HC Deb 17 November 1978 vol 958 cc771-876

11.7 a.m.

The Secretary of State for Social Services (Mr. David Ennals)

I beg to move, That this House takes note of the Report of the Royal Commission on Civil Liability and Compensation for Personal Injury (Command Paper No. 7054). The report of the Royal Commission on civil liability and compensation for personal injury—the Pearson report—was published in March. The Commission had been set up five years earlier following the Robens committee on safety and health at work and in the light of concern about thalidomide. My right hon. Friend the Prime Minister welcomed this comprehensive review when it was published and made a statement in the House. I would like now to add my thanks to Lord Pearson and his fellow Commissioners. They did an enormous job and they did it well.

The Government regard this debate not so much as an opportunity to announce policy decisions on the proposals in the report but rather as an opportunity to consult the House and to hear the views of hon. Members. That does not mean that we have not done a great deal of thinking about the report. I and my right hon. and learned Friend the Solicitor-General will try to let the House know where this thinking has led us so far.

The process of consultation began with the Royal Commission. Its report makes it clear that it circularised widely and gathered an immense amount of useful information. Since publication Government Departments have asked for and received comments from a wide range of organisations. With this debate we near the end of the process of gathering views and information.

Naturally, my colleagues and I are considering the way ahead over the next decade in close association with the Labour Party and the TUC, as the joint TUC-Labour Party document "Into the Eighties" shows. Hon. Members will be interested to learn that the TUC held a special full-day conference on the Pearson report on Wednesday. The conference was addressed by Lord Pearson and by my right hon. Friend the Minister for Social Security. There were many useful contributions and a great deal of helpful material emerged. Many of the delegates were trade union officials concerned with securing compensation for their injured members. Their experience is first-hand and immediate. I am grateful to the TUC for arranging this conference.

The report covered a large number of topics, diverse in their nature but unified in that each one is concerned with personal injury. I will deal with the 188 recommendations under two main headings, namely social security and damages, and then, arising from those two, a third heading dealing with the balance between them. I know that the House will forgive me if I am brief, even on important matters, and if I inevitably omit some topics altogether. If I were not to be brief I would use all of the time available for this debate.

During the five years of the Commission's deliberations important changes were taking place in the provision of social security benefits for the sick and disabled. When the Commission started its work, the only non-contributory benefit for such people was attendance allowance, implemented by the Conservative Administration but based on the legislative proposal for which I was responsible as a Minister in this Department in 1970.

Let us look at what has happened since then. The Government have introduced a whole range of new benefits for the disabled which do not depend upon contributions. There is the mobility allowance, which will be going to over 100,000 people by the end of the year, and which, as I announced last week, is to be extended to a new group—women aged between 60 and 65—under the provisions of the Social Security Bill which is to have its Second Reading next Tuesday. There have also been the non-contributory invalidity pension and the housewives' non-contributory invalidity pension.

Invalid care allowance is yet another entirely new benefit which we have introduced. The provision for an earningsrelated component of contributory invalidity pension in the new scheme is a feature which will become increasingly important as the years go by. There is no doubt that my hon. Friend with responsibilities for the disabled has presided over a period of radical change in provision for the disabled. Indeed, the House may care to note that cash benefits for the chronically sick and disabled were in real terms nearly £400 million more in 1977–78 than they had been in 1973–74.

Thus, the backcloth against which we have to consider the Royal Commission's report is a very different one from that against which the Commission was set up in 1973. The report certainly has arrived opportunely, at a time when the strategy for the further development of cash benefits for the disabled in the long term is a very live issue for all those concerned with this area of social policy. I think it is true to say that there is a general feeling that we may have gone about as far as is sensible in the construction of further indidivual benefits for particular kinds of disablement, with the range of benefits which now exist.

Organisations representing the disabled strongly favour some kind of general disablement allowance which will reach a wide range of disabled people rather than yet more specific individual benefits. This would be consistent with the other frequently expressed view that the social security scheme is quite complicated enough already and, if anything, ought to be simplified. It is for that reason that we have been studying the future of supplementary benefits.

It is with such considerations in mind that we need to consider the Royal Commission's recommendations on social security, particularly those for a scheme for the victims of motor vehicle accidents and a benefit for severely handicapped children.

The Royal Commission recommend that those injured in motor vehicle accidents should get social security benefits at the same rates as those injured at work. Its concern was with the large number of deaths—about 7,000 a year—and injuries—290,000 a year—on the roads, with the fact that a social security scheme seemed practicable for these people and that there was a ready source of finance from those who created the risk, and with the fact that entitlement to damages was available, even in theory, to only a proportion of these victims. In practice the proportion worked out at only 25 per cent. There are some obvious attractions in this proposition, but there are some major snags as well, and these will certainly have to be taken into account.

