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House of Lords

Tuesday, 18 November 2014.

2.30 pm

Prayers—read by the Lord Bishop of Worcester.

Local Authorities: Funding


2.36 pm

Asked by Baroness Farrington of Ribbleton

To ask Her Majesty’s Government what assessment they have made of cuts in funding to local authorities in the most deprived and least deprived areas of England.

Baroness Williams of Trafford (Con): My Lords, local government accounts for a quarter of all public spending. It is vital that local authorities help tackle the deficit by finding sensible savings and making better use of resources. Local government has risen to the challenge well and public satisfaction with council services remains high.

Baroness Farrington of Ribbleton (Lab): My Lords, I accept the Minister’s statement but would add that the University of Sheffield’s research shows that areas such as my own—Preston, Blackburn with Darwen, Liverpool and Manchester—have suffered disproportionately in terms of the reductions they are being asked to make. For example, Public Health England found that Manchester, Liverpool, Blackburn with Darwen and Preston face some of the toughest challenges. How can the Government justify giving reduced spending powers to local authorities in the most deprived areas and allowing greater spending in more affluent areas?

Baroness Williams of Trafford: My Lords, this is just not the case. The most deprived councils receive, on average, 50% more than the least deprived. I will give examples from either end of the spectrum. Middlesbrough gets £2,500 per dwelling and Poole gets £1,678 per dwelling.

Lord Laming (CB): My Lords, in the light of recent media reports, what steps are the Government taking to ensure that child protection services are improved, especially in those areas where the need is greatest?

Baroness Williams of Trafford: Child protection is an incredibly important area—certainly in light of some of the stories we have heard in recent weeks. All local authority officials working with children have a duty of care to those children. This is something we talked about a few weeks ago in terms of firming up some of those multidisciplinary arrangements. These are essential in joining together protections for children.

Lord Shipley (LD): My Lords, I declare that I am a vice-president of the Local Government Association. In its recent publication Rewiring Public Services, which has all-party support, the association estimated that local government could save the public sector £11 billion annually through joining up service delivery across the

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public sector as a whole. Does the Minister agree that this is a compelling reason to devolve more power to local areas?

Baroness Williams of Trafford: I certainly do, my Lords. I want at this point to congratulate councils in Greater Manchester, where I was formerly one of the leaders, not only on the steps that they have taken during the past 30 years in doing just that but on the confidence that the Government have placed in them in devolving power and funding to them.

Baroness Wall of New Barnet (Lab): My Lords, does the Minister accept the implications of local authority cuts for health services? We know from evidence that has come out today, and will continue to come out, of the number of local authorities that have cut beds in the community, ensuring that older people stay in hospital longer. This is affecting my not only own area of Milton Keynes, where I am chair of the Milton Keynes foundation trust, but all over the place. Local authorities are saying outright that this is why they cannot cope with having more beds, so they are closing beds in nursing homes.

Baroness Williams of Trafford: The noble Baroness brings up a very valid point. There needs to be a joined-up approach in both health and social care. It is to be hoped that in due course a better care funding package will deliver this so that there is a seamless transition from hospital to intermediate care to care at home.

The Lord Bishop of St Albans: My Lords, the dedicated funding for local welfare provision has been vital in providing a net for some of the most vulnerable in society. It is proposed that this will no longer be ring-fenced but will be part of a general grant to local councils, at a time when their budgets are increasingly pressed—indeed, there may be a move for that money to be used for core statutory services in future. If that money is not to be ring-fenced, will the Minister tell us how Her Majesty’s Government will monitor the effects of these changes and whether they will be willing to report back to your Lordships’ House on them, to ensure that the most vulnerable are not even further disadvantaged?

Baroness Williams of Trafford: The right reverend Prelate makes a good point. The ring-fenced funding pots were not always used for their intended purposes. It is the Government’s belief that in devolving funds straight to local authorities they will make the best use of them. I shall follow up the right reverend Prelate’s question on reporting back—I am sure that we can report back in due course.

Lord Foulkes of Cumnock (Lab): Will the Minister ask the Government to consider reviewing council tax and getting a few more bands at the top, so that those people who live in large houses—which might perhaps be described as mansions—could pay a bit more towards keeping local council services going?

Baroness Williams of Trafford: Perhaps that is a question for the noble Lord’s own leader.

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Baroness Gardner of Parkes (Con): Does the Minister think that it is justified for local authorities that provide care services to employ firms that are using zero-hours contracts and paying a minimal amount? I have asked this question of local authorities at a meeting here and they have said that they should not do it. Is this the reason why they do it, with people operating care facilities for patients simply not being paid an adequate amount?

Baroness Williams of Trafford: My Lords, zero-hours contracts are not always a bad thing and they suit certain people, but, certainly, anybody who is working for a local authority needs to be on the minimum wage.

Lord McKenzie of Luton (Lab): My Lords, there is a clear pattern here: just yesterday, we had a report from the LSE and the ISER looking at the effects of direct tax benefits and pension changes introduced under this Government. Surprise, surprise: it concluded that the poorest half of the income distribution lost out and the top half gained, and that these changes were regressive. To add to that, the Government have not only imposed the biggest funding reductions in the public sector on local councils—with funding cut by 40% over this Parliament —but they have ensured that those areas with the greatest need are shouldering the largest burdens. The noble Baroness cited some figures, but if one looks at what has happened throughout this Parliament, one sees that spending power—the Government’s favourite measure—has been cut for Liverpool by 27%, for Hackney by 27%, for Manchester by 26% and for Birmingham by 23%. However, lo and behold, for Waverley Borough Council and Wokingham Borough Council it has increased by 1%. If that is fair, what definition of fairness is the Minister using?

Baroness Williams of Trafford: My Lords, I take the noble Lord’s point about ring-fenced grants to councils such as Liverpool and Manchester, which lost a lot of theirs. Councils such as Trafford never actually had many ring-fenced grants so they had little to lose in that way. However, that effect has been dampened over the years so that it is not a cliff-like reduction. This Government have a different approach, which tries to rebalance the economy and puts growth at the heart of everything they do, including funding for local areas.

Strategic Defence and Security Review


2.45 pm

Asked by Lord Alderdice

To ask Her Majesty’s Government when they plan to re-examine the Strategic Defence and Security Review.

Lord Wallace of Saltaire (LD): My Lords, in January the Prime Minister informed the Joint Committee on the National Security Strategy that work was beginning on the next strategic defence and security review—SDSR. This work is in its preparatory stages and will intensify after the general election for the post-election SDSR.

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Lord Alderdice (LD): I thank my noble friend for that information. The last SDSR took place in the context of a Westminster election and the global economic crisis. From the point of view of many of us, it was overly impacted upon by those things. Since then the situation has changed. The Middle East is dissolving into chaos; the European Union is in disarray; cyberaggression has increased exponentially; and in our relations with Russia, we have not only found difficulties over Syria, Crimea, and Ukraine, but also an increasing statement by Mr Putin of the strength of its nuclear weapons. In the light of this, can my noble friend assure me that during this review, this House will be given an opportunity of having a number of serious debates on the question before the completion of the review, not merely a post-hoc debate after decisions have been made and a posture adopted?

Lord Wallace of Saltaire: I cannot of course commit the next Government in terms of managing the business, but there is time for this House to have a debate on one or two of these issues before then. Since the 2010 SDSR was published, we published in 2011 a cybersecurity strategy, in 2012 a climate change risk assessment and in 2013 the Ministry of Defence’s report on global strategic trends. We are keeping pace as far as we can with all the expected and unexpected developments that the noble Lord mentions.

Lord Davies of Stamford (Lab): Has it occurred to the Government that the cuts by many NATO countries in defence expenditure, in which this Government—our Government—unfortunately led the way, might just have had something to do with the much more aggressive policies pursued by Mr Putin over the past couple of years?

Lord Wallace of Saltaire: That is a slightly unfair question in many ways. Britain remains the second largest member of NATO in terms of the amount spent on defence. We are currently deterring Russia through the use of sanctions at least as much as through defence. So when we talk about national security we do not only mean defence in strict terms.

Lord Trefgarne (Con): My Lords, does my noble friend not agree that if by some cruel mischance the Labour Party wins the next general with the assistance of the Scottish nationalists, it will have to find the money to move Trident, not to mention covering all the unemployment in that part of Scotland?

Lord Wallace of Saltaire: I find it very interesting that the noble Lord should describe the possibility of the SNP taking a very large number of seats in Scotland away from the Labour Party as assisting the Labour Party.

Baroness Royall of Blaisdon (Lab): My Lords, coalition at the end of a fixed-term Parliament is a difficult beast. I would like to know what the Government’s policy is on having a strategic defence review in every Parliament as a statutory review. It is very difficult to ask a member of the Liberal Democrat Party because that is not, I think, its policy. I wonder whether the noble Lord could answer on behalf of the Government.

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Lord Wallace of Saltaire: The coalition Government promised in 2010 that there would be moves towards a regular SDSR. The noble Baroness will well understand that this is because the Labour Government did not have a strategic review between 1998 and the end of their 13 years in office. It is our intention that the next Government—however they may be constituted—should conduct a post-election SDSR as a matter of urgency.

Lord Palmer of Childs Hill (LD): Could the Minister give the House the government assessment of the security risks from terrorism that will be included in the review?

Lord Wallace of Saltaire: My Lords, terrorism, just like transborder organised crime, is clearly one of the major threats that we have to consider. There is a domestic dimension as well as an international one, and the Government are devoting considerable resources to both those overlapping issues.

Transatlantic Trade and Investment Partnership


2.50 pm

Asked by Baroness Falkner of Margravine

To ask Her Majesty’s Government what discussions they have had with other European Union member states about investor-state dispute settlement, in relation to the Transatlantic Trade and Investment Partnership.

The Minister of State, Department for Business, Innovation and Skills & Foreign and Commonwealth Office (Lord Livingston of Parkhead) (Con): My Lords, the Government have ongoing discussions on investor-state dispute settlement provisions in the Transatlantic Trade and Investment Partnership, TTIP, with EU member states, the European Commission, MEPs and other stakeholders. We want investment protection provisions that guarantee the right of Governments to legislate in the public interest while ensuring access to justice for investors who are discriminated against or treated unfairly.

Baroness Falkner of Margravine (LD): My Lords, I belatedly welcome my noble friend to the Dispatch Box. I think that this is my first interaction with him. He will know that in the past 15 years 1,400 investor protection agreements have been agreed by EU member states. In 2012, 60% of them were brought by the EU states alone and only 7.7% by the US. Therefore, it is very depressing to see that it looks like there may be a real backlash against ISDS. What discussions is my noble friend having with the Commission, which has now split the responsibility for this between the vice-president and the commissioner? Indeed, what are the UK Government doing to assure the public that state regulation for the public good will be exempted from this safeguard and that it will be a very good thing for the UK as part of TTIP?

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Lord Livingston of Parkhead: My noble friend is entirely correct that investor-state dispute settlement provisions have existed for a long time. There are a great number of them and, to the extent that they are used, they are often used by the EU and not by US corporations. We are having detailed discussions not just with other member states and the Commission but with MEPs. I had the joy of two days in Brussels just last week discussing such matters. We are also engaging NGOs—I am meeting a number of them and other interest groups—and we continue to make the clear case that we will ensure that the UK’s interests and public services are protected in all such discussions.

Baroness Coussins (CB): My Lords, what progress has been made on incorporating into TTIP some of the features of the investor-state dispute mechanism that were achieved in the free trade agreement with Canada, which I understand incorporated provisions about transparency of proceedings, costs and other issues that meet some of the concerns that have been expressed?

Lord Livingston of Parkhead: The noble Baroness is entirely correct. The agreement with Canada is far more the state of the art. Although we are waiting to see the results later next month of the consultation on ISDS, I hope and assume that they will incorporate much of what we have learnt from CETA. From speaking to the US representatives, I know that they too are very much for things like transparency in ISDS clauses, thus meeting some of the genuine concerns about some of the past ISDS clauses.

Baroness Ludford (LD): My Lords, is it not the case that these trade negotiations are probably the most transparent ever? Quite rightly, the negotiating mandate has been published, which is good, and it confirms that EU member states will agree to the inclusion of investor protection and ISDS mechanisms only if they allow EU member states to pursue legitimate public policy objectives, including the regulation of public health. This is a great improvement on the past and gives a guarantee that what matters is the substance.

Lord Livingston of Parkhead: My Lords, my noble friend is entirely right. The substance of the ISDS clauses is nowhere near as fearful as some of the claims. Although we can improve the transparency of the discussions, and the UK is certainly seeking to do that, the EU should at least be commended on the degree of public consultation that has taken place on these discussions.

Lord Stevenson of Balmacara (Lab): My Lords, we share the aspirations for TTIP, as long as the benefits flow to consumers and employees. We welcome the Minister’s mention of discussing the ISDS, which has become a lightning conductor for general discontent about the TTIP treaty. Given that we are talking about mature democracies with strong and robust legal structures, why does he not learn from the great example of Canute, drop the problematic ISDS and get on with selling the rest of the treaty to the country?

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Lord Livingston of Parkhead: Given the scale of investment by our two countries, it is appropriate that companies of all sizes have protections. It is also important that we create the right sort of clause for the future. We should not have two classes of country: ones with which we have ISDS clauses, because we do not trust their legal systems, and those with which we do not. It is important to establish the right sort of clause with the US, which, as the noble Lord says, is a stable democracy, that we can then roll out to the rest of the world, making sure that we have the rule of law.

Baroness Jones of Moulsecoomb (GP): My Lords, can the noble Lord assure the House that there will be no lowering of current EU standards on things like air quality, water quality, employment standards or animal welfare by virtue of TTIP negotiations?

