PART 3 - RECOVERY OF NHS CHARGES
193. The arrangements for recovering NHS costs
set out in this Part are closely modelled on those contained in
the Road Traffic (NHS Charges) Act 1999 ("the 1999 Act").
The intention is to extend the 1999 Act scheme to cover most cases
where personal injury compensation has been paid, rather than
only those relating to road traffic accidents. Consequently, many
of the delegated powers in this Part follow the division in the
1999 Act between primary and secondary legislation. Whilst there
may, on the face of it, seem to be a substantial number of delegated
powers in this part, these are generally concerned either with
the detailed and technical administration of the scheme or with
arrangements for review and appeal. They are likely to lead, as
with the 1999 Act, to two sets of regulations for England and
the equivalent for Scotland.
194. All regulations made under the delegated
powers in this Part of the Bill will be subject to the negative
resolution procedure. This is on the basis that they are concerned
with detailed administrative and technical issues relating to
the costs recovery scheme. Five of the powers
allow for modification of the primary legislation. However, as
is clear from the paragraphs below, these do not, in the view
of the Department, involve matters of principle which might be
more appropriate for the affirmative procedure. Rather, they are
necessary either to take account of changes of circumstances -
for example, variation of the schemes referred to in Schedule
10 (clause 146) or abolition of bodies responsible for hospitals
(clause 158) - or to provide for the detailed application of the
scheme in particular technical situations - for example apportionment
(clause 149), structured settlements or payments into court (clause
Clause 146 and Schedule 10: Liability to pay NHS
195. Clause 146 sets out the circumstances in
which NHS costs can be recovered. Subsections (1) and (2) provide
that any person who makes a compensation payment as a result of
an injury will also be liable to pay NHS charges in respect of
treatment for the injury received by the injured person at an
health service hospital and/or in respect of the provision of
NHS ambulance services.
196. Subsection (3) defines compensation payment.
The definition is a broad one which covers payments made by the
person liable for the injury or by his representative such as
an insurance company or the Financial Services Compensation Scheme.
Subsection (3) also introduces Schedule 10, which lists a number
of payments which are not to be counted as compensation payments.
These include compensation orders made by the criminal courts,
payments under the Fatal Accidents Acts 1976 or its Scottish equivalent
and payments made by trusts prescribed in regulations. The intention
is that this latter might include trusts such as those that are
set up to compensate haemophiliacs infected with HIV from blood
197. Subsection (9) creates a delegated power
to amend Schedule 10 by omitting or modifying any payment listed
in it. Paragraphs 3 and 8 of Schedule 10 give powers to prescribe
by regulations exempted trusts and other payments respectively
which are not to count as compensation payments.
198. It is envisaged that these powers might
be needed to prescribe, for example, new schemes which might from
time to time be established. The power in paragraph 3 of Schedule
10 is tied to a class of case which is stated in the primary legislation
and which may be subject to more frequent change than can reasonably
be dealt with in primary legislation. Similarly the power to modify
or omit items in Schedule 10 is intended to permit flexibility
in responding to changing circumstances. In all cases the aim
of using delegated powers is to avoid the rigidity of approach
that would be caused by relying on primary legislation.
Clause 147: Applications for certificates of NHS
199. Clause 147 deals with applications for certificates,
setting out the circumstances in which a person may apply for
a certificate, and those in which he must do so. It also sets
out the obligations of the Secretary of State and the Scottish
Ministers to issue certificates once an application has been made.
The provisions in this clause closely mirror those in section
2 of the 1999 Act. Subsections (7) and (8) require a compensator
to apply for a certificate if, at the time of making a compensation
payment, he has not already been issued with a certificate or
a previously issued certificate has expired. These obligations
do not arise if the compensator has applied for a certificate
within a period before making payment prescribed in regulations
under subsection (8)(b). Subsection (9) creates a power to prescribe
by regulations the manner and timing of applications for certificates.