First, I make the point that we are not talking about benefits for a class of people who are somehow ineligible for existing social security benefits. If they satisfy the conditions and are incapable of work they can get sickness benefit, or invalidity benefit of the contributory or non-contributory kind. If their injuries are serious, they may be entitled to mobility allowance or attendance allowance, or both. So what we are talking about is not the bringing into benefit of a class of people who are at present without any cover; what is suggested is the provision of benefit at rates which are higher, sometimes a great deal higher, than are available to ordinary beneficiaries.

My first concern is that this proposed extension of benefits, which are higher than is ordinarily available, by reference to the cause and not to the severity of the disability, is an entirely new concept. It runs contrary to our thinking so far.

My second concern is about retrospection. It is difficult to see how we could cover past cases in a satisfactory way. With 290,000 motor injuries a year there must be many people in the community who are still disabled from road accidents in the past. If we were to try to cover them, we should need a very considerable apparatus to check back. The catastrophic accidents would be small in number and sadly easy to verify, but there would be many cases, perhaps tens of thousands, for which acceptance of present disablement as caused by an odd accident would be difficult and sometimes impossible to prove.

The alternative is to bring the scheme in for future accidents only. This is what the Pearson report recommends. It makes administrative good sense, but as Secretary of State I should hesitate to recommend a scheme which ignored existing disablement. It would lead to a great deal of personal conflict between individuals and a great sense of injustice. This would be the more so if there seemed to be some eventual prospect of a road accident scheme which was not limited in this way.

Organisations representing disabled persons are deeply apprehensive about this recommendation and, of course, many of them have been expressing their views, which I have been considering. The Disablement Income Group says: We can't emphasise too strongly how seriously worried we are that implementation of two of the main changes advocated by Pearson—improvement of the industrial injury scheme and its extension to those disabled through road accidents—will inhibit or perhaps even preclude the introduction of the Disablement Costs Allowance we seek. … The introduction of the proposed scheme would establish yet more firmly, the erroneous idea that the cause and not the effect of disability is the important criterion; would create invidious comparisons and would use scarce manpower and financial resources in assessing a host of people who have only suffered minor injuries. The Disability Alliance argues that the cause of disability must cease to be the main consideration in determining the benefit; the degree of handicap must be the basic factor. The Royal Association for Disability and Rehabilitation considers that the road accident scheme would make it more difficult to secure income support and an expenses allowance for all disabled people on the basis of the severity of their handicaps, and irrespective of its cause. I share this view.

Their worries are not just about the money, although that is a big enough one, but about the extent to which we should need to use administrative resources, including scarce medical manpower, on accidents that were not serious. These resources are limited, and if we decided to go ahead with the road accident scheme they would be fully absorbed by it.

Of course, though many road accidents are not serious, large numbers of them are. In this connection the point is made to us that, though a road injuries scheme would exclude people injured or disabled through other causes, the kind of programme for a general disablement allowance which is being urged upon us by various bodies would include those road victims who were disabled seriously enough to qualify.

So the alternative proposals I have been touching on and which are reflective of some of our own thinking do not exclude those whose disability is caused by road accidents. But I have to say, quite plainly, that there would be no hope at any time in the foreseeable future of going ahead on both fronts at once. I do not think that this should be a party issue. The demand on resources would be enormous. I do not think that we could go ahead even if the funds could be found. Money apart, the administrative and medical resources would not be available for both the road injuries scheme on the lines envisaged by Pearson and the introduction of a general disablement allowance.

Mr. Peter Hordern (Horsham and Crawley)

Will the right hon. Gentleman address himself to one point which concerns the effect on someone who has had a severe motor accident and been awarded compensation in the courts?

The severity of the injury itself may not preclude the victim from getting another job and being able to take employment of some kind, but when, for reasons quite apart from his own ability, he is unable to pursue that employment and is then dependent upon social security and supplementary benefit, the compensation that he has received because of his accident is taken into account, and he has to run through it all before he is eligible for supplementary benefit.

That seems to me to be plainly wrong. Will the right hon. Gentleman address himself to this matter and at least give us an indication where his mind lies upon it, and especially whether he will be able to review this effect of the rules that apply to supplementary benefit?

Mr. Ennals

I shall be dealing with that question a little later. One of the proposals in the Pearson report concerned the extent to which social security should take into consideration other payments, such as compensation.

Mr. Patrick Jenkin (Wanstead and Woodford)

I have the impression that the Secretary of State is moving away from the question of motor vehicle accidents. The Royal Commission recommended the extension of the social security scheme to cover this matter, but there were other proposals before the Commission. Will the right hon. Gentleman say anything about the possibility of some kind of no-fault liability scheme through the insurance industry?

