers and their luggage by sea--sets a per capita limit; that is, a separate limit for each passenger.

At present the global limit set by the 1976 convention can further restrict the amount of compensation available under the Athens Convention. The protocol will prevent this. Moreover, as implemented by this order, the protocol would mean that the rules of the 1976 convention would cease to affect the method of calculating compensation payments for passengers. This would ensure that we have flexibility to make appropriate changes to the legislation implementing the Athens Convention. These changes could result from the work on the revision of the Athens Convention which is currently a top priority within the IMO.

However, as it might be some time before this work is translated into concrete measures, my department is also about to go out to consultation to seek views on what measures the Government might take in the interim.

I turn to the other two orders. The Hovercraft (Convention on Limitation of Liability for Maritime Claims (Amendment)) Order makes changes to the general limits of liability set for the owners of hovercraft under UK legislation corresponding to the changes made for ships by the merchant shipping order.

The purpose of the Hovercraft (Application of Enactments)(Amendment) Order is to complete the transfer from the Civil Aviation Authority of regulatory responsibility for hovercraft. The process of transferring such responsibility to the Maritime and Coastguard Agency began in 1997. This order completes the process. It is therefore part of a tidying-up exercise. It does not impose any burdens, financial or otherwise, on industry.

Moved, That the order and draft orders laid before the House on 10th and 17th March be approved [27th Report from the Joint Committee].--(Baroness Hayman.)

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