HC Deb 11 February 1965 vol 706 cc682-92
Mr. Patrick Jenkin

I beg to move Amendment No. 49, in page 17, line 10, at the end to insert: damage to any property of any persons includes loss of property of that person and any loss of profits or other earnings suffered by that person". Reference has been made to the long discussions that took place in Standing Committee on the words which have occupied the attention of the House to some extent this evening resulting in the substitution of "injury" for "hurt". Reference has also been made to the fact that "hurt" was an unusual word, but in the 30 columns of debate on this point in Standing Committee that was of secondary importance and the main issue between the Opposition and the Government was whether the words as they then appeared, hurt to any person or damage to any property", were apt to catch monetary loss, loss of profits, consequential loss, pecuniary loss or whatever one likes to call it. Clearly, such a loss cannot be included in the word "injury", nor could it be included in the phrase damage to any property of any person", which still appears in the Bill.

The Minister without Portfolio will remember that after some argument we arrived at a point at which we thought we were in agreement. On 8th December, the Minister stated: An individual might be able to claim. A company might or might not be able to claim. All that I am saying is that it is the Government's attention to place a corporate plaintiff in an action under the Bill in the same position as he would be in an action for negligence at common law in which liability were either admitted or proved. That is as far as any Government should go. The Amendment goes further."—[OFFICIAL REPORT, Standing Committee A, 8th December, 1964, c. 35.] That was a different Amendment to the present one. What is painfully obvious is that the Government have not gone even as far as that. There is no Amendment in the Government's name to implement the intention, which the Minister then expressed, to place a corporate plaintiff in exactly the same position as he would be in an action for negligence if liability were proved or admitted. It is clear that in the case of an individual the measure of damages for any inury would include loss of earnings, including loss of professional earnings—indeed, anything that might come under the heading of consequential loss of pecuniary damage for an individual.

I return to the point, which I dealt with at length in Committee, concerning the corporate plaintiff. I gave an example of circumstances in which a factory operated by a company was put out of action by a nuclear incident and loss was suffered which could not be described as damage to property but was purely monetary loss, with claims made upon the company for breach of contract and the like which nevertheless were attributable to the nuclear incident. I submit that that sort of loss is certainly intended to be covered by the Bill and to be comprised within the absolute liability imposed upon licensees under the Bill, and yet it does not come within the words of the Bill.

A suggestion was made, but was, I think, abandoned, that companies could somehow afford to stand that sort of loss. That is not a valid point. As an hon. Member on the Government side remarked the other day, there is no means test for justice. There could, however, be a direct effect upon the individuals working for the claimant company. They might well lose their jobs and their security of employment and, if there were not sufficient funds in the company to pay a decent redundancy payment, they might suffer considerable hardship. If a company goes bankrupt with substantial claim for loss for breach of contract, there is money available to pay the employees, but if a company is put out of business by a nuclear incident and cannot claim for this pecuniary loss, this monetary loss, it may end up with no assets with which to satisfy the legitimate claims of its employees who are in no way to blame for the trouble in which they find themselves.

This is not the only point. It is not just the direct claim of the company. It is also that the legislation provides the framework against which those at present carrying on business are covering their own risks. Clause 4(1,b) effectively precludes anyone else being liable in cases where liability is covered by the Bill. But if liability is not covered by the Bill because the words of the Bill are not wide enough to comprise the sort of damage which the claimant has suffered, other people can be liable, and others have to find out whether they have to ensure against this other liability.

I gave as an example the people who supply complicated components to the Atomic Energy Authority, to the Generating Board, and so on. I pointed out that the cost of insurance in these circumstances would be very high. Perhaps I might read an extract from a memorandum prepared by a well-known firm of insurance brokers and sent to its clients who engage in this sort of trade, that is, selling components to the people who build nuclear power stations. The previous paragraph says that these risks are insurable, but only through the British Insurance (Atomic Energy) Committee. Under the heading of "Cost of Insurance", it says: In view of the fact that there is only one source for obtaining cover there is no question of competitive terms and from our experience with other cases we know that the cost is extremely high. The premium does, of course, depend to a certain extent on the particular products being supplied and the limit of indemnity required, but we feel that it is futile to consider insuring for such amounts as, say, £250,000, in view of the potential size of claims following a major catastrophe. The point here is plain, that the Bill recognises the possibility of enormous claims in the unhappy event of an incident and makes provision for it, but it has left a gap which can be covered by insurance only at inordinate cost, and the sort of amounts which people would have to insure are the sort of amounts mentioned in the Bill, namely, £5 million, £10 million, and so on.