Mr. Ennals

I am coming to that. It is in the second group of compensation matters about which I shall talk. I shall give way later or ask my right hon. and learned Friend the Solicitor-General to deal with any points that right hon. and hon. Members may feel have not been effectively dealt with.

I was coming to what I think must inevitably be linked with the possibility of a general disability allowance—the proposal in Pearson for a benefit for severely handicapped children. The report recommend a benefit for such children of £4 a week at January 1977 prices.

Benefits for children are more generous under this Government than they have ever been. There is a child benefit of £3 a week for all children, whether disabled or not. Next April this will be £4. If the children are disabled there may be entitlement to an attendance allowance of £10.40 or £15.60, according to the degree of need, or to a mobility allowance of £10.

There are 46,000 children receiving attendance allowance and 18,000 receiving mobility allowance, and of these quite a number receive both. So for the most disabled children there are already benefits of up to £25.60 a week, in addition to the child benefit. As from next April, that takes the amount up to almost £30.

I am sure that the House will agree that it would be difficult to accept this recommendation without knowing what may be the outcome of our long-term consideration of a general disablement allowance.

If we concluded that such an allowance was the right way forward, we should be likely to include children within its scope, as we have sought to include them in the scope of other new benefits, of which the mobility allowance is perhaps the best example. Therefore, I must reserve the Government's position on this recommendation until we can announce decisions on the issues that I have been talking about.

I come now to the industrial injuries scheme. The Royal Commission put forward a number of recommendations, some for specific action, such as extending the scheme to cover commuting accidents, to cover the self-employed, and to change the way in which certain benefits are calculated. Other recommendations simply drew attention to matters that should be given further study by the Department—notably special hardship allowance.

We have decided to take action on two fronts. First, I have asked the Industrial Injuries Advisory Council to consider the Pearson recommendations about occupational diseases. This will enable the council to give me advice about the proposal that we should adopt the proof system for industrial diseases, which would enable a claimant to succeed, even if his disease was not prescribed, provided he could show that his disease was a particular risk of his occupation. [Hon. Members: "Hear, hear"]. It will also enable the council to look carefully at the list of prescribed industrial diseases and to consider whether it needs amendment, and whether the procedures for adding to it could be improved.

More important, the council will be in a position to advise me on whether occupational diseases should still be covered by the prescription system. There is a long-standing debate on this. I think that one side was reflected by my hon. Friends' reaction to what I said a moment or two ago.

The debate involves, on the other side, those who favour prescription, which means that only diseases that are a particular occupational risk can be covered and thus that conditions such as bronchitis and rheumatism, which are common in the population at large, are not covered. The contrary view is that a man should be able to succeed in his claim if he can establish that his condition arises out of his work. That view would bring in claims for bronchitis and rheumatism.

The problem is a long-standing one, which has been considered on a number of occasions. It centres upon the difficulty of asking individual doctors on particular claims to provide answers to questions that the medical profession finds difficult to answer. The council will be considering what the present state of medical knowledge on this matter is.

Mr. Leo Abse (Pontypool)

When my right hon. Friend refers the matter to the council, will he indicate to it that there are certain people that the trade unions clearly regard as priorities—for example, the slate workers in North Wales? Moreover, many representations have already been made by trade unions on syndromes arising from work—syndromes upon which much work has been done. In view of the pressures of public opinion on these matters, it would be helpful if the council could give a high priority to the matters already within its knowledge, it having had pressure from the unions.

Mr. Ennals

I am grateful to my hon. Friend for that intervention. He will recall that the Gracious Speech included the following passage: My Government are examining schemes to provide compensation for those such as slate quarrymen who have suffered respiratory diseases from dust in their employment, but who are unable to obtain such compensation through the courts because their employers have gone out of business. The potential beneficiaries will include not only quarry workers but people from other industries, such as iron ore mining, iron and steel foundries, the potteries, textiles, and asbestos.

I shall ask the council to look at all the points that are made in this debate.

Mr. Robert Boscawen (Wells)

Will the right hon. Gentleman also ask the council to look at the question of the retrospective effect of prescribing new diseases that were not known at the time when they may have been contracted?

Mr. Ennals

I shall certainly draw the council's attention to that. I do not want to do it in any way that would suggest that if it reached a certain conclusion I would necessarily accept it. That reservation must apply to any advice that I receive from the council as a result of this reference. But I am grateful to the hon. Gentleman for raising the matter, and I shall ensure that it is considered.

I now turn to the second action that we have taken. As my right hon. Friend the Minister for Social Security told the House the day before yesterday, we have also decided upon a thorough review of the industrial injuries scheme. It will be conducted by officials and will take account of the Royal Commission's recommendations.