Lord Livingston of Parkhead: The President of the EU, President Barroso, has made it very clear that TTIP is not about lowering standards. It was much the same with the single market which did not, I believe, create lower standards. EU laws and fundamental rights are going to be protected as part of these discussions and in discussions with the US. The US is not seeking to change that, although it regards some of the EU regulations as being too low and it also worries about similar matters.

Lord Foulkes of Cumnock (Lab): My Lords, does the Minister accept that there is genuine concern that if there is private investment from overseas in our health service and then an incoming Labour Government want to restore it into public financial control, there could be seriously high claims against us which would cause great difficulties? What is being done to ensure that that kind of claim does not cause great difficulties for the NHS in future?

Lord Livingston of Parkhead: I can assure the noble Lord that such claims would not arise because of TTIP, although there may be contractual claims which are a matter of domestic law. CETA, which was mentioned earlier, states:

“The EU reserves the right to adopt or maintain any measure with regard to the provision of all health services which receive public funding or State support in any form”.

It is quite clear that the decision about how these services are provided is a matter for national and, in the case of the UK, commissioning authorities. It is not going to be decided by TTIP or, indeed, any other trade agreement.

The Countess of Mar (CB): My Lords, can the Minister give the House an assurance that the influence of major multinational companies will not overcome the rights of individuals and small groups of people?

Lord Livingston of Parkhead: I can very much give that assurance. The groups we consult with in the UK and the steering group used by the EU are a mixture of large and small companies, consumer groups and NGOs. That will continue and we are hearing their voices very strongly. It must be understood that TTIP is going to

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be most beneficial to consumers, who will see lower prices, and to small companies which find the barriers caused by trade distortions far more difficult to cope with than the global multinationals. This will be the first agreement to have a small business chapter and I welcome that very substantially.

Baroness Farrington of Ribbleton (Lab): My Lords, I have listened extremely carefully to the Minister. He said that, provided the Government do not wish our National Health Service to be privatised, it will be protected. Can he give a guarantee that all parts of our current Government do not intend, with or without TTIP, further to privatise our National Health Service, because they have already started doing it?

Lord Livingston of Parkhead: Decisions regarding the NHS are made by the commissioning authorities. If I recall correctly, substantial privatisation of the health service took place under the previous Government. It will be a matter for the democratically elected Government and the commissioning authorities as to what may be done by private services and what may not.

Baroness Brinton (LD): My Lords, there has been a great deal of scaremongering about the National Health Service and TTIP. Might it be helpful for BIS to highlight the EU directive on NHS procurement which makes it absolutely clear that the NHS will not be caught by TTIP contracts?

Lord Livingston of Parkhead: That is absolutely correct. In fact, Commissioner de Gucht has been very clear:

“Public services are always exempted ... The argument is abused in your country for political reasons”.

That is pretty clear. The US has also made it entirely clear. Its chief negotiator said that it was not seeking for public services to be incorporated. No one on either side is seeking to have the NHS treated in a different way. The EU is very clear on that and trade agreements to date have always protected public services. That will absolutely continue within TTIP.



3 pm

Asked by Baroness King of Bow

To ask Her Majesty’s Government what assessment they have made of the recent drop in referrals of children for adoption by local authorities.

The Parliamentary Under-Secretary of State for Schools (Lord Nash) (Con): My Lords, since 2010, adoptions have risen by 63% to a record level of more than 5,000 last year. However, there has been a significant decrease in children coming into the system since September last year. This appears to be in response to particular court judgments. Information collected by the national Adoption Leadership Board has led it to conclude

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that there has been some misinterpretation of those judgments. Consequently, the board has produced guidance so that everyone who works on adoption can be confident that they are interpreting the judgments correctly.

Baroness King of Bow (Lab): My Lords, as the mother of three adopted children, I welcome the Government’s attempt to reform adoption. However, according to the most senior family court judge in England and Wales, Lord Justice Munby, the Government’s desire to speed up adoption has clashed with government cuts to legal aid. Is it not unacceptable that the state can say to parents, “We will take away your child” and at the same time say, “We will not guarantee you a lawyer”? Apart from adding to delays, does the Minister have any sympathy for parents facing this situation or, indeed, for Lord Justice Munby, who must rule on such cases and who says that this approach is “unprincipled and unconscionable”?

Lord Nash: Sir James Munby, the president of the Family Division, has stated his support of the aims of the myth-dispelling document that we published last week. He has helpfully clarified the rights of parents in this regard.

Baroness Walmsley (LD): My Lords, does my noble friend agree that although it is highly desirable that children in need should find a loving for-ever family, as they have in the case of the noble Baroness, Lady King, it is much better, where it is in the child’s best interests, to keep them at home with their parents? Could it be that some of the Government’s prevention measures are having an effect here? Could my noble friend say something about the success of the family nurse partnership and some of the pilot schemes set up by my right honourable friend Sarah Teather to provide further support to parents in different parts of the country? Will that scheme be rolled out?

Lord Nash: I entirely agree that the interests of the child are paramount. As far as the partnerships are concerned, I will write to the noble Baroness with more details.

The Lord Bishop of Worcester: My Lords, does the Minister agree that, whatever the assessment of these figures, there remains a task to be done concerning negative perceptions about adoption in this country? Does he agree with the observation of a judge in the adoption of one of my children that whereas conception is sometimes a biological accident, adoption is always an act of love? Does he agree that it is a noble task and a noble thing to do? What are the Government doing to promote adoption in that light?

Lord Nash: As is well known, the Government have in place a very active reform programme on adoption which has had quite a substantial effect. I agree entirely with the right reverend Prelate’s comments. I was interested to see recent research by Professor Julie Selwyn at Bristol which shows that only 3% of adoptions break down. I think there is cross-party consensus that where there is no option of staying with the birth family, a long-term relationship with loving adoptive parents who have been well scrutinised is clearly in the best interests of the child.

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Lord Elystan-Morgan (CB): My Lords—

Baroness Billingham (Lab): My Lords, every day delayed in finding a loving home for a child is a day wasted of the life of that child, and I speak as one who spent part of my childhood in care; I well remember the insecurity I felt. The Minister indicated that there had been some misunderstandings between various organisations and authorities. Can he assure this House that everything is being done to speed up and remove any obstacles? Adoption is such a crucial part of a child’s life that it has to be given the highest priority.

Lord Nash: I can assure the noble Baroness. I had a meeting yesterday with Sir Martin Narey and he is absolutely passionate about ensuring that all steps are in place to speed up adoption.

Lord Elystan-Morgan: Does the Minister agree that when a court is deciding on the question of adoption, it should make an adoption order only within the strict terms of the Adoption Act 1976? An adoption order should be made in the best interests of that child and most consistent with its welfare. Even though local authorities may be reluctant to have long-term, laborious care orders, those pressures should be resisted unless a compelling case is made out strictly in accordance with the wording of the statute.

Lord Nash: I agree entirely with my noble friend. Sir James Munby and the courts have been helpful in clarifying this recently.

Lord Lexden (Con): My Lords, what action have the Government taken to improve and strengthen the overall support available to families who adopt children?

Lord Nash: We have just announced a £20 million adoption support fund to be rolled out nationwide from May, following some very successful pilots across 10 councils.

Baroness Armstrong of Hill Top (Lab): My Lords, can the Minister tell the House what the Government are doing to support kinship care? That is overwhelmingly the most successful means of looking after children who are very vulnerable.

Lord Nash: We are doing quite a lot. I believe that the adoption support fund will be available for kinship carers. I will check and write to the noble Baroness.

Childcare Payments Bill

First Reading

3.07 pm

The Bill was brought from the Commons, endorsed as a money Bill, and read a first time.

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Social Action, Responsibility and Heroism Bill

Social Action, Responsibility and Heroism Bill 9th Report from the Delegated Powers Committee


3.07 pm

Clause 1: When this Act applies

Amendment A1

Moved by Lord Hunt of Wirral

A1: Clause 1, page 1, line 3, after “determining” insert “—

(a) ”

Lord Hunt of Wirral (Con): My Lords, I declare the interests set out in the register, including in particular my partnership within the global legal firm, DAC Beachcroft, as well as my other entries. The amendments in my name are designed to promote responsible behaviour by motor insurers in order to focus on getting people better rather than by paying them cash which is not then used for treatment.

In putting these amendments together, and in this speech in particular, I have borrowed substantially from a very good report published last July by the insurers, Aviva, called Road to Reform, which I commend to the House. As your Lordships know, for many years I have urged that we should adopt a rehabilitation system of this kind for minor injury claims. It chimes very well with the Government’s agenda of people taking responsibility for themselves, so we should embrace the concept of providing treatment for those who need it rather than compensation and legal costs for what has now become hundreds of thousands of claimants every year, many of whom do not need treatment at all. That is what lay behind the amendment that I successfully moved during the passage of the Compensation Act 2006, which is now Section 2 of that Act:

“An apology, an offer of treatment or other redress, shall not of itself amount to an admission of negligence or breach of statutory duty”.

In these amendments I seek to go one stage further by substituting treatment for payment in low-value cases. We are not talking about serious injuries here, but about temporary distress or discomfort which leaves no lasting effect. According to Aviva’s research, 98% of drivers want further costs taken out of the system to keep motor insurance premiums affordable. We should therefore encourage people with genuine minor injuries simply to make a claim to repair their body rather than for cash. After all, we get the car repaired—why not the genuine minor injury as well? By doing that, we will effectively look after those who need treatment and at the same time will tackle those who seek to abuse the system.

UK motorists do not have the weakest necks in Europe; we have a whiplash culture because as a society we have not taken the same stance as other European countries to avoid these claims in the first place. In other countries you have to prove a level or percentage of disability before you can even make a claim. Aviva’s data show, for instance, that 94% of all personal injury claims for a UK motor accident are for minor whiplash injuries, while in France it is estimated that whiplash accounts for just 3% of personal injury claims.

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I hope that I have taken the House with me so far. How, then, do we turn this into meaningful legislation? These amendments propose a threshold of 15% loss of function or less. Doctors will make better sense of that than I can, but I understand that a similar measure has been used in New South Wales since 2002. In case it is felt that we have little to learn from our Australian friends either on the sporting field or off it, the DWP also uses a threshold of 14% for payment of industrial injuries disablement benefit, which is paid only for lasting conditions. In truth, I am not necessarily wedded to the 15% figure as long as there is a clear dividing line between minor road traffic injuries not deserving of compensation if treatment can be and is made available at insurers’ expense, and more significant injuries where compensation can be properly targeted. Aviva estimates that if the simple measure in this amendment was adopted, with insurers still covering the cost of treatment for those who genuinely need it, that could save £32 on everybody’s premiums.

I have spoken before about the other cause for concern behind this approach. As the Association of British Insurers and the British Insurance Brokers’ Association, which I have the honour to chair, put it, we have become the “whiplash capital of Europe”. Fraudsters know it and they are exploiting the ease of our current compensation system. There has been a growing rise in the frequency of whiplash claims and a significant increase in the number of so-called “crash for cash” scams faced by insurers. Particularly troubling is the increase in the number of induced accidents where fraudsters deliberately target innocent motorists to cause an accident. According to Aviva, these increased by 51% last year, and that has to be a cause of major concern.

I am not sure that I have yet persuaded the noble Lord opposite but I am told by my noble friend Lord Henley that to persuade him I just have to quote from Dickens. I am not sure whether that is right—

3.15 pm

Lord Beecham (Lab): I have to say that I have no great expectations in that regard.

Lord Hunt of Wirral: I should stop now. However, I want to stress here that we are not talking about Fagin-type organised crime or Bill Sikes’s opportunist crime, but about the inflation of otherwise genuine claims. It has become a huge industry and insurers are now being forced to spend millions of pounds to tackle it. Organised gangs are at the heart of the increase in the number of these induced accidents. “Crash for cash” not only threatens motorists’ safety but also their pockets. It is estimated that it adds about £400 million to the annual cost of car insurance.

It has become an unfortunate fact that as a society we are faced with so many whiplash claims. It would be easy just to blame the claims farmers, and the House has heard my views on them before. However, despite a series of measures, often encouraged in this House, they continue to proliferate. They plague us with nuisance calls and texts about injury claims from accidents in which we have never been involved and that we have never heard of.

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On the subject of nuisance calls, although I welcome the recent consultation by the Department for Culture, Media and Sport, I believe that the current threshold of substantial damage or distress is just too high and that the Information Commissioner’s Office needs to lower the test to ensure that it can tackle more effectively those who are abusing the system and bombarding the British public. I beg to move.

Lord Pannick (CB): My Lords, this Bill has a purpose—a futile and anodyne purpose in the view of many of us who spoke at Second Reading, but a purpose none the less. Its purpose is to encourage heroism, volunteering and action taken for the benefit of the community. I respectfully suggest to the noble Lord, Lord Hunt, that his amendments are a long, long way away from the purpose of this Bill.

Lord Hunt of Wirral: It may assist the noble Lord if I explain that I was motivated by the speech of the noble and learned Lord, Lord Lloyd of Berwick, in particular, to think of amendments that would add substance to the Bill.

Lord Pannick: I am delighted to hear that because when the noble and learned Lord, Lord Lloyd, comes to move his proposal that Clause 2 should not stand part of the Bill, the noble Lord will no doubt express his wholehearted support for that proposition.

These amendments have no place in this Bill. They would fundamentally alter the scope and effect of the Bill, very much to its detriment. They would prohibit the courts from awarding damages in respect of personal injury in defined circumstances. The existing provisions of the Bill simply identify factors for the court to take into account in deciding whether there has been a breach of the duty of care.