I strongly urge on the Government the need to accept the Amendment. I take the point that the original Amendment which we discussed in Committee, using the word "loss" quite generally, may have been too wide, although they were the words based on the provisions of the Vienna Convention in Article I (1, k, ii), any other loss or damage so arising or resulting". I understand that this is a point of continental law which refers to moral damage, for which no licensee in this country could ever be liable. I have therefore tried to devise a form of words which confines the damage which the claimant could claim under this head to loss of profits or other earnings suffered by that person, and I submit that these words are apt and not too wide to bring in exactly that form of loss which it seems to me the Bill and the original 1959 Act were intended to cover.

I urge on the Government that this is a serious point of substance which has caused difficulty in the past to people engaged in the trade, and which has caused insurance problems of some magnitude and complexity. If the Amendment were accepted, it would make the position of people engaged in this business, with all its export potential and all the rest of it, very much simpler than it is at present.

10.15 p.m.

Sir Eric Fletcher

The hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) repeated many of the arguments that he put forward in Committee, when he produced a whole series of alternative Amendments to the Clause. Although the precise form of his Amendment now is somewhat different from those which we were discussing in Committee, it raises precisely the same point. I have given the matter a great deal of consideration since then and I am still completely satisfied that it would be a mistake to advise the House to accept the Amendment.

The hon. Member has repeated his proposition that the 1959 Act intended to cover the kind of consequential losses to which he has referred, but there is no substance for that proposition; indeed, in Committee he quoted what was said by the right hon. Member for Barnet (Mr. Maudling), who was in charge of the 1959 Measure, on behalf of the then Government. I have looked at that passage again and I do not think that the hon. Member can draw the consequences that he had in mind from what his right hon. Friend said then. Moreover, the words in the 1959 Act are "hurt or damage", and we have improved the position in the Bill by the Amendments which we have just been discussing.

In Committee the hon. Member said—and from what he has said just now he seems to adhere to it—that he was satisfied that a personal victim would be covered sufficiently by the Amendments which have been put down to meet the case. His chief concern was with a corporate claimant, and he instanced the case of a large company which might have its factory damaged and lose its business and profits, and perhaps have claims made against it for breach of contract.

That may be the case, but it is not only companies which carry on business; individuals also carry on business. An individual may have a factory and may, as a result of a nuclear incident, have claims brought against him for breach of contract. In that respect there is no difference between an individual and a corporation.

I repeat that we are dealing with a rather uncharted field. We are making operators absolutely liable, regardless of negligence, contributory negligence or anything else, and the issue here is the extent of that liability. What is the remoteness of the damage? This is a matter on which there have been many judicial decisions—sometimes conflicting—in recent years. Is someone who is liable as a result of negligence liable for damage which he could not possibly have foreseen, as in the Polemis case, or liable only for what a prudent man might reasonably have foreseen? That is what the common law says about it, and where the issue arises out of a claim for negligence the courts have to decide questions of remoteness of damage in each case on its merits.

Parliament has never attempted to legislate in that sphere. In this sphere, because of its novelty and unpredictability, Parliament has to legislate, but it cannot legislate on precise details. That is not its function. There must always be particular cases relating to particular circumstances in which it is the proper function of the judiciary to arrive at a conclusion. One cannot foresee in what circumstances loss will ensue as a result of a nuclear incident. Having given the matter the best consideration I can, I am bound to say that in the language we now adopt we are doing two things. We are acting in concert with the provisions of the Convention and, since we are here implementing an international Convention, that is of paramount importance. We are honouring our obligations under the treaties and providing, I think, the best possible form of words to cover the kind of circumstances for which it is intended to provide complete cover for those victims, whether persons or corporate bodies, who suffer as a result of nuclear incidents. Therefore, I hope that the House will agree that to accept this Amendment would be going too far and entering into a sphere in which it would not be right to encourage entry.