The review will cover not only these recommendations but other important areas of the scheme on which the Commission did not have specific detailed proposals to make, such as special hardship allowance. In the Government's view, the Commission's recommendations for changes in the industrial injuries scheme cannot be looked at in isolation from the rest of social security. Accordingly, I have asked that the review should take account of the way in which industrial injuries benefits fit in with other forms of social security. The Royal Commission's report did not extend to a comprehensive analysis of this kind, but I am sure that it is needed.

The scheme has remained virtually unaltered since its introduction 30 years ago. We have reviewed and in some cases reformed many other aspects of social security. I am thinking of pensions, family support, to a different extent disability, and now supplementary benefit. It is time for a review of industrial injuries benefits.

I expect the study to be completed by the spring. It will then form the basis of consultation with the TUC, the CBI and others concerned with the future of industrial injuries provision. I am sure that any alterations in the structure of what is a well-tried and tested scheme should be undertaken only after such informed consultation. I can say that the TUC has very much welcomed the decision to carry out this review and, of course, we shall be consulting it.

The second of my themes—I promised hon. Members that I should be coming to this—is the subject of damages. The Royal Commission's recommendations on damages account for a large number of its 188 recommendations. I will concentrate upon two groups of recommendations—those advocating extensions of strict liability, and those proposing alterations to the amounts and form of damages. Hon. Members may be reassured by the thought that their questions on these topics will fall to be answered not by me but by my right hon. and learned Friend the Solicitor-General. When legal questions are involved. I am always glad to have a lawyer near at hand, as well as one or two behind me and, for that matter, in front of me.

The Royal Commission proposed extensions in the scope of strict liability as the basis for recovering damages. This would make recovery easier for plaintiffs in that they would no longer have to show that the harm they suffered was caused by a defendant's negligence. They would still, however, have to show that the harm resulted in the way that they claimed, and this can be a most difficult and contentious business. I make the point in order to avoid giving the impression that a move to strict liability from negligence is some sort of plaintiffs' charter. It is not.

The proposal to enable persons injured by defective products to recover damages without proof of negligence supports broadly the proposals and recommendations of the Council of Europe, the EEC Commission and our own Law Commission.

As my right hon. Friend the Secretary of State for Prices and Consumer Protection said in a Written Answer on 2nd August, the Government are sympathetic to this proposal and believe it would be an important and widely welcomed reform in the civil law. However, as he went on to say, the Government are aware of the anxiety in industry about the possible effects of such a change.

The main argument for the change is the general one that it is right for the cost of injuries caused by a defective product to be borne by the producer—the one who has created the risk and who can spread the cost over all the consumers of it—rather than by the unfortunate person who has suffered the injury as a result. The experience of thalidomide makes the case for that very strongly. The change would benefit only a narrow class of injured people, and the total cost to the economy would be correspondingly small in relation to the major Pearson proposals.

The misgivings of manufacturing industry are based on concern about possible economic consequences. In particular, industry is concerned about the possible effect on competitiveness and the introduction of new products, about the possible burden on small firms, and about the special problems for some product sectors.

One of these sectors is the pharmaceutical sector. Medicines are different in several respects from most other products We have a good deal more work to do before we can devise a practical scheme to provide additional protection for the patient without costly litigation or the risk of inadvertently damaging the public interest by, for example, driving useful medicines off the market or by discouraging research and development. We would not want to do that. These are considerations which cannot possibly be ignored.

Before reaching a final decision, the Government are carrying out further detailed consultation with industry and, in the case of medicines, the professions, in order to assess these potential problems and to examine how the principle of strict product liability might be implemented in such a way that the interests of the consumer and of industry are equitably balanced. I shall certainly take careful note of what is said in this debate and in the debate outside. I noticed in the press this morning, for instance, that the Consumer Council has published a survey on public attitudes to this proposal which I think reflects very widespread support. However, I have not seen the questions that were put, and I believe that one always wants to see the questions that are put before drawing any conclusions from the answers that are given.

Mr. Michael Grylls (Surrey, North-West)

Can the right hon. Gentleman tell the House a little about the tactics or strategy of the Government? Do they intend on this, whatever is the eventual detail of the legislation, to proceed as the United Kingdom or to go through the European method? Do they intend to wait for Europe or to go it alone?

Mr. Ennals

Since we are in the process of consultation and since I have been very careful no to commit the Government to proceeding in any direction, I had better refrain from being drawn by that question.

Mr. Greville Janner (Leicester, West)

I should like to follow that question, because I had a reply to a Question that I put to the Secretary of State for Prices and Consumer Protection to the effect that the Government were waiting for what Brussels did. If Brussels changes the draft directive into one that we shall have to implement, action will become incumbent upon us. I understand that this is a fair certainty. Therefore, can my right hon. Friend give the House some idea of the time scale to which he is working and tell us when he expects this action in Brussels to take place? Then we shall have some idea of how long is the maximum period that the consultations could last.