I am also troubled by the detail of the amendments, and I am not reassured at all by what the noble Lord has just said. The amendments beg a large number of questions as to what it means for the defendant to “fund treatment”. At what level of care would that happen, and who is to assess the adequacy of such treatment? If the defendant’s insurer pays for my treatment as the victim of a car accident, would these amendments prevent me recovering compensation for pain and suffering as a result of the accident? That presumably amounts to damages,

“in respect of any personal injury”,

but the amendments seem to prohibit that.

I confess that I am puzzled by the amendments. If the defendant or their insurer has already funded adequate treatment, surely the claimant is going to have to give credit for that in seeking damages. I also do not understand why, if the noble Lord thinks that his amendments are such a good idea, they apply only in respect of,

“loss of function of 15% or less”.

For the Committee to give the amendments any encouragement would in my view, to quote Clause 3 of this curious Bill, not be,

“a generally responsible approach towards protecting the safety or other interests of others”.

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Lord Beecham: My Lords, I begin by congratulating the noble Lord, Lord Hunt, on his recent appointment, or on its announcement, as an honorary bencher of an inn of court—I am not quite sure which one. He is to be complimented on that award, whichever one it is. Having said that, I cannot extend that degree of praise to the noble Lord’s amendment. I respectfully adopt much of what the noble Lord, Lord Pannick, has said in that regard.

The amendments seem to elevate insurance companies to the pantheon of heroes—and there may be a degree of heroism involved in that. Alternatively, it characterises them as pillars of social action and responsibility. That is not a view generally taken of insurance companies, for pretty good reasons. We now have a SARAH Bill; the noble Lord seems to want a RIP Bill—a “reduce insurance premiums Bill”. While many of us would want to see insurance premiums being reduced, there may be better ways of achieving that, one of which might be to look at the profits that the insurance companies make.

In any event, as the noble Lord, Lord Pannick, has already demonstrated, there are a number of queries about the provision. One point that he may not have made is that it is open to the NHS when it offers treatment to recover that from the other driver or his insurers. I am not sure what the Bill adds to that provision. While I entirely agree with the noble Lord, Lord Hunt, that it is entirely necessary to deal with the abuses of the present system, this amendment will achieve very little in that respect. The criticisms made by the noble Lord, Lord Pannick, seem to me overwhelmingly persuasive. In particular, the amendments do not lend any substance to an already thin Bill, and I agree with the noble Lord that they are basically out of scope.

I congratulate the noble Lord, Lord Hunt, on his ingenuity in trying to achieve the objectives that he sets out—and he is, of course, entitled to achieve those objectives—but surely this is not the Bill in which to do that. I hope that, when he has heard what the Minister has to say, he will not press the amendment either today or at a later stage, because we will certainly not support it from these Benches.

Lord Walton of Detchant (CB): My Lords, I had no intention of speaking on this matter when I came to listen to the debate this afternoon but, as a neurologist—a doctor concerned with damage to the nervous system—I have over the years seen a considerable number of patients who were referred to me for an opinion either by a firm of solicitors or by an insurance company. They sought evidence as to whether there was a case to be made out suggesting that the so-called syndrome resulting from whiplash—the sudden flexing and extension of head and neck following a car accident—represented a genuine disability.

I have great sympathy with what the noble Lord, Lord Hunt, had to say as there is clear evidence in some cases that a whiplash has caused significant damage to the spinal cord or to the ligaments of the neck. This evidence can be identified by a number of medical methods. However, there is also clear evidence that a very large number of individuals referred with that type of injury are not suffering from a significant disability. As the noble Lord said, the “crash for cash”

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issue has arisen in a considerable number of cases over the last year or two, where it is perfectly clear that the symptoms are feigned and are not generally physically realistic. These attempts to obtain compensation are scams. I am persuaded by what my noble friend Lord Pannick and the noble Lord, Lord Beecham, have said. Frankly, I do not believe that this significant issue is properly dealt with by the Bill. Therefore, despite my sympathy with what the noble Lord, Lord Hunt, said, I feel that I cannot support the amendment.

The Minister of State, Ministry of Justice (Lord Faulks) (Con): My Lords, I am extremely grateful to my noble friend Lord Hunt for bringing these amendments before the Committee and for his explanation of some of the problems that have beset our legal system and our society more generally. They are problems of which the Government are extremely aware and on which they have taken, and are taking, various steps to try to improve the situation. For example, the compensation culture, such as it is, was certainly fed by the cost incentives identified by Sir Rupert Jackson in his report. The reforms have made the costs of litigation much more controlled and your Lordships approved Part 2 of the LASPO Bill, which has resulted in a much more moderate personal injury claims litigation scene.

Noble Lords will be well aware of the dishonesty that sometimes besets personal injury claims. The Government are bringing forward provisions in the Criminal Justice and Courts Bill whereby, if a claimant is fundamentally dishonest, even if some element of the claim is genuine, he or she will not be able to recover any damages at all. We are also acutely aware of the problems with claims management, referral fees and the like. I am glad to say that claims management firms are reducing in number very considerably as they find this a less profitable field in which to plough their furrow. They are now much better regulated and fines of a considerable order are imposed on them if they act in a way which contravenes the law, so all these measures are going in the right direction.

Furthermore, the Government are setting up a regime to deal with whiplash claims. The noble Lord, Lord Walton, identified the difficulty of diagnosis in whiplash cases, which I think is well acknowledged in the medical profession. Although some people undoubtedly genuinely suffer the consequences of whiplash injuries, these injuries are not easily detectable objectively through scans or the like. Thus there is the temptation for claimants to bring claims, often egged on by third parties. It is often easier for insurance companies to pay out sums of money, even though they know that these claims may well be false, because the cost of fighting them is prohibitive.

All of this is a most unattractive landscape. My noble friend Lord Hunt is quite right to bring all those issues to the attention of the Committee. Before I move on to the amendments I should also say that it was as a result of my noble friend’s contribution to the Compensation Act 2006—to which he referred—regarding the provision on apologies not being an admission of liability that has helpfully altered the conduct of some litigation. Indeed, I can declare an interest, having relied on that section in one case.

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3.30 pm

Amendments A1 and A2 would widen the scope of the Bill so that in addition to applying when the court is considering claims in negligence or for breaches of relevant statutory duty, it would also apply when the court is determining whether to pay damages to the claimant in respect of injuries suffered in a road traffic accident. Amendment 7A would make it clear that the court may decide not to award damages in circumstances where the injury entails a loss of function of 15% or less, or where the defendant has funded, or agreed to fund, treatment for the claimant’s injuries.

The focus of the Bill is on factors a court must consider when assessing whether a defendant was negligent, rather than the things it must take into account in determining an award of damages—in other words, as we lawyers put it, liability rather than quantum. I know, as does the Committee, that my noble friend has a long-standing interest in controlling the costs of litigation and avoiding unnecessary claims. I do not share the view of the noble Lord, Lord Beecham, that it is somehow a doubtful advantage to seek to reduce insurance premiums: it is in all our interests. This is certainly one way of doing that. The market, too, will often mean that lower insurance premiums have to be reflected in other insurance companies’ lowered premiums, notwithstanding what he said about insurance companies’ profits.

I am sure, furthermore, that all noble Lords share the desire to encourage appropriate and early settlement of claims. There are of course important issues about the nature and purpose of damages and the place for non-monetary offers of treatment or rehabilitation that may merit further consideration, particularly in relation to minor injuries suffered in road traffic accidents. My noble friend said he was not particularly wedded to 15% but was indicating some form of de minimis provision.

We have dealt, as I told the Committee, with fraudulent and grossly exaggerated claims which have in the past increased insurance premiums. They also eat up the valuable resources of local and public authorities and employers, which could otherwise be used for the benefit of business and providing services to the public. My noble friend supported the provisions in the Criminal Justice and Courts Bill and I fully understand why he sees these amendments as an important piece of the jigsaw in lowering insurance premiums. However, I am sure that he will appreciate that the Government need to consider these issues in much more detail than is possible in the context of this Bill for all their implications to be fully assessed. Therefore, while I well understand what lies behind these amendments, we very respectfully do not think that they should form part of the Bill. I hope that on that basis my noble friend will be persuaded to withdraw his amendment.

Lord Hunt of Wirral: My Lords, I am very grateful to all those who have spoken in this debate. I am only comforted by the fact that the noble Lord, Lord Pannick, had rather made up his mind before he heard my speech, because I referred to a number of issues which—I hope—cause him considerable concern. I commend the speech of the noble Lord, Lord Walton of Detchant, because there is a serious problem here and we cannot ignore it.

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I am grateful to the noble Lord, Lord Beecham, for his kind remarks at the outset of his speech. I readily accept his acknowledgement that there is a problem here. He may or may not recall—but I know that the noble Lord, Lord McKenzie, behind him, will—that the previous Government attempted to introduce a scheme of rehabilitation rather than cash in employers’ liability claims. It was Jane Kennedy, the Minister, who proposed that. Sadly, although I supported it strongly, it did not succeed at the time. The pilot scheme was rejected but I hope that this House will return to the issue of rehabilitation because we have to make sure that people get the treatment they need. I was taught that at the outset, when I had the honour to become solicitor for the Transport and General Workers’ Union. I became one of the legendary Mr Albert Blyghton’s solicitors, and we constantly strived to get employers to introduce a better system of rehabilitation. I am not sure that we have reached that stage yet.

Lord Beecham: I was also one Mr Albert Blyghton’s solicitors.

Lord Kinnock (Lab): Everybody was.

Lord Beecham: That is about right. I am sure that the noble Lord, Lord Hunt, and I, when representing members of that trade union in their claims, would have sought rehabilitation but we would also have sought proper compensation for the injuries that they suffered. The two things are not necessarily in conflict but I would not like to see rehabilitation to the exclusion of proper compensation in the appropriate case.

Lord Hunt of Wirral: In the appropriate case. I hope that the noble Lord will not mind if I look for agreement in his disagreement. However, there is a general view that we cannot go on like this, and I am pleased in particular with the words of my noble friend the Minister. I will go away and ponder carefully the various ideas he put forward on tackling a menace to society. It is harassing a substantial number of people, which is why I want to return to this subject at a later stage but, in the mean time, I beg leave to withdraw the amendment.

Amendment A1 withdrawn.

Amendment A2 not moved.

Clause 1: When this Act applies

Amendment 1

Moved by Lord Beecham

1: Clause 1, page 1, line 4, at end insert—

“( ) Nothing in this Act shall serve to exempt from vicarious liability an employer or other person for any act or omission referred to in sections 1 to 4 of this Act.”

Lord Beecham: My Lords, assuming for the moment and for the purposes of this debate and the scrutiny role of Committee that the Bill makes any significant

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difference to the law, save in respect of Clause 3, to which we will come in due course, the amendment seeks to address an issue that has hitherto gone unremarked, except for the reference I made to it at Second Reading. That issue is whether it is reasonable for an employer or other person to escape liability to pay compensation for damage inflicted by another for whom he has responsibility in the event—the unlikely event—of the Bill availing a defence to the person who has caused the injury. After all, why should the injured person not recover against such an employer or, more realistically, from the employer’s insurers under the doctrine of vicarious liability, which makes an employer liable for the negligence of his employee?

I raised the issue at Second Reading but answer came there none from the government Benches. The amendment would not affect the position of an individual whose actions caused injury or loss but would merely ensure that his employer did not escape liability by the back door. It is entirely consistent with the declared objectives of the Bill, which, in the words of the Explanatory Notes,

“forms part of the Coalition Government’s wider programme to encourage participation in civil society and the Coalition Agreement contained a specific commitment to ‘take a range of measures to encourage volunteering and involvement in social action’”.

The Explanatory Notes and the muted fanfare given by the Government to the Bill make no reference to what appears to amount, by accident or design, to a covert intention to shield not just those volunteers but their employers and public authorities from legitimate claims by the innocent victims of negligence.

This morning I met some people who were much engaged with the problems of military personnel on active service now or who have returned to civilian life. They expressed concern that the Bill and in particular Clause 3, to which we will come, could offer an escape route for the Ministry of Defence from being required to compensate those sustaining injury as a result of a breach in the duty to take reasonable care, or indeed a breach of statutory duty. In their view, which I share, that would be another breach of the military covenant, to stand alongside the Ministry of Defence’s refusal to augment the staffing required to operate the veterans’ compensation scheme, despite the recently disclosed substantial backlog in dealing with claims under that scheme.

I accept that the Minister will not be able to do this today, but I invite him to confirm whether the Ministry of Defence will be entitled by the provisions of this Bill to avoid paying compensation to members of the Armed Forces or to others that hitherto it might be obliged to pay, not under the voluntary scheme, but under the normal rules of personal injury claims. Perhaps the Minister could indicate whether there is any rationale, which I failed to detect, in what appears to be an exclusion of employers’ liability or other vicarious liability as a means ultimately of reducing the number of claims that might otherwise be validly brought. It that is the case—it is not a declared purpose of the Bill although it may well be achieving that—we need to address this and ensure that it does not occur. I beg to move.

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Lord Pannick: My Lords, I hope that the Minister will be able to reassure the Committee that the amendment is unnecessary. Nothing in the Bill exempts an employer or other person from vicarious liability. I doubt that the Bill as drafted would have any effect on vicarious liability. That is because the scope of the Bill is confined by Clause 1 to claims that “a person” has been negligent or in breach of statutory duty. Clause 1 states that the Bill addresses the steps that the person was required to take to meet a standard of care.