Mr. Fletcher-Cooke

One thing about which I agree with the Minister and regret to find myself disagreeing with my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) is that this problem, as the Bill will be drafted when we have finished with it, applies equally to natural persons as to corporations. That is not much comfort because all it means is that the element of damage which my hon. Friend seeks to include is excluded both from natural persons, if they be traders or manufacturers, and corporations.

Taking the Amendments we passed tonight, the damage for which an injured person, be he natural or corporate, can recover is injury to any person or damage to any property, and injury will mean personal injury and includes loss of life. By no stretch of judicial interpretation can loss of profits, however foreseeable, be included under personal injury or loss of life. Therefore, we have to consider whether loss of profits, which is a perfectly normal and fair damage in tort, can be included under damage to common property.

Sir Eric Fletcher

Loss of earning capacity is a possible head of damage for individuals and embraces loss of property.

Mr. Fletcher-Cooke

Loss of earning capacity, the Minister thinks, may be included under personal injury. I should like to know whether that is his view as the legal adviser, for the time being, to the Government. If that is his view, it goes a long way, and would, I think probably bring in the rules under the Leibosch and Waggon Mound and other cases. It does not strike me as very apt. Injury means personal injury. That is a new definition of personal injury, in the case particularly of a company, and does not seem at all apt to cover the loss sustained by a corporation whose profits are reduced. The word "personal" would limit the injury, I should have thought, to injuries to persons. If the Minister says that personal injury does include loss of profits, both to individuals who trade or a corporation, that is, I think, an end to the matter. I think we must know whether that is the advice tendered to Her Majesty's Government on the interpretation of this Clause, because I think it is strange.

If it does not, of course, it is considerably reducing the sort of damages which could be recovered under the ordinary rules of tort. It is true that exceptional loss of profits, loss which could not be foreseen by anybody because, as in the case of the Edison, the company owning the boat in question was so poor that it could not have it repaired in the normal way, a totally exceptional loss of profit was suffered because the com- pany was almost bankrupt and could not do what needed to be done. That was unforeseeable. If there is nothing exceptional in the victim, if he is an ordinary producer, manufacturer or trader who cannot carry on his business as a result of being blasted to bits by a nuclear incident, why could not he recover in the same way and on the same measure of damages as in the normal action for tort?

I still do not know from the Minister whether his view is that the normal rules of tort apply or not under this wording. I do not think that they do, and I do not think that we ought to part from this until we have a firm assurance that they do.

Mr. Peyton

I must say that I feel unhappy about this. In column 32, the right hon. and learned Gentleman said to the Committee: I do not accept the view that a corporation is entitled to an unlimited claim for compensation."—[OFFICIAL REPORT, Standing Committee A; 8th December, 1964, c. 32.] He went on to say what the reason was for an extreme case, in column 35 as my hon. and learned Friend, the Member for Wanstead and Woodford (Mr. Patrick Jenkin) has pointed out: All that I am saying is that it is the Government's intention to place a corporate plaintiff in an action under the Bill in the same position as he would be in an action for negligence at common law in which liability were either admitted or proved."—[OFFICIAL REPORT, Standing Committee A; 8th December, 1964, c. 350.] I do not wish to seem unduly suspicious but it seemed to me that the hon. Gentleman, in column 32, was letting out a little bit of dogma, whereas in column 35 he was being very much more reasonable.

This is a much more proper approach to legislation. I echo the question whether the right hon. Gentleman is, in the name of the Government, absolutely satisfied that he has discharged the undertaking which he gave in column 35, which I have just quoted. If he is not absolutely satisfied, if there is any shadow of doubt at all, I think that he owes it to the House to leave the matter open until the Bill goes to another place, so that we may be assured that a corporate plaintiff will in fact, in law, be in the same position under this Bill as he would be at common law. I admit that this is a difficult matter. These are uncharted seas and there is no reproach against the hon. Gentleman at all.