Mr. Ennals

I am sorry to disappoint my hon. and learned Friend. 1 shall not be drawn, because I said at the beginning, in relation not just to this question but to the broader questions, that I had come here to indicate such general lines of thought as the Government had reached and to say that on most issues I wanted to hear the views of the House. I hope that my hon. and learned Friend will manage to catch your eye, Mr. Deputy Speaker. I assure him that I shall take what he says very seriously.

I want now to come to a related matter, which is vaccine damage. The Royal Commission recommended strict liability in respect of vaccine damage when vaccination was recommended by the State and was undertaken to protect the community. We are, in consultation with the medical profession, studying this recommendation, and we still have a good deal more work to do. If it were concluded that the law should be changed so that strict liability became the basis for actions, the precise ambit of the change would need to be considered very carefully.

As the House knows, we have, however, taken some action about vaccine damage. We have decided already that whatever Pearson concluded about the long term, we could not leave things exactly as they were. We therefore decided to bring in a scheme of payments for those severely damaged by vaccination, and legislation was promised in the Gracious Speech. I cannot yet give a date by which that legislation will came forward, but right hon. and hon. Members will not have long to wait.

In the meantime, we have made good progress in getting the scheme under way. I promised that we would deal with this as a matter of urgency, and we have done so. I hope that we shall be able to make the first awards of £10,000 before the end of the year. I am very gratified by the way in which applications have come forward and the expeditious way in which my colleagues working at Norcross are processing these many applications, difficult job though it is. Many of them go back over a considerable period. However, it must be made clear that the scheme is without prejudice to the Government's consideration of the proposals for strict liability, and acceptance of the £10,000 award will in no way limit entitlement to pursue claims for compensation under any future legislation.

I want to go on to the amount and form of damages and the three months' threshold. The Pearson proposal on strict liability is that no damages should be paid for the first three months of pain and suffering. This would undoubtedly eliminate a large number of small claims, and would to that extent make its contribution towards the Pearson strategy of spending money on more serious rather than on minor injuries. The evidence that we have received since the report was published is, on the whole, opposed to this recommendation, and in the discussion that took place at the TUC conference on Wednesday strong arguments were used against this three months' threshold. But we shall need to see how it fits into the Government's overall strategy.

The recommendation that periodic payments should be substituted for lump sum settlements relates to damages covering future pecuniary loss in cases of death or serious and lasting injury. It might enable better recognition to be given to unforeseen changes in the circumstances of plaintiffs. However, it would require a complicated apparatus to ensure that periodic payments kept the value that the awarding judge meant them to have. This is a considerable snag.

The possibility of instituting the system recommended and the necessary apparatus it not ruled out at this stage. But the Government's impression is that lump sum settlements are preferred by plaintiffs and defendants alike, and that although they do have disadvantages in indivdual cases, they do permit all parties, in a sense, to forget their grievances and to get on with the business of picking up the threads of ordinary living again. The very small use made of the facility for periodic payments in France, for example, suggests that where there is choice it is not generally exercised in favour of this system.

One of the advantages of the work of the Pearson Commission was that it examined comparable experience overseas. It is wise that we should draw such conclusions as we can from that experience.

These considerations prompt the thought that arrangements for periodic payments might not be worth the effort and additional expense involved. We shall take careful note of what is said today and consider whether we should modify our provisional attitude, which, as the House will gather, is one of scepticism.

I now turn to the balance between social security and damages. I promised the hon. Member for Surrey, North-West (Mr. Grylls) that I would deal with the question of offsets.

The last main recommendation about damages is that they should be reduced in full by the value of social security benefits, The present position is that damages are reduced by half the value of benefits for five years.

We have decided that we should defer our decisions until we have seen what action flows from the review of the industrial injuries scheme and the consultations that will follow it next year. Only then shall we be in a position to judge how changes in the present system would fit in. That means that we are not now promising any action on what the Commission regarded as one of the essential elements of its policy—a correct balance between the remedies of social security and of damages. I hope that the House will agree that we would be unwise to force these matters to a conclusion before we are really sure about them.

Mr. Bruce Douglas-Mann (Mitcham and Morden)

What are the Government's views of the question of strict liability, which was raised by the hon. Member for Surrey, North-West (Mr. Grylls)? My right hon. Friend will appreciate that Pearson rejected the idea of strict liability for road accidents on the ground that he was proposing a scheme which was comparable to the industrial injuries scheme. The Secretary of State has just said that the Government are not proposing to introduce the industrial injuries scheme. Does he propose to introduce anything on the lines of a strict liability scheme for road accidents which would impose upon the owners or insurers of vehicles responsibility for any damage that they cause?