Clauses 2 to 4 are concerned with that person acting for the benefit of society, acting responsibly or acting heroically. I understand that to be concerned with the alleged negligence of the primary defendant. I do not understand it to have any application to a person who has not themselves acted for the benefit of society, responsibly or heroically, but is said to be vicariously liable for someone who has so acted. I hope that the Minister can confirm that my understanding is correct.

Lord Faulks: My Lords, in short, I can confirm what the noble Lord, Lord Pannick, said. Amendment 1 would insert a new subsection at the end of Clause 1, stating that nothing in the Act provides an exemption from vicarious liability to an employer or other person. The Government do not believe that this is necessary. As I endeavoured to explain in my recent letter dealing with points raised by the noble Lord and other Members of the House at Second Reading, while the Bill requires the courts to consider certain factors before reaching a decision about liability, it does not tell the court what conclusion it should reach or prevent a person being found negligent if all the circumstances of the case warrant it. It will not therefore give anyone licence to take unnecessary risks with people’s safety or leave the injured party without a remedy when the defendant has failed to meet the applicable standard of care in all the circumstances of the case.

If the actions of an employer, for example, were risky or careless and they led to an injury, it would be open to the courts to conclude that the factors in the Bill did not outweigh other pertinent factors, such as the size and foreseeability of the risk, the adequacy of training and the extent of the injury, and, as a result, to reach a finding of negligence if appropriate. This will equally be the case where a claim is brought against the employer in respect of the allegedly negligent act or omissions of an employee under the law on vicarious liability. It is important to stress that the Bill is not intended to have any bearing on the rules governing the imposition of vicarious liability, which are well established in law. In the light of this, I can reassure the noble Lord that any suggestion that the Bill would leave injured Armed Forces personnel without a remedy in the civil courts, whether under the law on vicarious liability or otherwise, is misleading. There is nothing in the Bill to prevent a claim being brought against an employer by an injured employee, whether in the Armed Forces, the emergency services or more generally.

Of course, the liability of the Ministry of Defence has recently been the subject of a great deal of litigation, not least in the case of Smith v Ministry of Defence. The noble Lord and the Committee may be aware of the difficult arguments about the scope of so-called battlefield immunity and the relevance of the Human

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Rights Act. But all those issues, difficult though they are, are nothing to the point in relation to the conventional rules on vicarious liability. For the reasons that the noble Lord, Lord Pannick, gave in his analysis of the Bill, I can assure the noble Lord—I understand why there is anxiety and I wish to allay that anxiety—that there is no need for anxiety and vicarious liability is not intended to nor will be altered in any way by the provisions of the Bill.

In those circumstances, we respectfully suggest that the provision suggested by the noble Lord is unnecessary, and I hope that I have reassured him sufficiently to feel able to withdraw his amendment.

3.45 pm

Lord Beecham: I am extremely grateful to the noble Lord for his clarification of his position, and he is now on the record. Obviously, it will be read as the correct interpretation of the Bill if the Bill ends up being enacted in one form or another. I therefore beg leave to withdraw the amendment.

Amendment 1 withdrawn.

Clause 1 agreed.

Amendment 2

Moved by Lord Pannick

2: After Clause 1, insert the following new Clause—

“Deterrent effect of potential liability

In section 1 of the Compensation Act 2006 (deterrent effect of potential liability), for the word “may” substitute “must”.”

Lord Pannick: My Lords, Amendment 2 seeks to give the Bill some coherent purpose and effect—not an easy task, as we debated at Second Reading.

Amendment 2 draws attention to an important legislative fact, which, surprisingly, is entirely ignored by the content of the Bill; that is, we already have on the statute book a provision which expressly addresses the very issues with which the Bill is concerned. The legislative provision is Section 1 of the Compensation Act 2006. It is a far more tightly and appropriately worded provision than the Bill, which, as we discussed at Second Reading, reads like an edition of the Valiant comic that I used to buy as a schoolboy.

Section 1 of the 2006 Act does the job. It has the title, “Deterrent effect of potential liability”, and states:

“A court considering a claim in negligence or breach of statutory duty may, in determining whether the defendant should have taken particular steps to meet a standard of care (whether by taking precautions against a risk or otherwise), have regard to whether a requirement to take those steps might … prevent a desirable activity from being undertaken at all, to a particular extent or in a particular way, or … discourage persons from undertaking functions in connection with a desirable activity”.

Amendment 2 recognises that there is a distinction between Section 1 of the 2006 Act and this Bill. The 2006 Act sets out factors that the judge may take into account. This Bill sets out factors that the judge must consider. If the Government are determined to change the law, all that is needed, even on their arguments, is to amend Section 1 of the 2006 Act so that “may” is replaced by “must”. That is what Amendment 2 would secure.

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If Amendment 2 were accepted, we could and should remove Clauses 2 to 4 from the Bill. One of the many puzzling features of the Bill is that it entirely ignores Section 1 of the 2006 Act. It does not repeal Section 1 of the 2006 Act. It does not amend Section 1 of that Act. If, therefore, the Bill were to be enacted in its current form, the law would then state that under Section 1 of the 2006 Act judges “may” take account of the social benefit of the activity, and that under this legislation judges “must” take account of the social benefit of the activity, defined in different language.

According to the Lord Chancellor in the other place, the Bill is designed to send a message to potential volunteers and heroes. If Parliament were, through this Bill, to enact the legislative equivalent of a text message, the only message likely to be received is one of pure confusion. The man or woman thinking of volunteering or thinking of jumping into the lake to save the drowning victim is not—as the Lord Chancellor apparently believes —going to be comforted by their recollection of the contents of Halsbury’s Statutes of England. Once the Bill is enacted, the potential hero will pause while he or she consults leading counsel for advice on the implications of the fact that the statute book now contains both Section 1 of the 2006 Act and this new legislation.

Amendment 2 provides a simple and obvious solution to this problem, which I commend to the Committee. I normally agree with the noble Lord, Lord Beecham, but I cannot share his concern about Parliament in this context telling judges that they must take something into account. I do not share his concern because it will remain a matter for the judges what weight, if any, to give to the social benefit context in the circumstances of the particular case. Amendment 2 provides that the social benefit must be taken into account. It would do so in the very sensible context of the 2006 Act, which has worked very well since it was brought into force. Clauses 2 to 4 can then be removed, as the noble and learned Lord, Lord Lloyd of Berwick, will be proposing.

I hope that the Minister will respond favourably to this amendment, which is designed to be constructive. That is very difficult in the context of the Bill. If he is not able to accept this amendment, will he explain to the Committee whether it is really the Government’s intention to have on the statute book two differently worded sets of provisions that will be addressing precisely the same issue? I beg to move.

Lord Beecham: My Lords, I shall speak to Amendment 2, moved by the noble Lord, Lord Pannick, and to my Amendments 3, 5 and 9, which deal with the issue of judicial discretion in applying to any claim within the province of the Bill the provisions that the Bill sets out.

At Second Reading, the noble and learned Lord, Lord Brown of Eaton-under-Heywood, averred that the change the Bill seeks to make in the provision of the Compensation Act 2006 that the court “may” take into account the factors that the Act spells out, to one which declares it now “must” take such matters into account will, in his words,

“actually make no difference whatever”.—[

Official Report


4/11/14; col. 1559.]

Perhaps that is a suitable epitaph for the whole of the Bill, it might be thought.

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The noble Lord, Lord Pannick, from whose company I must unusually and regretfully depart on this occasion, seeks to replace the Compensation Act’s provision of “may” with this Bill’s “must”, presumably therefore reflecting the view of the noble and learned Lord, Lord Brown. The view that the two are the same, however, is not the Government’s view, as the Minister made clear at Second Reading, when he reminded the House that,

“the difference between ‘may’ and ‘must’ … caused the House to be divided on more than one occasion”.—[

Official Report


4/11/14; col. 1576.]

He also reminded us that there is a difference between the provisions in this Bill and the provisions in the Compensation Act.

To the extent that the obliteration of that difference could represent yet another and in this case, given its source, inadvertent legislative attempt to fetter judicial discretion—one of many such attempts made by this Government, some, alas, successfully—the Committee should resist that proposition. The JCHR in one of its more damning and dismissive, albeit characteristically elegantly phrased, reports published in recent years echoed its concerns about similar provisions in relation to judicial review in the Criminal Justice and Courts Bill. We have seen a succession of measures designed to fetter judicial discretion. I fear that, for all the intentions to the contrary, the noble Lord’s amendment might encourage that process. I therefore hope that, on this occasion, he will not object to my taking a different path, but it will be interesting to hear whether the Minister has changed his view since that expressed at Second Reading.

Lord Brown of Eaton-under-Heywood (CB): My Lords, I shall deal briefly with the suggested distinction between “may” in the 2006 Act and “must” in the present Bill which, as the noble Lord, Lord Beecham, has said, I touched on at Second Reading. The Minister submitted then that this was a significant distinction and he compared it to the critical difference between those same two words, “may” and “must”, on which the Government the previous week had been defeated three times when the House divided on three clauses in Part 4 of the Criminal Justice and Courts Bill, all about judicial review. With respect to the Minister, for whom I have the highest regard, this was an uncharacteristically and thoroughly bad point and an inept comparison, because of course there was all the difference in the world between saying in the original Clause 70 of the Criminal Justice and Courts Bill that the High Court “must” refuse in certain specified circumstances to grant judicial review relief and saying, as on amendment to that Bill Clause 70 now does, that the court “may” refuse to grant relief. It is a completely different position in a Bill like the one now before us where the provision is simply about the court having regard to a particular consideration.

It is notable that when the noble Baroness, Lady Ashton, who promoted the 2006 Bill in Committee, resisted what was then a proposed amendment from “may” to “shall”—which is much the same as “must”—she said:

“The reason why we said “may” rather than “shall” is that when a court looks at a negligence claim it takes into account all

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the circumstances of an individual case; those circumstances, of course, vary dramatically from one case to another, as all those who are members of the legal profession will know far better than I. It would not be appropriate to require the courts to take the factor in Clause 1 into account in all cases, which would be the effect of changing “may” to “shall”. In some cases, it will just not be relevant, so by making that change we would be trying to make the courts do something that in the normal course of their activities we would not expect them to do—which is, to take into account factors that have no relevance at all. So we have said that they may take them into account, but we are not requiring them to, because of the range and variety of cases”.—[

Official Report

, 15/12/05; col. GC200.]

A little later she contrasted a negligence claim against an accountant, where the concept of a “desirable activity” would of course be irrelevant, with an injury suffered at Girl Guides or on a school trip, where a “desirable activity” becomes a highly relevant concept. Frankly, it would have mattered little, even in the cases where it was quite irrelevant, if the courts had in fact been bound to have regard to this irrelevant consideration before then summarily discarding it. So too here: it can make no material difference to the outcome of any case whether the word used is “may” or “must”. That is the central point, as I made plain at Second Reading. There is no real difference between this Bill, the 2006 Act, and indeed the common law as it was already developing without the need for any statutory intervention at all. Accordingly, for my part I am quite indifferent to both of these competing Amendments 2 and 3. Rather, in common with the noble and learned Lord, Lord Lloyd, I object to the Bill as a whole. If the House eventually divides on Report, I shall vote that none of these provisions should stand part.

4 pm

Lord Faulks: My Lords, I am grateful for the debate and the contributions from the noble Lords, Lord Beecham and Lord Pannick, and the noble and learned Lord, Lord Brown. They seem to agree about the Bill, but not about the amendments. The noble Lord, Lord Beecham, is not enthusiastic about the Compensation Act. I think it is fair to say that he said that in fact he thought the previous Labour Government had nodded, as did Homer, when they brought it in. Therefore the words of the noble Baroness, Lady Ashton, relied upon by the noble Lord, Lord Pannick, would have less to commend them in his view. The noble Lord, Lord Pannick, on the other hand, says that the Compensation Act has been working well.

The view of the Government is that the Labour Party was quite right to identify the issue and to endeavour to reflect the problems that were identified by the committee which eventually decided to report. There followed the Compensation Bill, but it failed to go far enough. A number of other steps have followed, the common law has of course developed as I entirely accept, and here we have a Bill that endeavours to deal with what I have frankly said is a very difficult target to hit. I know that noble Lords feel that it is a target that can be hit by the common law without any statutory intervention.

However, the amendments put forward here come into different categories. I accept that there are similarities between Section 1 of the Compensation Act and Clause 2 of this Bill. The 2006 Act provides that the court may,

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when determining whether a defendant has taken reasonable care, consider whether a finding of negligence could prevent a desirable activity from being undertaken or discourage others from undertaking functions in connection with such an activity. It does not require the court to enter into such consideration.

However, Clause 2 of SARAH takes a different and firmer approach than the Compensation Act by requiring the courts to consider in every case whether a person was acting for the benefit of society or any of its members. It focuses more firmly on the actions of the defendant in a particular case than on the effect that a finding of negligence might have on others participating in similar activities. For these reasons we consider that Clause 2 of our Bill will provide greater reassurance than the 2006 Act has done to those in the voluntary sector and elsewhere who are still deterred from getting involved in socially valuable activities by worries about liability. I do not suppose that they will have Halsbury’s Laws of England to hand when making these difficult decisions, but their general approach will be affected by the climate and the context in which we live and the way the law reflects that.

The noble Lord says that if we want to compel the courts to consider the type of factors set out in Clauses 2 to 4 of the current Bill, we could have achieved that simply by requiring the courts to consider the points in Section 1 of the Compensation Act. His Amendment 2 would therefore replace the word “may” in that Act with the word “must”. I am not convinced that changing one word in the Compensation Act would have the same impact as our standalone Bill, which has been deliberately designed to be comprehensible to non-lawyers. Indeed, the National Council for Voluntary Organisations mentioned in oral evidence that if the Bill is passed, it could help to publicise that via its volunteering network. As I have said, Clause 2 has a different and clearer focus than Section 1 of the 2006 Act, and I believe that it better addresses the genuine concerns of volunteers and others.