Sir Eric Fletcher

Whatever I say, the matter will in fact be left open, because this matter can be further ventilated in another place. I have no doubt that it will be and it is desirable that it should be. I would say that I am confident that I have fulfilled the undertaking which I gave in Committee, as expressed in column 35. It is the Government's intention to place a corporate plaintiff in an action under the Bill in the same position as he would be in an action for negligence at common law in which liability were either admitted or proved. It is my belief that the words in the Bill adequately give effect to that intention.

Mr. Peyton

rose—

Sir Eric Fletcher

May I just add this before I give way? The hon. Member will appreciate that there is an inherent difficulty here which no words can resolve. It arises in this way—let us assume that some large company brings an action at common law because of somebody's negligence. Let us assume that it is not a case of a nuclear incident, Let us assume that it is a case in which extensive damage is caused to somebody's factory by reason of somebody else's negligence—perhaps a fire or aeroplane accident or some such occurrence due to negligence. In any such case where there is a claim for damages, it is inevitable that there should be a dispute between the parties about the amount to which the claimant is entitled.

10.30 p.m.

No one can dogmatise as to whether a claimant is entitled to say, for example, that if such and such an accident had not arisen he might have just been on the brink of fulfilling some very valuable contract which would have brought him in hundreds of thousands of pounds and that, having lost that contract, he is entitled to claim. In any such case there would be a contest as to how far he could support his claim and how far he could not, and the result would eventually depend upon a judicial decision which could not be predicated by any kind of words because that is not how the common law works.

We are trying to arrive at a position in which we put a claimant under this Bill in the same position. It is not easy to do so, but I think the words that we have chosen are apt in producing that result.

Mr. Peyton

I do not want to press the Minister too hard, but I hope he will think that I am not being unreasonable in stressing this matter. Of course, the matter remains an open question because the Bill has to go to another place. I appreciate that. But, on the other hand, there is something more in it if the Minister says, "In order to satisfy the House absolutely we will commit the Government to looking again at this matter, to make absolutely sure that what we have said and what we have undertaken has, in fact, been carried out". This is all that I am asking and I do not think it is asking too much.

Mr. Patrick Jenkin

I do not wish to be unkind to the Minister, but could he point to the words in any Amendment that has been moved tonight which have any effect on a corporate plaintiff's right to claim, and that would justify the Minister's claim that he has fulfilled his pledge in column 35 which has been quoted tonight? I do not think it affects the matter one way or the other.

Mr. Peyton

With the leave of the House, Mr. Deputy-Speaker, I really must—

Mr. Deputy-Speaker (Dr. Horace King)

Order. The hon. Gentleman may only speak again with permission.

Mr. Peyton

I did say "With the leave of the House", Mr. Deputy-Speaker.

Mr. Deputy-Speaker

I do not think the hon. Gentleman understood. He can only speak again with the permission of the House. He has not asked leave of the House to speak.

Mr. Peyton

I am sorry, Mr. Deputy-Speaker, but I do not think you heard me. I did say "If I may, with the leave of the House".

Mr. Deputy-Speaker

I am sorry.

Mr. Peyton

I do not think I am being unreasonable in making this request. I would be very disappointed indeed if the Minister could not see his way to making this very small and limited concession in order to assure the position. We admit that this is a new field of legislation, and it is a very small thing to ask the Government to say that they will leave the matter open, that they will have another look at it and that attention will be given to it in another place. The hon. Gentleman would be running contrary to the line of conduct that has been adopted throughout the proceedings tonight if he did not grant us this small request.

Sir Eric Fletcher

Of course, I can give the hon. Gentleman that assurance. The hon. Gentleman is being perfectly reasonable. He, first of all, asked me if I was confident of the view that I previously expressed and I repeated my confidence. But this is not a matter in which one can dogmatise. It is open to be reviewed in another place, and I can assure the hon. Member that between now and another debate in another place the fullest attention will be given to everything that has been said in this debate and in Committee, to see whether, in the Government's view, any further revision should be called for, although my present view is that it is not. But the whole matter is not precluded by what we decide now.

Amendment negatived.

Amendment made: In page 17, line 27, at end insert: injury" means personal injury and includes loss of life;—[Mr. John Morris.]