Mr. Ennals

I have given a general impression without entering into a commitment. Many other hon. Members will wish to speak about this issue during the debate and I hope that my right hon. and learned Friend the Solicitor-General will deal with the matter later.

Mr. Nigel Spearing (Newham, South)

Paragraph 9 of the report refers to a visit to Australia by the Pearson Commission and discussion with those who were preparing an even more comprehensive system of compensation and benefits which might go beyond what Pearson recommends. The Secretary of State said that the Government are sceptical of some of these proposals. Are the Government pursuing this matter or finding out what Australia has in mind?

Mr. Deputy Speaker (Sir Myer Galpern)

I am becoming a little worried, because 16 or 17 hon. Members are anxious to take part in the debate. They will not be accommodated even if we continue the debate until 4 o'clock. I appeal to hon. Members not to intervene. This will give them a better chance of being called to put their case.

Mr. Ennals

The fault is mine, Mr. Deputy Speaker, if I have been too generous. I can assure you that during the next two or three minutes I shall not be tempted to give way. However, I am pleased that my hon. Friend the Member for Newham, South (Mr. Spearing) intervened. I hope that my right hon. and learned Friend will reply to the point that he raised.

Given the length and depth of the Royal Commission's report, there are many topics that I have not mentioned at all. For example, I have concentrated upon social security and damages, although they are not the only form of compensation. Those topics that I have touched upon I have had to discuss only briefly, but, I hope, not superficially.

Amongst the subjects I did not mention was the report's conclusion that tort should continue in existence. The Government's reading of the report, and their interpretation of the evidence submitted to it since the report was published, lead us to suppose that this conclusion has general acceptance. The common opinion seems to be against the view, held in some academic circles, that tort should be abolished.

I did not comment on the fact that the Royal Commission's recommendations were generally confined to disablement caused in particular ways, as its terms of reference suggested they should be, but I hope that I have made it clear that my own responsibilities as Secretary of State for Social Services go much wider than this. I am concerned with all kinds of incapacity and disablement, however they are caused. If the congenitally ill and the constitutionally disabled were outside the Royal Commission's terms of reference, they are not outside mine or the Government's.

The Government have arranged today's proceedings in order to listen. I shall resume my seat and listen.

11.47 a.m.

Mr. Patrick Jenkin (Wanstead and Woodford)

The Secretary of State has spoken for over three-quarters of an hour. He said that he would make no policy announcements and he has been as good as his word. We have heard nothing at all of positive proposals. He referred to past action and gave indications of the way in which he and his right hon. Friends might lean in the future. Of positive proposals we had none.

But perhaps that is no bad thing. This is an immensely complicated subject. Unlike the Secretary of State, in my dim and murky past I spent some time in the legal profession. Nevertheless, I am relieved that my hon. and learned Friend the Member for South- port (Mr. Percival) is sitting beside me. I am sure that some of the matters can be dealt with more expertly by him than by me.

I must make a protest. I was surprised that the Government thought it was right that this topic should be debated on a Friday. It is a hugely important subject. This is shown by the Secretary of State's speech and the number of my right hon. and hon Friends who are here. I hope that I shall not speak for as long as the Secretary of State did but, inevitably, Front Bench speeches will take up much of the time. We shall be left with only two and a half hours for Back Bench speakers. That is not good enough. I hope that when the Government have moved further in their thinking we shall have another full day's debate so that more hon. Members can give their views.

The origins of the Pearson report lie in the thalidomide disaster. There was some doubt about the compensation available to the victims of that disaster and even whether they would receive anything at all. The procedures involved in deciding whether they should be compensated took a long time. Therefore, the Government of the day decided that it was time to have a look at the whole area of compensation for personal injury.

In the representations that have been made on the report, though interestingly not in the right hon. Gentleman's speech, there have been criticisms of the terms of reference. It is right to make three points on the suggestion that they were too narrow. First, it was necessary on a subject as large as this to keep the scope of the inquiry within reasonable limits, otherwise the task of the Royal Commission would have been absolutely hopeless. It was difficult enough as it was. Secondly, any Government—the right hon. Gentleman acknowledged this—have to have regard to the likely cost implications of proposals that may be made, and that, too, had to be borne in mind. Thirdly, the Commission was set up in the general climate created by the thalidomide disaster where the overwhelming need was to deal with the problems of injury by accident of that kind rather than to deal with disability generally.

Granted that those were the reasons why the Royal Commission's terms of reference were constrained, I entirely agree with what the right hon. Gentleman said and what was said in an article by the Wolfson college team—Donald Harris and his colleagues—that the government in formulating policy in the light of the Pearson proposals is not of course confined to their terms of reference. Nor do I, in my remarks today, feel so constrained. The report is very long and there are a great many recommendations. It would be helpful if the right hon. and learned Gentleman the Solicitor-General could give some indication, perhaps more clearly than the Secretary of State did, about how the Government see the timing and procedure on this matter.