I turn now to Amendments 3, 5 and 9 tabled by the noble Lords, Lord Beecham and Lord Kennedy of Southwark. They would remove the requirement for the courts to consider the factors in the Bill in any case in which they were determined, whether someone was negligent or in breach of a relevant statutory duty. Instead, it would be purely a matter of discretion as to whether they took account of the factors in the Bill. This would revert to the terminology of the Compensation Act, which, as I have said, provides that the courts “may” consider whether a finding of negligence might prevent a desirable activity from being undertaken or discourage people from undertaking functions in connection with such an activity.

In our view, that could unacceptably weaken the Bill. The main point of the Bill is to provide people who are deterred from getting involved with greater reassurance that the courts will always look at the context of their actions before reaching a conclusion on liability. It is our view that the Compensation Act has not done enough to address people’s worries about liability, as recent polls carried out by the National Council for Voluntary Organisations, St John Ambulance and the British Heart Foundation have demonstrated.

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We are hopeful that the Bill will do more than the Compensation Act did to increase public confidence in the law and increase participation in socially valuable activities. We fear that reverting to the terminology used in the 2006 Act, which as I have indicated the noble Lord, Lord Beecham, has reservations about, would not be helpful in this regard. In many cases it may not make much difference whether the word is “must” or “may”, and all will depend on the particular facts of the case.

I accept the strictures about transposing arguments from one Bill to another made by the noble and learned Lord, Lord Brown. Enthusiasm probably overtook me in making that analogy, having recently suffered several defeats on the part of the Government in that context. My point, however, remains that there is a difference between the words “must” and “may”, but that difference will depend very much on the context. Judges are well used to having to fight their way through the undergrowth of statutory terminology; sometimes they must do something and sometimes they may do it. They will of course be approaching these cases very much on the facts. We think that in this difficult area the Bill does its best to fulfil the social objective that lies behind it and, with great respect, we do not think that it would be improved by any of these amendments. It is in those circumstances that I ask the noble Lord to withdraw the amendment.

Lord Pannick: I am very grateful to the Minister. He said that it is a difficult target to hit, but I suggest that the problem is that you are certainly going to find it difficult to hit a target that does not actually exist. You will find it particularly hard to hit a target if you are not armed with any weapon that is capable of hitting it, even if it did exist.

The Minister’s other point was that the aim here is to produce legislation which is comprehensible to non-lawyers, but it also has to be implemented by the courts. If it is not in a coherent form that sits easily with other legislation, all the Government are going to do is cause confusion which will promote litigation at great expense to non-lawyers. The Minister simply did not address the main concern behind Amendment 2, which is that if the Bill is enacted in its current form, there will be two statutes addressing the same general issue in different language. Before we come back, I ask the Minister and the Bill team to give some thought to whether it is sensible not to address Section 1 of the 2006 Act at all by amending or repealing it in this legislation. For the moment, I beg leave to withdraw the amendment.

Amendment 2 withdrawn.

Clause 2: Social action

Amendment 3 not moved.

Amendment 4

Moved by Lord Hunt of Wirral

4: Clause 2, page 1, line 8, at end insert—

“(2) When assessing whether a voluntary organisation, charitable organisation or volunteer has been negligent or in breach of statutory duty, the court shall have regard to—

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(a) the resources available to the volunteer, voluntary organisation or charitable organisation and the competing demands on those resources;

(b) the level of training and qualification which volunteers should be expected to undertake; and

(c) the provision of similar services by other voluntary organisations and charitable organisations.

(3) When assessing whether a state-funded organisation has been negligent or in breach of statutory duty, the court shall have regard to—

(a) the funding available to the organisation and the competing demands on that funding;

(b) the reasons for the allocation of resource by the organisation; and

(c) the level of provision of services by other similar state-funded organisations taking into account the prevailing conditions and funding constraints.”

Lord Hunt of Wirral: My Lords, I say at the outset that I strongly support the Bill, as long as the Minister is prepared to accept that it must do something to change the law. For many years, scientists have said that even the act of observation can be enough to change the object being observed. That is true with this Bill, just as it was with Section 1 of the Compensation Act 2006 when that was introduced. I am sad that no one has paid tribute to the noble and learned Lord, Lord Scott of Foscote, who has been sitting patiently listening to this debate, because, in the words of the Minister, Section 1 of the Compensation Act 2006 was originally based on his brilliant judgment. I would not expect the noble and learned Lord to comment on that, but we all read his judgment, and I concluded that it was one of the best judgments that I have ever read. I hope he will not mind if I use this opportunity to pay tribute to his tremendous skill as a judge.

Surely the effect of this Bill is as follows. A judge hearing a case needs to say to herself or himself, “My decision was going to be this, but before I make that decision I must take account of the Social Action, Responsibility and Heroism Act. Having done that, my decision is now this”. Of course, the decision may ultimately be exactly the same, but the process by which it is reached will be subtly different. Today is an opportunity to debate whether the changes to the law introduced by this Bill ought to be rather more overt. This amendment, and others in my name, is intended to stimulate that debate.

I hope the noble Lord, Lord Pannick, will forgive me if I say that I have given up. Every time I set up a target, he puts the patch over his good eye and does not see it. He then protests that there is not a target. I will continue to supply targets. All I would ask is that, as with rehabilitation, he should focus on the issue and then work with all noble Lords to try to improve the Bill rather than seek to reject it as useless. Surely the whole purpose of this House—above all, this Chamber—is that we should seek to improve legislation, not to dismiss it as lacking substance. Let us give it some substance. I am sorry, I must not get too emotional about this.

Amendment 4 is quite detailed but its overall effect is simple enough. In terms, it requires a court to have regard to the resources of the voluntary or charitable organisation, or a state-funded organisation. I regard this as an important adjunct to the common law position. Too often we hear of front-line resources

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being diverted to pay for compensation claims instead of paying for services. I shall give one example. Alarm—the Association of Local Authority Risk Managers—reports that councils paid out £32 million for pothole claims in 2012, and in the same period fixed 2.2 million potholes, but that the average English authority was £6.2 million short of the money it needed to complete the repairs properly. That risks generating more claims and taking more money away from councils’ budgets. In these times of significant pressure on state resources, a spiral of compensation claims is surely not the way forward. Likewise, the voluntary and charitable sector has finite resources which should properly be concentrated on its various good causes. If its limited budget has to go to fund claims or pay increased insurance premiums, what on earth is the sense in that?

I believe that this amendment would help both sectors to bring their resources to focus on helping society, not the compensation bandwagon. It is no accident that when I searched for the statistics I used earlier, the search results started with, “Pothole Bike Accident—injured by pothole?”, and, “Entitled to compensation?”. I shall not name the organisations because they do not deserve that publicity, but they were a claimant solicitor firm and a claims farmer respectively. Surely there must be a better way. I beg to move.

4.15 pm

Lord Beecham: My Lords, it is interesting that the noble Lord seeks to give carte blanche to any organisation, whether it be a statutory organisation or a voluntary organisation, to preside over a situation in which injuries can be sustained but no compensation paid because the organisation would have difficulty in funding the claim. There are considerable difficulties with that approach. The first is that it entirely removes any incentive to prevent accidents occurring in the first place. This Bill is supposed to encourage people to volunteer. The effect of the noble Lord’s amendment would be to encourage statutory and other authorities to take no precautions whatever because they can always demonstrate that they need more money. It would be more relevant if the noble Lord addressed his colleagues on the government Benches to ensure, for example, that the health service and local authorities are adequately funded to carry out all their responsibilities, whether dealing with potholes or treating people properly in hospital and avoiding clinical negligence claims and the like.

It strikes me as extraordinary that the noble Lord should be making a proposition which would completely exclude compensation for an innocent injured party who proves injury, bearing in mind that all these cases depend on a claimant proving on the balance of probabilities that he or she has been the victim of negligence leading to the injuries for which he or she seeks compensation. Those are quite extraordinary propositions, and I hope the Committee—and in due course, if the noble Lord brings the matter back on Report, the House—will not countenance them. They would remove from compensation a large number of people who are entirely justified in making a claim.

Let us be quite clear: nobody has any sympathy with claims farmers or anybody attempting to make a fraudulent claim, whether or not they are represented by

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—shall we put it gently?—overambitious solicitors or others in promoting such matters. Many of us regularly report to this House being approached by such organisations on our telephones, computers and Blackberries, let alone through adverts in the press and other media. That is something that is entirely reprehensible. We are at one with the noble Lord in wanting to see those matters regulated. I congratulate the Government on the steps that they are taking in that respect. These proposals go much too far and would have an adverse effect on people with legitimate claims. I hope that, on reflection, the noble Lord will feel able to withdraw them.

Lord Hodgson of Astley Abbotts (Con): My Lords, I rise briefly to support the amendment of my noble friend Lord Hunt of Wirral, which seems a potentially sensible and proportionate addition to the Bill.

In this group, we have a clause stand part debate in the names of the noble and learned Lord, Lord Lloyd of Berwick, and the noble Lord, Lord Pannick. I was wondering if they were going to speak to this because I have an interest in it.

Lord Faulks: I understand that the noble and learned Lord has decoupled that from the amendment.

Lord Hodgson of Astley Abbotts: In that case, I shall wait until the clause stand part debate and speak on that occasion.

Lord Faulks: I understand my noble friend Lord Hodgson’s slight surprise. It was a late, though perfectly legitimate, move. Until recently, a number of us thought that whether the clause should stand part was to be debated with the amendment. As it is, we are debating one amendment, Amendment 4 in the name of my noble friend Lord Hunt of Wirral, which would build on Clause 2 by requiring courts to consider certain factors about the nature of an organisation’s activities when determining whether it had been negligent or in breach of a relevant statutory duty. Where the organisation concerned was a voluntary organisation, the courts would have to consider what resources were available to it; whether there were competing demands on those resources; the level of training that volunteers could be expected to undertake; and how similar organisations would have provided those resources. Where the organisation was state-funded, the court would again have to consider what resources were available to it and whether there were any competing demands on funding. It would also have to consider whether there were specific reasons why funding had been allocated in a certain way and how similar state-funded organisations manage similar activities.

My noble friend was instrumental in tabling amendments to the Compensation Act 2006 during its passage through Parliament and those very much helped to improve the legislation. I am grateful for his constructive suggestions during today’s debate. In this difficult area, it is useful sometimes to think differently from the traditional way in which we have approached claims of this sort. Normally, a judge simply ignores the resources of the defendant as not being relevant.

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The question is whether there has been a breach of whatever duty of care is impugned by the claim. Many people believe it is relevant, as a matter of justice, to think beyond that. However, the Government do not believe that this amendment is appropriate. As I have explained, the Bill will require the court to consider certain factors to do with the context of a person’s actions before reaching a decision on liability. The Bill does not change the general way in which the courts consider claims of negligence or for breach of statutory duty. They will continue to judge a person’s conduct against that of the ordinary and reasonable man. There are a range of factors that the court already considers in determining whether reasonable care has been taken in a particular case. For example, it looks at the nature of the activity in question and the degree of care required; the gravity of the harm which might be suffered if insufficient care were taken; and the cost of mitigating any risk.

We have not attempted to set out these matters in the Bill; nor do we intend to do so. Such an exercise would add unnecessary length and complexity to what is a clear and—even its critics would accept—concise Bill.

Some noble Lords have already expressed reservations that the current Bill fetters the discretion of the courts by requiring them to consider certain factors about the context of the defendant’s actions. As I have already explained, the Bill does not purport to tell courts how much weight to put on each factor, covered by Clauses 2 to 4, or to prevent them finding negligence where the circumstances of the case warrant it. However, the effect of being too prescriptive—for example, about the type of evidence the courts need to look at when determining whether an organisation was negligent—could introduce new burdens, which we think, on balance, would not be desirable. That being the case, while renewing my tribute to my noble friend’s attempt to add constructive suggestions to the Bill and his insight into this particular area, I respectfully ask him to withdraw his amendment.

Lord Hunt of Wirral: My Lords, I am very grateful to my noble friend Lord Hodgson for his support. I say to the noble Lord, Lord Beecham, that I should like to return to this subject again at a later stage. In the mean time, if he could reflect on the case of Wilkinson v City of York Council, he would understand that I am not seeking to achieve what he described. I seek merely to respond to the words of the Court of Appeal in that case. I will not go into too much detail, but he will see what I mean if I quote just one sentence:

“A judge, it seems to me, should be slow to reject the evidence given by a responsible council official that resources did not permit a more frequent inspection than that which was given”.

The conclusion in that case was that, whereas the question of manpower resources was able to be considered in relation to other sections in the Highways Act, the particular section—Section 58—did not make reference to this shortage of resources as a factor to be taken into account. Therefore, the Court of Appeal concluded that Parliament had not wanted it to be a relevant factor. I therefore hope that the noble Lord will see that I am seeking to meet a particular problem in a specific way.

Lord Beecham: I understand the point that the noble Lord is making, and I will certainly look at that case. However, his amendment does not seem to be

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confined to that particular issue; it would apply much more generally, and I invite him perhaps to consider whether it would be better narrowed to the kind of incidents to which he has referred. Having said that, I do not necessarily pledge myself to support him should he come back with something like that. It seems that the way he has put the matter is rather different from how the amendments as presently drafted would be interpreted.

Lord Hunt of Wirral: I am very grateful to the noble Lord, and to the Minister for his comments. I will of course reflect on and consider the points that have been raised. In the mean time, I beg leave to withdraw the amendment.