200. These arrangements are purely administrative
matters, and it seems more appropriate that they should be dealt
with in secondary legislation rather than appearing on the face
of the Bill. This again reflects the approach taken in the 1999
Clause 148: Section 147: Supplementary
201. This clause contains no delegated powers.
Clause 149: Information contained in certificates
202. Clause 149 deals with the information to
be included in certificates. Subsections (1) and (2) provide that
the certificate must state the amount or amounts, determined in
accordance with regulations, that the compensator must pay in
NHS charges. Subsection (3) provides for a finding of contributory
negligence made by a court or recorded in an agreed judgement
to be taken into account when calculating the amount of NHS charges
due, whether the finding or recorded judgement was made under
UK law or under the law of another country which seems to the
Secretary of State or the Scottish Ministers to correspond to
the appropriate UK law. Subsection (5) sets out particular matters
which may be covered by regulations. These include a cap on the
overall amount payable (subsection (5)(a)); different amounts
for different circumstances - for example out-patient or in-patient
treatment and/or ambulance services - and for different areas
(subsection (5)(b)); provision for cases where a person receives
treatment at more than one hospital (subsection (5)(c)); and provision
for apportionment of liability for NHS costs in cases where there
is more than one person paying compensation to the same injured
person (subsection (5)(e)). All these circumstances reflect existing
arrangements in the 1999 Act. In relation to subsection (5)(e),
however, it will also be possible for regulations to modify the
primary legislation. This is to allow for the possibility that
a formal apportionment scheme, which does not currently exist,
may be established at some point in the future. If this were the
case, the legislation (which currently operates on the basis of
joint and several liability) would need to be modified to make
clear the basis of each compensator's liability under the costs
203. Under subsection (5)(f) regulations can
deal with cases where a fresh certificate is issued or a certificate
revoked as a result of a review or appeal. Subsection (5)(g) allows
regulations to deal with the situation where a person has received
treatment and/or ambulance services in both England/Wales and
in Scotland, by allowing liability under the English scheme to
be reduced in recognition of liability in respect of the same
injury arising under the Scottish scheme and vice versa. Thus
a compensator will not be penalised just because a person's treatment
has taken place in two separate parts of Great Britain.
204. Subsection (9) provides for regulations
to specify the information that a compensator can, on receipt
of a certificate of charges, request from the authority as to
how it has arrived at the amount specified. Again, this mirrors
exactly provisions in Section 3(6) of the 1999 Act.
205. All these provisions are concerned with
administrative matters relating to the operation of the scheme
that may well need to be modified from time to time. Thus it seems
more appropriate for them to be dealt with by regulations rather
than appearing on the face of the Bill.
Clause 150: Payment of NHS charges
206. This clause contains no delegated powers.
Clause 151: Recovery of NHS charges
207. This clause contains no delegated powers.
Clause 152: Review of certificates
208. Clause 152 provides for internal review
of certificates. Subsection (1) requires the authority to review
a certificate if, after it had been issued, there is a finding
of contributory negligence made by a court or recorded in an agreed
judgement, as outlined in paragraph 201 above. Subsection (1)
also gives a power to prescribe in regulations the manner in which
persons must notify the Secretary of State or Scottish Ministers
of any such judgement or order.
209. Subsection (3) gives powers to prescribe
in regulations the periods and circumstances of reviews. This
provision mirrors that in section 6(1) of the 1999 Act.
210. All these powers relate to the detailed
administration of the scheme and are, in the Department's view,
therefore best suited to secondary legislation.
Clause 153: Appeal against a certificate or a waiver
211. Clauses 153 to 155 provide for appeals against
certificates of charges to an independent body. Clause 153 sets
out the circumstances in which an appeal may be made, including
that no appeal may be made until the claim to which the compensation
payment relates has finally been disposed of and the amounts set
out in the certificate have been paid. Subsection (4) enables
compensators to make an application for the requirement to pay
the charges before making an appeal to be waived. Subsection (5)
provides that the Secretary of State or the Scottish Ministers
can only grant such a waiver if it appears that payment of the
charges would cause exceptional financial hardship. Subsection
(6) allows compensators to appeal against a decision not to grant
a waiver through the same procedure as for appeals against a certificate.
Subsection (7) provides for regulations to be made as to the timing,
manner and procedure for appeals and for enabling appeals against
a certificate to be treated as a review. With the exception of
the waiver provisions, these provisions reflect almost in their
entirety the provisions contained in section 7 of the 1999 Act,
and the regulation-making powers in subsection (7) relate to matters
of scheme administration that it would seem inappropriate to include
on the face of the Bill.
Clause 154: Appeal Tribunals
212. Clause 154 contains no delegated powers
per se, but does allow for regulations under clause 153 to provide
for the non-disclosure of medical advice or medical evidence given
or submitted following referral of a case to an appeal tribunal.
This might be appropriate, for example, in cases where it was
thought that disclosure of such evidence to the injured person
or their representative might be harmful to the person's health.
This reflects section 8(5) of the 1999 Act.
Clause 155: Appeal to Social Security Commissioner
213. This clause contains no delegated powers.
Clause 156: Provision of information
214. The system for recovery of NHS charges is
reliant upon information being exchanged by the various parties
involved in the chain of events from accident to payment of compensation.
Clause 156 sets out the persons who are required to provide information,
and allows for the making of regulations to prescribe the type
of information required (which may include information about NHS
treatment received), and the timing and manner of providing it.
As with most of the other delegated powers in this Part of the
Bill, this reflects powers already in place in section 11 of the
1999 Act. Again, these are largely administrative matters over
which some flexibility is needed to take account of changing circumstances
and which therefore seem better suited to secondary legislation.
Clause 157: Use of information held by the Secretary
of State or the Scottish Ministers, etc
215. This clause contains no delegated powers.
Clause 158: Payment of NHS charges to hospitals or
216. Clause 158 places an obligation on the Secretary
of State and the Scottish Ministers to pay any monies recovered
to the appropriate NHS bodies, unless they have been identified
as overpayments. Subsection (3) allows for regulations to provide
for the manner and timing of onward payments, and for dealing
with situations where the hospital or ambulance trust in question
has ceased to exist, including modifying the primary legislation.