The Secretary of State indicated that the process of consultation is nearly completed. Does that mean that we will be presented with a great clutch of decisions and proposals all at the same time? I am not sure that that would be wise. There are very big issues here, not least that of product liability, to which my hon. and learned Friend will return. I have been told, for instance, that the imposition of strict liability in the food and drink industry would be likely to increase the cost of insurance sevenfold. That is a step that should not be taken lightly or unadvisedly. If the Solicitor-General could say more about how these issues are to be handled, it would be helpful.

In his statement on 16th March the Prime Minister said that in reaching their decisions the Government would study the recommendations with care and urgency and consult interested organisations as appropriate."—[Official Report, 16th March 1978; Vol. 946, c. 638.] The point I am making is that the emphasis should be more on the care than on the urgency because it is necessary to get these things right. It is already apparent that the DHSS has taken some steps. The right hon. Gentleman referred to his announcement of 7th July about occupational diseases. This will be welcomed in all parts of the House. One realises that the present system has been inadequate and has given rise to grave hardship. I am bound to say, with some of my hon. Friends, that the decision on slate quarrymen's pneumoconiosis may have owed rather more to the parliamentary requirements of the Government at the time. Nevertheless, it has been welcomed and we recognise that. There was also the announcement by the right hon.

Gentleman the Minister for Social Security, only the day before yesterday, that the industrial injuries scheme is to be reviewed. I would like to come back to that because the Minister made some interesting remarks on the road accident scheme.

We have also had the promise of legislation on the vaccine damage scheme. The right hon. Gentleman suggested that vaccine-damaged children might have the right of claim under some form of strict liability if the Government so decide. He made great play with the difficulties of retrospective legislation in relation to road accidents. Is he envisaging that strict liability made available in vaccine damage cases will be retrospective, or will it apply only to those injured in future?

It seems to me that the difficulty about this report is that, whereas one can proceed piecemeal on a series of separate and fairly disjointed proposals, this is much more difficult unless one can see some kind of underlying principle that should guide the House and the Government in reaching their conclusions. It is no secret that the Pearson report has aroused deep misgivings in many quarters, not least because there does not seem to have been running through its recommendations any discernible thread of principle on which to base one's conclusions.

Some see the report as a historic turning point in our affairs and as the opportunity for making historic decisions. In particular, the Disablement Income Group—the right hon. Gentleman referred to this—has made this point. In a letter to the Minister with responsibility for the disabled, Mr. Peter Large wrote: The Pearson report brings us to a critically important crossroad. The implication is that decisions taken now will take one irrevocably down one road rather than another. If I may quote Mr. Large's letter, he said: We can go down the Pearson road and progressively establish improved help for disabled people based on the cause of disability, or we can go down the DIG road and build up a system that is soundly and equitably based on the financial effects of disability". I am not sure that that is not putting it a little too high. I am not sure we face that kind of decision in quite that stark way.

When one looks, for instance, at the possibility of a motor accident scheme, I share the right hon. Gentleman's disquiet about what is proposed in the report. But it would be perfectly feasible to advance on American lines through an insurance scheme. I wonder whether that would necessarily preclude us from moving in the direction that DIG and other disablement groups would want. I have said before, in our debates on mobility, that it is right progressively to improve the support for the disabled, but that, in so doing, we should look more at the degree of disablement and at the needs of the disabled and pay less regard to the causes of disablement.

I might add straight away, in order to allay any alarm that may be aroused, that this in no way affects the principles and priorities governing the payment of entitlements to war pensioners. I take this opportunity on the Floor of the House to repeat the assurances that I gave on behalf of my party last February to those representing war pensioners: The Conservative Party is anxious, when resources allow, to improve support for the disabled. War pensioners' entitlements have always enjoyed a special position, compared with corresponding civilian benefits, and the Conservative Party fully recognises this. In any changes that we may make, it is our intention to retain this preference and to ensure that the real value of war pensioners' entitlements is maintained. I stress this because when I made a statement about causes and effects last year I felt as if I had stepped on a very hard rake indeed. I think there was a misunderstanding, but I hope that it has now been straightened out.

Mr. Ivan Lawrence (Burton)

Does my right hon. Friend agree that there is another crossroads that has been reached? This is whether we go down the road which leads to primary State responsibility or down the road that leads to primary personal responsibility for fault and only secondarily to State responsibility as a back-up.

Mr. Jenkin

I think my hon. Friend will recognise that I shall be dealing with that because it is an enormously important point. If I may return to the choice which has been put to the Government and to us by the disabled organisations, I do not think that their fears, though I fully understand them, are necessarily entirely justified. I do not think that we have reached the point where we go either this way or that way. I do not see the issues in the report in such clear-cut contrast.