Amendment 4 withdrawn.

4.30 pm

Debate on whether Clause 2 should stand part of the Bill.

Lord Lloyd of Berwick (CB): My Lords, I oppose Clause 2 standing part of the Bill, and my reason is simple: it adds nothing useful to what is already contained in Section 1 of the Compensation Act 2006. It adds nothing to what was contained in the pre-existing common law, as my noble and learned friend Lord Brown has already demonstrated. What, then, does Section 1 say? It has already been read by my noble friend Lord Pannick but I find it a little wordy, so I will do my best to paraphrase it. It provides that a court may have regard to whether the desirable activity would be prevented or discouraged if defendants were required to take some precaution or undertake some action to avoid liability in claims for negligence.

Clause 2 says:

“The court must have regard to whether the … negligence … occurred when the person was acting for the benefit of society”.

The simple question for the Committee is whether there is any distinction between,

“acting for the benefit of society”,

and a “desirable activity”. If not, the clause and the section provide exactly the same.

Nobody has yet been able to suggest a distinction between those two ways of putting it. If Clause 2 is to stand part of the Bill—putting aside for the moment the must/may distinction—we will have, as my noble friend Lord Pannick stressed, two provisions on the statute book covering exactly the same ground. I suggest that that is not a good idea. It is said that it may not matter and does no harm. However, in this instance it matters a great deal because the drafting of Clause 2 is so defective that, if it is to stand part, it will give rise to what one witness described as “massive unintended consequences”. I will come back to that later.

I want to refer to the evidence of Mr Fraser Whitehead, who gave evidence to the Public Bill Committee on 4 September. Mr Whitehead is chair of the legal affairs and policy board of the Law Society. In his view, Clause 2 is unnecessary because the subject is already covered by Section 1 of the Compensation Act. He said that it adds nothing of value. That evidence was never challenged on behalf of the Government. Mr Vara, the Parliamentary Under-Secretary of State, instead

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of challenging the evidence, attacked Mr Whitehead’s credibility. I think it is best in those circumstances if I quote from


, which I would not normally do, but the Committee may find it helpful.

Mr Whitehead was asked whether he had consulted the many thousands of members of the Law Society and if so, whether by line, survey or in writing. Mr Whitehead replied that he had not consulted widely but he had discussed the Bill with the various chairs of the various relevant sub-committees of the Law Society. I take up what was said in Hansard. Mr Vara said:

“Are these personal views that are shared by a limited number of colleagues in the Law Society—the other chairs that you mentioned—as opposed to the views of the majority of the Law Society, whom you admit that you have not consulted?”.

Mr Whitehead said:

“The position I am putting forward is the Law Society’s position”.

Mr Vara asked,

“am I right in saying that this is your view and the view of one or two other people? You mentioned the chair of one committee or another, but how many people precisely have had an input into the views that you have put forward today? Are they principally your views? If not yours alone, how many other individuals have you spoken to who share your views? Finally, will you kindly tell me the precise number and their names, if possible?”.

Mr Whitehead explained that the:

“Law Society is actually a democratic structure”,

and was interrupted by Mr Vara:

“Forgive me for interrupting … As a former solicitor, I am aware of the structure of the Law Society. Basically, you have not consulted your members. You are relying on the views of a small number of people who sit on a specific committee of the Law Society”.

To that, Mr Whitehead said:

“The people on whom I am relying are a wide cross section of specialists.

Mr Vara: How many, please?

Fraser Whitehead: The total number is approximately 35”.

Mr Vara asked:

“Have 35 people given you their views, either in writing or by speaking to you? 

Fraser Whitehead: No, but we have discussed— 

Mr Vara:  Thank you. I am mindful that time is limited, and I am happy to give way to someone else”.—[Official Report, Commons, Social Action, Responsibility and Heroism Bill Committee, 4/9/14; cols. 9-10.]

I do not know what impression that sort of questioning gives your Lordships. All I can say about it is that, in itself, it would be sufficient reason for the Government to lose this Bill, and they would deserve to do so. But of course there are many other reasons also, to which I shall come in a moment.

Next I come to the Lord Chancellor and the reasons that he gave for bringing this Bill forward in the first place. The key thing is that it lays down,

“a series of principles off the back of which the courts will evolve a jurisprudence”.

He said that there had been a number of examples over recent years in which Parliament has adopted that approach. Unfortunately, he did not give any

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details of those examples, so it is difficult to know exactly what he had in mind. A little later he said that the Bill would,

“consolidate the law, which exists in fragmented places around past legislation”.—[

Official Report

, Commons, 21/7/14; col. 1191.]

Again, he was not specific, but I think that he must have been referring to the Compensation Act—although, oddly enough, he does not actually mention it. I have not myself been able to find any other “fragmented” pieces of legislation dealing with social activity, so I assume that what I have said so far is his view. If so, I can summarise his approach by saying that, in his view, Clause 2 does not change the law—otherwise, he would hardly have described Clause 2 as consolidating the law. He must have been aware that the whole purpose of a consolidation Bill is that it does not change the law. I leave it at that.

I return to the evidence of Mr Fraser Whitehead and the massive unintended consequences to which I referred earlier. For example, he mentioned the use of the word “person” in Clause 2. No doubt the Lord Chancellor had in mind organisations and individuals such as the Scouts but, of course, “person” is not confined to individuals. It goes far wider than that; for example, it would include the banks. Are they entitled to the benefit of the clause? Is that what is intended by the Bill? Suppose that a bank were being sued for negligent misrepresentation, would it be able to argue that it acts,

“for the benefit of society or one of its members”,

whenever it cashes a cheque? Presumably, it would. No doubt “person” could have been amended by substituting “individual”, if that is the real intention. However, it is now much too late for the Government to do that and there is no government amendment to that effect. In any event, Mr Vara was present in the Public Bill Committee when Mr Whitehead described what he then referred to as the “horrific” unintended consequences of Clause 2. Mr Vara never challenged that evidence. All one can therefore conclude is that the Government were content with that evidence and accepted it. It remains unchallenged.

Moreover, “person” is not the only word in Clause 2 that is likely to give rise to trouble. What about the phrase,

“society or any of its members”?

What on earth is that supposed to mean? The drafting of Clause 2 is so woolly that I could not help wondering who did the drafting. That is a question I am not allowed to ask, so I shall: was it perhaps the Lord Chancellor himself? Is the Bill before the Committee something which the Lord Chancellor scribbled down on the back of an envelope, as seems to be the practice nowadays? To a lawyer like me, that is exactly what it looks like.

Lastly, I come to the Minister—the noble Lord, Lord Faulks. He finds himself in an awkward position. Either he accepts the Lord Chancellor’s view that the Bill does not change the law or he accepts the view of the Parliamentary Under-Secretary—Mr Vara—that it indeed does. The Minister’s solution to that problem is, as always, ingenious: he comes down in the middle. He says that Clause 3 does, indeed, change the law because it refers to “a generally responsible approach”.

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He says that those words are new and I am sure that they are. They have never been seen before in any form of legislation with which I am familiar. That is part of what will be dealt with by the noble Lord, Lord Beecham, when we discuss Clause 3. However, it is interesting that the Minister does not say the same about Clause 2. On 4 November, he accepted, at col. 1573 of


, that Clause 2 covers “broadly similar territory” to what we have before us today but added that the approach “is different”. As he did not actually spell out the difference, I pressed him on this. His answer was that the 2006 Act had been “ineffective” and had not achieved what it set out to achieve. However, he did not explain why Clause 2 would be any better or more effective than Section 1 had been. When the noble Lord, Lord Beecham, pressed him again on that distinction, he said:

“I am entirely aware of the question that the noble Lord asked and I am attempting to answer it”.—[Official Report, 4/11/14; col. 1574.]

He then moved on. Of course, there are verbal distinctions between the Compensation Act and Clause 2 of this Bill. One important difference is that the Compensation Act is rather carefully drafted whereas Clause 2 is not, but the substance is the same.

4.45 pm

I hope I have said enough to persuade the Committee that Clause 2 should find no place on our statute book. First, it serves no useful purpose. Secondly, the drafting is so defective that it will be greeted with “derision” by the courts—that is the word of Sir Edward Garnier, former Solicitor-General, from the Government’s own Back Benches. Thirdly, it has been described—in evidence that was never challenged by the Government—as being likely to have “horrific” consequences. So the only remaining purpose for this Bill is to repeat a message sent out eight years ago by Section 1 of the Compensation Act which may or may not ever have been received. That, I submit, is a misuse of legislative process. If the Government wish to send out messages—as no doubt they do—they should use some other means.

Lord Pannick: My Lords, I have added my name to that of the noble and learned Lord, Lord Lloyd of Berwick, in opposing Clause 2 standing part of this Bill, and I agree with everything that he has said. At Second Reading the noble Lord, Lord Beecham, and the noble Baroness, Lady Browning, each quoted Shakespeare in their competing assessments of the value of Clause 2, and indeed of the whole of this Bill. At that stage I was unable to contribute at such a high literary level—I could offer only a quotation from Basil Fawlty.

Since then, I have received a valuable e-mail from Paul Mitchard QC of the Faculty of Law at the Chinese University of Hong Kong. He assures me, and I assure the Committee, that the Official Report on this Bill is being carefully studied in the special administrative region of the People’s Republic of China. Mr Mitchard has drawn my attention to a valuable quotation from the works of Shakespeare which is relevant to whether Clause 2 should stand part of this Bill. On being complimented on making a perceptive comment, Beatrice responds by emphasising the obvious nature of what she had said:

“I have a good eye, uncle; I can see a church by daylight”.

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Most appropriately for our purposes, the quotation comes, of course, from “Much Ado About Nothing”. Given that a few moments ago the Minister praised the concise nature of this Bill, perhaps “little ado about nothing” is more appropriate.

Judges can already see a church by daylight. They already take account of beneficial action—responsibility, heroism—when they decide on potential liability for negligence or breach of statutory duty. Noble Lords discussed the case law relevant to this matter at Second Reading; I will not repeat it. The Lord Chancellor’s defence of Clause 2—as the noble and learned Lord, Lord Lloyd, has said—is not that Clause 2 will change the law. The Government have identified no cases which would have been decided differently had Clause 2 been in force. The point made by the Lord Chancellor—the point made by the Government—in support of Clause 2 is that people do not understand the existing law and therefore we, Parliament, should send a message to people who are worried that conduct beneficial to society may result in legal liability, even though those worries are entirely baseless. I do not know whether the Lord Chancellor is on Facebook or Twitter but they would be far more effective methods of communicating a message—if it is the intention of the Government to do so—than the legislative time being taken up by the Bill.

I hope that it is appropriate to say that I cannot put out of my mind—although I hope to do so by ventilating it in this Committee—an image of the Lord Chancellor and the noble Lord, Lord Faulks, as the parliamentary equivalent of the Bee Gees singing their hit, “I’ve Gotta Get a Message to You”. The problem is that there is really no point sending a message unless there is something of value to communicate and unless one has reason to think that it is going to be received. There is simply no evidence whatever to suggest that those thinking of performing beneficial acts or heroism are deterred by a misunderstanding of the protection that the law already offers them.

The Joint Committee on Human Rights, in its report published last week, helpfully summarised the position in relation to this crucial point. I draw the Committee’s attention to paragraph 2.23. It refers to the Explanatory Notes to the Bill, which,

“say that there is ‘some evidence’ that people are deterred from participating in socially useful activities due to worries about risk … or liability”.

The Explanatory Notes, as the Joint Committee points out, cite only an example of a survey conducted in 2006-07. The committee asked the Government if there were any other evidence upon which the Bill is based in relation to the suggested need for a message to be sent. This was the report’s conclusion at paragraph 2.26, which stated:

“We have considered carefully the strength of the evidence base showing that the specific risk of legal liability, as opposed to risk generally, is a reason why people do not volunteer, and we have found it weak. The evidence relied on by the Government as demonstrating a public perception that volunteering carried too great a risk of legal liability is almost entirely anecdotal, and we do not consider such evidence to be a sound basis for legislating”.

I respectfully agree. If the Government are bringing forward Clause 2 on the basis that there is a need to send a message, they need to present to this House

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some evidence to support that assertion. Anecdotal accounts are simply not good enough. I therefore share the view of the noble and learned Lord, Lord Lloyd of Berwick, that Clause 2 serves no useful purpose; it should not stand part of the Bill.

Lord Hodgson of Astley Abbotts: I have been listening carefully to the two speeches. The noble and learned Lord, Lord Lloyd of Berwick, referred to the interplay between this piece of legislation and the Compensation Act 2006. I had to note that after he said that he thought that the Compensation Act was sending a message, he added that the message may or may not have been received, which is part of the issue that we are tackling today—that the message has not been received. I listened carefully to the remarks of the noble Lord, Lord Pannick, and have read with equal care his article about this piece of legislation in last Thursday’s Times, which was headed “UK negligence law is already fit for heroes” and saying that we do not need this Bill. Its tone can only be described as uncompromising throughout.

Regrettably I was abroad on business during the week beginning 3 November and therefore was unable to participate in the Second Reading debate. The proposal of the noble and learned Lord, Lord Lloyd, and the noble Lord, Lord Pannick, that Clause 2, headed “Social action”, should not stand part of the Bill clearly rips the heart out of a large part of this measure and deserves a response. With respect to the noble Lord, Lord Pannick, I do not think that people’s fears are baseless.

Before I go any further, I need to declare an interest. First, I am not a lawyer. Hearing the interchanges I sometimes feel that I have joined a party to which I have not been properly invited. Secondly and more importantly, in late 2010 I was asked by the Government to chair a task force to look at those factors affecting the growth of the charitable and voluntary sector, especially among smaller charities and voluntary groups.