Such modification is necessary to allow payments to be made to
a different body from the one envisaged by subsection (1). These
powers mirror (with the addition of ambulance trusts into the
wording) those in section 13(4) of the 1999 Act. These are, again,
administrative matters which seem to the Department best left
to secondary legislation.
Clause 159: Regulations governing lump sums, periodical
217. Clause 159 allows for regulations to be
made as to the application of the scheme to particular types of
payments which may be made in personal injury cases, including
provision modifying the primary legislation. These are multiple
payments, structured settlements and interim payments. In the
case of structured settlements, it is envisaged that regulations
might allow for the settlement agreement to count as a single
payment of compensation and for no further liability in respect
of NHS costs to arise when payments are made in accordance with
the agreement. This would require modification in such cases of
the definition of "compensation payment" in clause 146(3).
In the case of interim payments of damages which are ordered to
be repaid by a court, it is envisaged that regulations might provide
for repayment to the compensator of any payment of NHS costs made
as a result of the interim payment.
218. Subsection (3) enables regulations to be
made to deal with the particular situation of payments into court
and the circumstances in which such payments - which are made
to the court rather than to the injured person - are to count
as compensation payments. It permits regulations to modify the
legislation as it applies in such cases - for example by amending
the period within which a compensator must apply for a certificate
of charges under clause 148, or what counts as the settlement
date in these cases under clause 150.
219. Again, the delegated powers in this clause
largely reflect powers contained in section 14 of the 1999 Act.
The matters concerned are highly detailed and technical in nature
and, in the view of the Department, therefore more appropriate
for secondary legislation.
Clause 160: Liability of insurers
220. Clause 160 provides that where an insurance
policy covers, to any extent, a compensation payment made by an
insured person in consequence of an injury, that policy will also
cover any NHS costs for which the insured person is liable in
respect of that injury and that this cover cannot be restricted
or excluded. It is intended to ensure that insurers meet liabilities
under the scheme and do not just leave them to be picked up by
policyholders. Subsection (4) enables regulations to be made limiting
an insurer's liability in circumstances set out in the regulations.
It is envisaged that this might be appropriate, for example, to
enable a reduction in the NHS costs payable in cases where an
insurer has only covered a proportion of the total compensation
due as a result of a cap on the amount payable under the insurance
policy. This power was not necessary under the 1999 Act which
was concerned only with cases covered by compulsory motor insurance
or its equivalent. It reflects the fact that all kinds of personal
injury will now be included in the scheme regardless of the insurance
position, and that they may be covered by different types of insurance
rather than only those specified in section 1(3)(a) of the 1999
Act. This is a technical insurance issue which may be subject
to change in the light of changing practice within the insurance
industry and is therefore thought more appropriate for secondary
Clause 161: Power to apply part 3 to treatment at
non-health service hospitals
221. Clause 161 enables regulations to be made
extending the scheme for recovery of NHS costs to cases in which
treatment has been provided at a non-health service hospital under
an arrangement with one of the NHS bodies listed in subsection
(3)(b) and in which an injured person has been provided with ambulance
services to take him to such a hospital for treatment. This would
cover, for example, treatment at private or voluntary hospitals
paid for by the NHS. The regulations would cover such issues as
the bodies who would receive any payments recovered under the
extended scheme. Subsection (2) excludes from any such extension
treatment which, had it taken place at an NHS hospital, would
have been private treatment or treatment under arrangements for
primary dental services or general or personal medical or dental
services. This mirrors the exclusions from the main scheme set
out in clause 146(5).
222. Nowadays, the NHS is actively encouraged
to work in partnership with other health care providers to provide
quick effective treatment for its patients. It is increasingly
common for NHS trusts to enter into arrangements with non-NHS
providers for the provision of treatment and services to patients
who remain, at all times, NHS patients funded by NHS money. The
provisions of this clause recognise the reality of this situation,
and allow the scheme to keep up with the different ways in which
NHS treatment might increasingly be delivered in future. The extension
of the scheme to non-NHS hospitals is likely to raise different
administrative issues as well as to which body - the private hospital
or the NHS commissioner - should receive the money received under
the scheme. Given the need for further discussion and the comparatively
low level of current use of non-NHS hospitals for treatment of
injuries, the Department is not ready to extend the scheme beyond
NHS hospitals at this stage. Since such an extension will involve
largely technical and administrative matters rather than issues
of principle, it was however thought appropriate to provide for
it in later secondary legislation.
Clause 162: The Crown
223. This clause contains no delegated powers.
Clause 163: Regulations
224. This clause contains no delegated powers,
but does set out by whom such powers in this Part are to be exercisable.
Clause 164: Interpretation of Part 3
Clause 165: Consequential and minor repeals
225. These clauses contain no delegated powers.
3 Clauses 141(9), 144(5), 153(3), 154(1) and 154(3). Back
The Financial Services Compensation Scheme is a scheme set up
under the Financial Services and Markets Act 2000 to provide compensation
when the insurance company cannot, for example because the business
has failed. Back