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Earl Howe moved Amendment No. 36:

Page 9, leave out lines 19 and 20.

The noble Earl said: This amendment seeks to find out from the Minister why a payment into court should be treated as the making of a compensation payment, which is essentially how I understand this part of the Bill. I am sure that the Minister is well aware that a payment into court may be made for purely tactical reasons; that the payment may not be accepted by the accident victim; and that it may also be withdrawn. If the defendant's insurers subsequently do not agree to pay damages, or are not held liable by the court, it would be unfair to allow the NHS to recover treatment costs solely on the ground that a payment into court had at one stage been made. I am extremely anxious to know from the Minister why this provision has been inserted in the Bill. I beg to move.

Lord Clement-Jones: As a non-practising lawyer, I am equally baffled by this part of the clause. That is why I put my name to the amendment. It seems to me that the department is trying to place a significance on a payment into court which it is quite incapable of bearing. As the noble Earl has said, a payment into court is purely a tactic in litigation. Basically, it is designed to avoid costs falling on the defendant in circumstances where the plaintiff subsequently recovers less in damages than the amount of the payment into court. It cannot at all be seen as a settlement. It is purely designed to make sure that the costs do not fall on the insurer in certain circumstances.

Of course it is possible to turn it into a settlement--the payment can be withdrawn from the court by agreement and the case settled. But that is an entirely different matter, and, of course, that would be caught by the Bill as a settlement as it is properly defined. I can see that regulations need to be made as to how a payment in those circumstances is to be treated as a settlement, but I cannot see that it would be proper to treat the payment into court as a compensation payment. One would need some considerable convincing that there would not be a great degree of unfairness involved if it were to be treated as such.

Lord Glenarthur: While I fully accept what has been said so far, perhaps the Minister can also explain why subsection (2) extends only to England and Wales.

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Presumably what has been said applies in exactly the same way in Scotland, where it is not necessary; why should it be necessary in England?

Lord Hunt of Kings Heath: As I said earlier, NHS charges are payable when the authorised insurer makes a compensation payment. The authorised insurer may make a payment into court in an attempt to settle a claim, but at that point he has not made a payment of compensation. The offer may be accepted and payment made over to the plaintiff. In those circumstances, the award payment is made by the court and not the authorised insurer. Regulations will enable us to specify that in those circumstances the award payment, even though not made by an authorised insurer, will count as a payment of compensation by him and trigger NHS charges. We have no intention of collecting NHS charges when a payment into court is first made. As has been pointed out, there is no guarantee that such a payment would be accepted, and unless and until it is, NHS charges are not due.

This is not a straightforward issue. We do not want to clutter the face of the Bill with details of how payment into court is to be handled. We therefore need the regulation-making powers which the amendment would remove.

6 p.m.

Lord Clement-Jones: The Minister's reply was interesting. It seems that what he is saying is that the regulations should deal with payments out of court and not payments into court. That is where the matter seems to bite. It seems perfectly possible to frame in primary legislation that a payment out of court, where it technically comes from the court's bank account and not the insurer's bank account, is to be treated as a compensation payment where it is done at the direction of the insurer. That seems to be wholly possible under the clause. I can see that it is a technicality which needs to be cleared up but I do not think that the Minister has answered why the subsection should have that breadth.

Earl Howe: I agree entirely with what the noble Lord, Lord Clement-Jones, has just said. I cannot help observing that the wording of this clause is such as to make it clear that when a payment into court has been made it is treated as a compensation payment. In those circumstances, if one refers back to Clause 4, it is clear that when a compensation payment is made the certificate has to be settled within a period of 14 days. That is what the Bill says.

I am still rather concerned that a more sweeping provision is being introduced into the Bill that is not consonant with many of the circumstances that precede a payment into court. As I have explained, all kinds of situations trigger payments into court. For that act in itself to be treated as the repayment of compensation seems quite wrong.

Lord Hunt of Kings Heath: I thought I had made it clear that, although the authorised insurer may make a payment into court as an attempt to settle a claim, at

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that point he has not made a payment of compensation and that we have no intention of collecting NHS charges when a payment into court is first made.

Lord Skelmersdale: Is not the scheme in subsection (2) of Clause 14 exactly analogous to what happens now? In 1987 or 1988 I was the Minister at the Government Dispatch Box when we were reviewing and changing the 1948 compromise. Stretching my memory a long way back, I have a feeling that we made almost identical provision in that Bill.

Lord Clement-Jones: I entirely accept what the Minister said about the Government's intention, but the width of the wording of the subsection goes well beyond that. It would affect what is a major litigation tactic if the Government decided to have a different interpretation in the future. That is highly dangerous in circumstances where at present the Government's intention is a narrow, technical one. For the purposes of the Bill they can say that it is a compensation payment simply because it is the court paying it rather than the insurer. It is an important point for the protection of litigants in those circumstances.

Lord Glenarthur: Before the noble Lord replies to that point, will he answer my point about Scotland, which seems very relevant and so far has not been replied to?

Lord Hunt of Kings Heath: I shall reflect on the interesting points that have been made in the debate. I want to make it clear that we are talking about regulations covering cases in which a payment into court is made. We are not talking about a payment into court itself. They are exactly as found in social security legislation passed in 1997 and so do not introduce any new provision in principle in relation to this matter. On that basis, I ask the noble Earl to withdraw the amendment.

Earl Howe: I am grateful to the Minister. I shall read carefully what he has said. I beg leave to withdraw the amendment.

Lord Skelmersdale: Before my noble friend withdraws the amendment--I am slightly faster than my noble friend Lord Glenarthur behind me--can the Minister say what is the position in Scotland?

Lord Hunt of Kings Heath: My understanding is that this position does not apply to Scotland.

Lord Clement-Jones: Can the Minister clarify that point, whether by correspondence or in some other way? Does that mean that the same social security regulations do not apply in Scotland or that different provisions apply to Scotland? It is important to establish that.

Lord Hunt of Kings Heath: I think I prefer to write to the noble Lord on that point.

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Earl Howe: I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 14 agreed to.

Clause 15 [Application of Act to military hospitals]:

On Question, Whether Clause 15 shall stand part of the Bill?

Earl Howe: The presence of Clause 15 in the Bill is, I take it, a prima facie expression of intent to bring military hospitals within the scope of the new administrative arrangements for recovering costs of treating road accident victims, but the Explanatory Notes to the Bill do not indicate when the Government intend to make such regulations. If the Government intend to lay regulations in the near future, why is not Clause 15 expressed as a direct enactment rather than as an enabling power? Why bother with regulations at all when the provisions could be set out straightaway on the face of the Bill?

Presumably, military wings of civilian hospitals are part of the civilian establishment and would not be covered by this clause. Perhaps the Minister would confirm that. Can he also say how many military hospitals there are and to what extent they are in practice called upon to treat civilian accident and emergency cases? Has a calculation been done on what level of cost might be recouped by military hospitals as a result of the provision? Finally, I should be interested to know from the Minister the extent to which the average cost of in-patient and out-patient treatment at military hospitals has affected the overall levels of charge that the Government are proposing. Have these costs been taken into account in arriving at the flat rate figures? That concludes my questions.

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