I was asked to look at three specific questions. What stopped people giving their time to volunteering, for example? What deterred them from giving their money? What stopped smaller charities and voluntary groups from growing in general terms? The task force’s report, entitled Unshackling Good Neighbours, was published in May 2011 and remains available for aficionados on the Cabinet Office website.

Only the first of those three tasks is relevant to our deliberations today. With the greatest respect to the noble Lord and noble and learned Lord, with the experience of that task force and the evidence that we received. I think that they have seen this issue too exclusively, through an over-narrow legal prism. I agree with their view that this problem of volunteer concern will not be solved by change to the law alone. There is no silver bullet and I would not claim that this Bill is one. The problem can be addressed by multiple bullets and this Bill provides one of them.

The noble Lord, Lord Pannick, is aware of the importance that I attach to the rule of law. I have had the pleasure of participating with him in debates on the Motion of the noble and learned Lord, Lord Woolf, about the importance of the rule of law abroad and

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Britain’s reputation. I have also had the pleasure of speaking with the noble Lord on the Justice and Security Bill. To maintain the rule of law, the law must command general respect. It must not become disconnected from the regulars of the saloon bar in the Dog and Duck. I fear that in this area it is becoming so disconnected. Some of the disconnection is direct and some is indirect, in that the law is being considered to support approaches that our fellow citizens think are at best foolish and at worst downright unhelpful.

Let me give an example of what is happening, which was provided to the task force. A young woman, an undergraduate at Oxford University, saw an advertisement in the paper asking for individuals to act as room curators at one of the city’s museums. Like many or perhaps most undergraduates she was short of money and anxious to earn some additional sums. The job required her to sit in the corner of a gallery, watching that visitors going by did not interfere or tamper with the exhibits, or steal them. When she applied for the job she was immediately told that it required her to have a Criminal Records Bureau check. She was not keen on what she found a disproportionately untrusting attitude.

At this point she was put in touch with the task force. I knew that CRB regulations check that a job applicant is suitable for “frequent and intensive” contact with children or vulnerable adults and could not see how this undergraduate sitting in the corner of a room in a museum would call that principle into question. So I asked her to write to the university authorities and ask them for the basis of their CRB requirement. The answer was that the museum authorities had consulted their solicitors and had been told that to cover all the bases, including generally, a failure to have CRB checks would increase the likelihood of the trustees being found liable if there were problems in any of the operations of the museum. In the event, the young woman did not take the job because she refused to have the CRB check and the museum would not amend its policy.

That example could be replicated thousands of times up and down the country. I could—but will not —bore the House with examples: the Punch and Judy show on Hastings pier; the Women’s Institute putting flowers on a Welsh railway station; or a retired doctor seeking to read a few hours a month to Alzheimer’s patients in Northumberland. Each case results in people being reluctant to get involved.

5 pm

Lord Beecham: Can the noble Lord explain the relevance of the cases he has just cited to the Bill—or, to put it the other way round, the relevance of the Bill to the cases he has just cited? The Bill is speaking about claims for negligence.

Lord Hodgson of Astley Abbotts: What I am talking about here is the provision that the court,

“must have regard to … the alleged negligence or breach”.

In the case of the Oxford museum, the solicitors were indicating that failure to have CRB checks could render the museum liable for a negligence claim in the event of there being a problem.

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Lord Pannick: Perhaps I might point out to the noble Lord that the Minister assured the Committee in relation to the first group of amendments that the Bill would have no effect whatever on vicarious liability. Therefore, the museum’s approach—which does not sound very sensible—would not be affected in any way by the Bill.

Lord Hodgson of Astley Abbotts: I am not going to try to argue a fine legal point with the noble Lord but the fact of the matter is that the museum was advised that unless there were full and clear CRB checks for all individuals, it would be liable. This piece of legislation gives us an opportunity because in a case such as this, the museum,

“was acting for the benefit of society or any of its members”.

I have to say to the noble Lord, Lord Beecham, that I was disappointed with his remarks at Second Reading when he said:

“The irony is, of course, that banging on about a compensation culture is itself likely to create the very apprehension that the Bill purports to allay”.—[Official Report, 4/11/14; col. 1552.]

Regrettably, the apprehension is already very widespread. If he wishes to find out what is causing that apprehension, I invite him and other noble Lords to read the briefing sent by the Association of Personal Injury Lawyers, which describes the impact of the Bill as follows. It says that,

“those who ‘employ’ volunteers may be less rigorous in their risk assessments, thereby leaving those in their care more vulnerable to harm. An example is the chairman of a local football club where volunteers coach children. As a result of this Bill, the chairman may be tempted to cut corners in vetting the suitability of his volunteers”.

To suggest that those of us who support the Bill are somehow careless about our children’s future is unfair, unworthy and, indeed, outrageous.

I referred earlier to my support for the rule of law but I have an equally deep affection for the right of free association. It is on this right that our civil society is built. Many argue that in this screen-based age, our society is becoming more atomised and more self-centred. Whether or not this is true, I believe strongly that a vibrant civil society improves social well-being and social cohesion. All possible steps should be taken to avoid people being discouraged from getting involved.

I expect that the noble Lord, Lord Pannick, and the noble and learned Lord, Lord Lloyd of Berwick, will argue that if a case with the characteristics I have described were to come to court, it would be thrown out. That is as may be. I am certainly not going to try to swap legal precedents with them as that would be a battle I would surely lose. But I ask the Committee to consider that for the noble Lord and the noble and learned Lord, a day in court is another day at the office, but for the defendant it is an entirely strange world —working to unfamiliar and not always understandable procedures, often taking quite a long time to come to court and incurring considerable cost and expense. It is a highly stressful experience for the layman or laywoman as well as for their families and work colleagues. Of course, if the defendant is a trustee of a charity which is not a CIO, he or she has unlimited liability.

In the background is the advice we were given at the time of the task force by an experienced litigation solicitor who explained that he would do everything he could to prevent his clerk going to court in what he

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called “volunteer liability” type cases because, as he put it, they are always complex and judgmental. Once you appear before a judge, and even more so before a judge and jury, the potential for unpleasant surprises increases significantly.

Earlier in the Bill, I said this was one of a series of bullets that needed to be fired to tackle this problem. So that the noble Lord, Lord Pannick, and the noble and learned Lord, Lord Lloyd of Berwick, do not think that I am trying to attack the lawyers, I will give two brief examples of other bullets that need to be fired. One is the availability of insurance. The task force found that improving the clarity and comparability of insurance cover would have a major impact on encouraging volunteers. As the task force recommended, the Government have established a working party that includes representatives of the insurance industry and the voluntary sector to tackle this and other insurance problems. For the second bullet, I follow what the noble Lord, Lord Pannick, said earlier, when he wrote in his Times article, “Why not just issue a press release or pay for a newspaper advertisement?”. This raises the issue of myths. My task force was appalled at what we found, and we listed the 20 most extraordinary in our report. They include people worried that they could not put a plaster on a child’s cut; that goggles could not be worn in a swimming lesson; that they could not take photographs of their children at a school play, and that they could not offer meeting space in an office to a local community group. I hope that in parallel with implementing this Bill the Government will take active steps to ensure that where myths occur, they are duly busted.

To conclude, valuable steps have already been taken as regards the law in this respect. The Compensation Act was the subject of our debate this afternoon. The restrictions on contingent-fee legal work and after-the-event insurance are most welcome. We need, however, to continue to explore ways to encourage, or at least not discourage, our fellow citizens to get involved in civil society, and this Bill is important in that regard. I hope that the noble Lord will not divide the House tonight on the proposal that Clause 2 should stand part of the Bill and that my noble friend on the Front Bench will be robust in rejecting the Motion.

Lord Blair of Boughton (CB): My Lords, I find myself very surprised to be supporting the Motion, if that is the right term, of the noble and learned Lord, Lord Lloyd of Berwick, and the noble Lord, Lord Pannick, but I do. I am surprised because, although I am broadly in sympathy with what the noble Lord, Lord Hodgson, has been saying, I think this piece of legislation is, frankly, a lousy way to do it.

Most years I would take part in a little-known ceremony called the Provincial Police Award, which is for the greatest act of heroism by a member of the public. This is what happens when a member of the public sees a red mist and goes for the armed robbers. It is fantastic. The award could actually be called the Unluckiest Robber of the Year Award, which would be a more accurate term. Having said that, we know how difficult it is to legislate in this field. I was involved in a number of the cases concerned with health and safety legislation and the police and the fire service. Those cases were

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extraordinarily difficult. After a number of pretty climactic events, we ended up in long, detailed and creative discussions with the Health and Safety Executive about the right way to deal with issues which affect not only members of the public, but also the individuals who work for these services. Can they climb ladders? Can a sergeant order somebody to climb a ladder? Can they dive into rivers? It needs really detailed work. What this clause does is smooth over all that with a series of words that have very little meaning in relation to the detail.

The noble Lord, Lord Pannick, talked about the Bee Gees. In my view, what the Government are attempting here is more like Don Quixote and Sancho Panza: they are riding along and tilting at windmills.

Lord Hope of Craighead (CB): My Lords, I am troubled by this clause for a reason related to the two speeches that have been just been made. I can express it in a slightly different way.

There was a tragic incident in Scotland a few years ago where a young woman had been walking in the country and fell down a hole, which I think had been created by old mine workings, and she could not get out. The fire brigade was summoned and its officers were prepared to go down the hole and rescue her, which they had to do because I think she was injured and could not use a rope or a ladder. They were perfectly willing to help her, and you might say that that was an act of heroism of the kind that Clause 4 is asking us to think about. But the fireman who really wanted to go was ordered not to do so by his superior officer, no doubt for reasons of health and safety. Unfortunately, the woman died of hypothermia because by the time the appropriate equipment, which the person who was prepared to go down was happy to dispense with, reached the site, it was too late.

The case caused great concern in Scotland. I know that it is a Scottish case which did not occur in this jurisdiction, but it is an example of something that I do not believe this Bill deals with. It is an example of the way in which the Bill has not been properly thought through. I think that there is a real problem for employers who are contemplating health and safety legislation and thinking not so much about themselves as their liability. It may be vicarious liability, which I understand the Minister is not interested in, or it may be a direct liability for something they failed to do to protect an officer who is himself injured or killed. It is a great shame that all these clauses have not faced up to that.

That is due partly to the wording of Clauses 1, 2 and 4, which concentrate on an individual who is described as “a person” and “the person”. It is feature of this Bill that one is asked to think of the same person all the way through; in other words, the person who is said to be negligent or in breach of statutory duty is the same person that you are supposed to be thinking of when you contemplate whether they were acting heroically. In the example I am talking about, the person who was at risk of being sued, or thought that his organisation was at risk of being sued, was not the person who was acting heroically. Therefore, Clause 4 in particular—and, I suspect, Clause 2 as well—misses the real target where the most difficult problem in dealing with these situations arises.

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Funnily enough, if you look carefully at Section 1 of the Compensation Act 2006, you see that it does not create that problem because it does not use such precise language; rather, it is framed in a general way that covers the kind of situation I am talking about. One is not asked to be so precise in looking at the person who is undertaking particular acts or is prepared to do so.

For those reasons, I am deeply troubled by Clauses 2 and 4. I really do not think that they have been framed in a way that meets the full range of cases, in particular cases where employers instruct those who are prepared to do these things not to do them. It is not quite the same as the example in Oxford, but I suspect that it is not far removed. Perhaps the noble Lord, Lord Blair, can think of examples where police forces have suffered exactly the same problems. It is a great shame that the Government have not thought this through, faced up to the real problem, and addressed it in a proper way.

5.15 pm

Lord Faulks: My Lords, the noble and learned Lord, Lord Lloyd of Berwick, and the noble Lord, Lord Pannick, contend that Clause 2, along with Clauses 3 and 4, should be removed from the Bill for a number of reasons, one of which is that it covers the same ground as the Compensation Act 2006. There is a breadth of criticism of this clause, including that it is not well drafted and that there is insufficient evidence to justify the whole Bill, but in particular this clause. The two are, in a sense, not entirely unconnected.

The question is how we deal in legislative terms with a problem that may not be seen as a problem by those who are skilful in the law. The noble Lord, Lord Pannick, will navigate his life secure in his knowledge of the law and the likely outcome of any case. His conduct will be so affected. Others are less knowledgeable about the law and much of their conduct is based on an imperfect understanding of what the legal position is and what it might be in the unhappy event, as my noble friend Lord Hodgson says, of finding themselves in court.

Successive bodies, such as the committee of the Department of Constitutional Affairs, which preceded the Compensation Act, found that there was a perception of a compensation culture, as did my noble friend Lord Young of Graffham, in his report Common Sense, Common Safety. Those outside the law would quite confidently assert that there was a compensation culture. Quite what they meant by that would no doubt vary between individuals, but some of the instances cited by my noble friend Lord Hodgson are instructive. He provided evidence based on what his committee heard. This was not a single assertion. It was not based on one person’s experience. It was an accumulation of evidence.

Those in your Lordships’ House who are not lawyers would, I suggest, recognise the very problem that the Bill seeks to confront. My noble friend Lord Hodgson is absolutely right to say that the Bill is not the answer to that problem. It is just one possible answer to that problem. With respect to the fault in the drafting that the noble and learned Lord, Lord Lloyd, said he found, I just wonder whether someone who is not skilled and

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learned in the law would have much difficulty in understanding what was meant by Clause 2. It conveys that somebody who is potentially to be sued for being in breach of statutory duty or negligence would have their actions, if acting for the benefit of society or any of its members, taken into account. Is that so difficult a concept? I suggest not. It would provide some reassurance.

It is said to be rather unworthy of Parliament that we should be sending a message. The noble Lord, Lord Pannick, who shows the breadth of his allusions to popular culture and Shakespeare, relies on the Bee Gees. Sending a message is not, of course, the primary purpose of legislation but, as I said at Second Reading, we legislate in a particular context. We do not live in a hermetically sealed Chamber where we do not take into account what people on the outside think and say. We should indeed not be out of step with those who drink at the Dog and Duck, who are aware of the possibility of a compensation culture. If the Bill chimes in common-sense terms with what ordinary people feel—that we have gone too far—then the Bill is providing a useful purpose.

Lord Beecham: The Minister is not resiling, is he, from the position that Clauses 2 and 4 do not change the existing law?

Lord Faulks: At the moment we are debating Clause 2. I gather that we are to have the delight of a debate on Clause 4 in due course. The position is that, were the Bill to be enacted, a judge would have to have regard to the matters contained in, among others, Clause 2. It has been said, rightly, that judges would normally be expected to pay attention to the matters in Clause 2 in any event, but I suggest that it is sometimes useful for a judge, perhaps faced with a seriously injured claimant, to bear in mind a specific statutory provision when considering what is often an extremely hard task for a judge—to turn down a badly injured person—because the injury was sustained as a result of the act of someone acting for the benefit of society or any of its members. It should not change the law, but it is sometimes useful to put into statutory form what is often difficult to find in the morass of common-law decisions.

The noble and learned Lord, Lord Lloyd, referred to the evidence that was given in Committee in the House of Commons, commented on what my ministerial colleague had said and asked, and pointed to so-called horrific unintended consequences that were not challenged. I am not entirely clear what the horrific unintended consequences were, and although I understand what he meant by saying that they were not challenged, we should be a little careful in drawing an analogy between not challenging something in court, which is often of great significance, and the rather less structured method in which evidence is adduced in committees. None the less, I take his point that the cross-examination was perhaps less than ideal and not particularly illuminating.

I respectfully suggest that there is evidence to support the clause. A survey of volunteering and charitable giving carried out in 2006 and 2007 by the National Centre for Social Research and the Institute for

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Volunteering Research found that worries about risk and liability were one of the significant reasons cited by 47% of respondents to the survey who volunteered. The National Council for Voluntary Organisations confirmed that these concerns remained a real issue for many voluntary organisations when it gave evidence to the Public Bill Committee following the introduction of the Bill.

In terms of people being deterred from helping others in emergencies, a recent survey, carried out in August 2014 by St John Ambulance, showed that 34% of more than 2,000 adults questioned said that they might be deterred from intervening due to worries about legal repercussions. Evidence also suggests that responsible employers worry about spurious or speculative claims being brought by disgruntled or opportunistic employees. We heard at Second Reading the speech from my noble friend Lord Cotter. Then there is the report by the noble Lord, Lord Young, Common Sense, Common Safety, and the report of the red tape task force under the chairmanship of my noble friend Lord Hodgson, from whom the Committee has heard today. I submit that there is evidence, of a positive sort, of a perception.

We should not underestimate what acceding to the amendment to remove Clause 2 would do: it would emasculate the Bill. At the moment, it is broadly drafted so it would apply in a wide range of situations where people are acting for the benefit of others, whether they are doing so on a voluntary basis or in a paid capacity. For example, it could include organised charitable activities such as running a village fete or informal, individual activities such as helping an elderly neighbour with their shopping. It could also cover workers such as teachers, doctors and members of the emergency services, who are acting for the benefit of society as part of their jobs.

The clause does not tell the court what conclusion it should reach and will not prevent a person engaged in socially beneficial action being found negligent if the circumstances of the case warrant it. It will be for the court to determine whether a person was acting for the benefit of society and, if so, what weight it should give to that factor in all the circumstances of an individual case. I accept what the noble Lord, Lord Blair, said about trying to frame appropriate legislation in the context of health and safety. It is very difficult to cater for the myriad circumstances that arise. However, the idea is that this will give the courts the maximum flexibility to reach fair and just decisions, while sending a strong signal to give reassurance to the public that they will, in all cases, consider the wider context of the defendant’s actions, prior to reaching a conclusion on liability.

I have already addressed the Committee on the difference between the Compensation Act 2006 and this Bill—the use of the word “may” and the requirement that is contained in this Bill. I do not think the Committee would like me to repeat that. There are, of course, similarities, but the Bill requires the court to consider in every case.

Reassurance is important: we want to encourage volunteering. I am glad to say that volunteering is increasing, but it could increase still further. As my

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noble friend Lord Hodgson said, it is a desirable trend and it is tragic if people are deterred by the fear of litigation. I do not apologise for saying that this is a difficult target to hit. The noble Lord, Lord Pannick, may fire bullets at me all afternoon, but we are trying to identify, through this legislation, matters that it is hoped will reassure, by legislating in a way that is in tune with how the public see the current situation. I respectfully submit that the Bill, which may be unusually short and unusually drafted, in the sense that it uses ordinary language—

Lord Elystan-Morgan (CB): My Lords, I am preoccupied by what the Minister said earlier: that the effect of the Bill, essentially, would be to cut through a morass of various decisions in the common law and, thereby, clarify the situation for the assistance of the judge. I think I have paraphrased what he said reasonably well. Could the Minister deal with a technical point? Is there not a presumption in our law that the common law will be changed by statute only where statute makes it clear, beyond peradventure of doubt, that it is changing the common law? In other words, what common law is being changed by this particular clause that was not already dealt with by the 2006 Act? In other words, what specific common law, now extant, is being changed, if at all? If not, can there be any validity to the clause at all?

Lord Faulks: I do not think that one would find any common law decision the ratio of which was precisely what we find in Clause 2. My point was simply that in deciding a particular case of negligence, judges will, on the whole, have regard to overall principle. There may or may not be another case sufficiently on all fours on the facts to be worth drawing to the attention of the judge. This does not overrule any of those cases, but it provides a clear statutory provision to which the judge could be referred in approaching the facts of a case. There may well be some authority on the facts which could also be provided for the assistance of the court which would not conflict with this provision. That is my answer to the noble Lord.

I submit that this clause should remain part of the Bill and that this Bill serves a useful purpose.

5.30 pm

Lord Lloyd of Berwick: My Lords, I am grateful to my noble friend Lord Blair and to my noble and learned friend Lord Hope of Craighead for supporting me. The Minister has not dealt with most of the difficulties which some of us feel. He has not really dealt with the fact that the ground is already adequately covered by the Compensation Act, and he has not dealt with the defective drafting and the unintended consequences which are bound to arise as a result. He said that the target at which he is aiming is very difficult to hit. At this stage, all I can say to him is that he has not hit it. I will certainly return to the matter on Report.

Clause 2 agreed.

Clause 3: Responsibility

Amendment 5 not moved.

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Amendment 6

Moved by Lord Beecham

6: Clause 3, page 1, line 12, leave out “generally”

Lord Beecham: My Lords, Amendment 6 deals with the provisions of Clause 3, which purports to be—and as I understand it, the Government agree to be—the only substantive change in the law that the Bill promotes. That, of course, raises the question of the relevance of the other clauses of this ephemeral legislative concoction, but it is also unacceptable in itself.

Clause 3 requires the court to,

“have regard to whether the person, in carrying out the activity in the course of which the alleged negligence or breach of statutory duty occurred, demonstrated a generally responsible approach towards protecting the safety or other interests of others”.

At Second Reading I asked what was meant by a “generally responsible” approach. The Minister did not vouchsafe a reply. I do not blame him. The Lord Chancellor and the Minister in the Commons were unable to supply a meaningful interpretation: a case of the inscrutable in search of the unintelligible, or perhaps vice versa.

The Government’s obsession with the so-called compensation culture was reflected in the Lord Chancellor’s response to an Oral Question quoted by the Joint Committee on Human Rights at paragraph 2.35 of its report. The Lord Chancellor talked of the need,

“to provide a deterrent to an employee who tries it on in the face of a responsible employer who has done the right thing, when someone in their employment has done something stupid and still tries to sue. As part of our long-term economic plan”—

I note in parenthesis that it is a long-term economic plan which appears to be growing ever more long-term by the day—

“I want to see those responsible employers protected against spurious claims, and that is what the Bill will do”.—[

Official Report

, Commons, 1/7/14; col. 731.]

There are, to put it mildly, several problems with that argument. The first is the sheer paucity of evidence for the existence of the compensation culture, apart perhaps from the road traffic cases of whiplash and the like about which we have heard so much today. The second is the apparent belief that the courts are unable to detect whether or not a claim is spurious, given that a claimant has to prove it. The third is that, despite its apparent belief that the Bill,

“is not designed to reduce standards of health and safety in the workplace”,


“will not protect negligent employers who do not have a responsible approach to health and safety”,

the Joint Committee concluded that:

“To the extent that Clause 3 of the Bill will lead to some health and safety cases against employers being decided differently, we do not consider that the Government has demonstrated the need to change the law to restrict employees’ right of access to court for personal injury in the workplace”.

Can the Minister give an assurance that the Joint Committee’s fears in that respect are misplaced and that the Bill is not intended to and will not affect such health and safety cases? He gave a general assurance this afternoon, for which I am grateful, about claims

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for employers’ liability. The JCHR raised a specific point in relation to health and safety, and perhaps he will deal with that aspect.

The fourth problem is that the Bill is not, in any event, confined to personal injury cases, and still less to cases brought by employees against their employer, which seemed to be the burden of the Lord Chancellor’s principal concern. Clause 3 refers not just to injury but to safety and “other interests”. It must be taken to include economic interests, such as claims concerning damage to property or professional negligence by, say, an accountant, a financial adviser or, heaven help me, a solicitor. This much was made clear by Mr Vara in his heroic attempts to make the case for this generally irresponsible measure. At column 693 of Hansard he proudly announced:

“We have deliberately drafted the clause broadly ... This ensures that it will be relevant in a wide range of situations … The clause is not restricted to personal injury claims and could in principle be applicable in relation to other instances of negligence, such as damage to property or economic loss, where issues of safety may not necessarily be relevant”.—[Official Report, Commons, 20/10/14; col. 693.]

Presumably, issues of heroism would be equally irrelevant. Note that he assumes that negligence exists in such claims but excuses it in the manner of the old saw about the housemaid’s baby: “It’s only a little one”—a “Downton Abbey” analogy, I suppose. It is a rather curious way to approach legislation.

Perhaps the Minister will tell us the difference between being responsible and being generally responsible, and why the clause extends to a wide variety of claims which have nothing whatever to do with social action, volunteering or heroism. Perhaps he will also comment on the paucity of any evidence provided to the Joint Committee by the Government in answer to its request for examples of what the Lord Chancellor described as,

“a jobsworth culture or a legalistic culture that seems to stop common sense in its tracks”.

It asked for such information but received none. Where, one might ask, is the evidence of a common-sense approach, let alone one grounded in an understanding of the law and the courts that one has the right to expect a Lord Chancellor to display?

The twofold approach that I adopt in moving the amendment and speaking to the clause stand part debate is, first, to endeavour to effect a modest improvement in Clause 3 by removing the word “generally” so that that fairly vague and opaque term disappears; and, secondly, to address the general position in relation to the clause stand part debate—that this is the only substantive change in the Bill, and it is not acceptable. If the Government continue to press for this it will certainly be a matter to which I will return on Report. I hope the Government will concede that it is ill designed and likely to produce effects that are not consistent with the overall theme, however repetitive it might be, of the Compensation Act 2006, and therefore that it contributes nothing but potential difficulty for the future. I beg to move.

Lord Hunt of Wirral: My Lords, in drawing attention to Amendment 7, I am returning to the points I referred to earlier. The first part of the amendment reminds the Committee how society as a whole has

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become a victim of insurance fraud where organised criminals are now manufacturing situations in which innocent motorists are caused to collide with their vehicles in a manner which indicates negligence on the part of the innocent motorist. That is why I wanted to bring this amendment again to the attention of the House.

The second part of the amendment intends once again to remind your Lordships of the importance of non-monetary offers and, where they have been made by defendants, how they should be considered when the courts come to decide whether to award damages and the extent of the damages payable. I know that rehabilitation treatment is often offered to those injured in accidents but in many cases, because of the action of an intermediary, that treatment is often refused by the injured party and the period of suffering prolonged in an attempt to increase the award of damages in which that intermediary may be interested. If the courts were to be permitted to order that the treatment provided by a defendant and his representatives is a fair reward in compensation for the injury suffered, then the motivation of fraudsters to pursue “crash for cash” accidents should be reduced.

Lord Pannick: Before the noble Lord sits down, could I ask him whether the first part of Amendment 7 would not be covered by the existing law of causation and, indeed, by the law on contributory negligence?

Lord Hunt of Wirral: It is partly covered, but I think this makes it much clearer.

Earl Attlee (Con): My Lords, it is well known that I generally support this Bill but I have to confess that I do not have the foggiest clue what Clause 3 is for. It would be much better to have a social action and heroism Bill. If the noble Lord wishes to return to it at a later stage, he will have to amend Clause 5 and the Long Title. A clearer, simpler Bill would send a clearer, simpler message.

Lord Faulks: My noble friend Lord Attlee would like to make a short Bill shorter. I submit that this particular clause seeks, as does the Bill as a whole, to reassure ordinary, hard-working people that, when something goes wrong and they are sued, the courts will take into account that they have adopted, during the course of an activity,

“a generally responsible approach towards protecting the safety or other interests of others”.

Most people would understand that expression.