As I said, I have some sympathy with those who complain that what is missing in the report is any real attempt to agree on a body of principle on which progress might be made. The Wolfson college report said: They seem reluctant to commit themselves to clear and consistent goals. The point has also been made in a very valuable paper from Professor Jolowicz, of Cambridge university, which I have had the privilege of seeing: my own disappointment lies in the absence from the report of any serious analysis of either the grounds for imposing, or even the actual functioning of, civil liability in the social and economic conditions of today". Lord Pearson has claimed that that is perhaps unfair. He has said, I think, to a number of audiences that his report shows a rather massive consensus as to the general strategy and the main conclusions, in spite of dissents on some points and a lack of agreement on the objectives in the long term". I do not find it easy to discern from the report what that general strategy might be. There were those—I was never one—who were looking for a major new blueprint for a system of compensating people for all the misfortunes of life. They claim that they have been disappointed. This theme has run through many of the representations which have reached the Government and ourselves. I do not believe that any commission, whatever its terms of reference, however able its members and however long it wrestled with these problems, could devise such a Utopian blueprint or, even if it did, that it could reach agreement on it or secure agreement outside upon it.

So the crossroads that we have reached is not so much a crossroads for the future as one which shows where we have come from. Our present system, complex, imperfect and illogical as it is, is the product of two separate and distinct traditions which evolved, developed and were refined over many years. The older tradition is that of the common law. It has evolved into the modern law of tort. The Pearson report refers to this in paragraph 55.

After quoting the historic legal definition of tort by Lord Atkin in "the snail-in-the-ginger-beer-bottle" case, the report says: A possible analysis, not accepted by all of us, is that if a person by rash or careless comduct causes injury to another, the wrongdoer has or ought to have a feeling of guilt which needs to be expiated and the victim has a feeling of indignation which needs to be appeased, and that the expiation and appeasement are achieved by a payment of compensation. The report goes on to show how that concept has been extended over the years through vicarious liability, breach of statutory duty, the burden of proof, the doctrine of res ipsa loquitur and into strict liability. Such a system is essentially individualist. It depends on fault on the part of one who causes harm and the compensation, usually a lump sum, is individually assessed to reflect the damage caused to the one who is harmed.

But it is more than that, and we should recognise it. It reflects concepts of morality and justice which are deeply embedded in the whole fabric of our society. The tort of negligence depends on the concept of one's duty to one's neighbour and tortious liability therefore embodies the idea of personal responsibility. The word "tort" itself is the old French word for "wrong".

I do not believe that we should lightly discard a system of legal redress founded on such basic principles as wrongdoing, one's duty to one's neighbour and above all a sense of responsibility. I should therefore like to make it clear that I do not align myself with those referred to in paragraph 1715 of the report who would see the ultimate objective as the elimination of the action of tort for civil liability. I believe that that would offend the people's sense of justice.

Let me remind the House that, in the general furore in 1973 over thalidomide, one of the most powerful elements was the feeling that the company should pay. The hon. Member for Stoke-on-Trent, South (Mr. Ashley), who played such a leading part, not once but many times said in effect that the company was prepared to earn profits if thalidomide was successful and that it should be prepared to bear the costs when it proved a medical disaster. That is a point of view to which many would subscribe. Therefore, tort should remain, probably indefinitely, as part of the complex of systems through which those who are injured are compensated.

The second and more modern tradition is that of welfare. It looks primarily, if not exclusively, at the harm suffered by the injured party. Compensation is based not so much on the measurement of individual loss as on scales which are of general application and usually paid through weekly sums. Entitlement depends not on the fault of another but either on the circumstances in which the injury occurred, such as employment or war, or on the nature of the scheme which has been set up—such as for sickness or invalidity.

I do not agree with the Secretary of State that this all began in 1945 or, as he seemed to suggest, in 1970, when he was Minister of State, Department of Health and Social Security. It goes back much further than that. The social history of the last century could be written in terms of how new categories have been brought in, new benefits established or whole new groups transferred from reliance on the tort system for restitution to reliance on State systems of welfare. The most obvious example of that is the setting up of all the workmen's compensation legislation in the last century, now the industrial injuries system.

Both systems, tort and welfare, have one feature in common. Major categories of misfortune are not covered at all—in tort because of the inability to prove fault and in welfare because harmed individuals fail to qualify as being within existing categories covered by the schemes.

The Pearson report is about whether those two approaches to compensation should continue to coexist, and, if so, how. Is the boundary in the right place? If they cover the same purpose, how should the overlap be managed? If there are gaps, how should they be filled? If it is felt that there are categories where compensation is not at present payable but should be payable, who should bear the cost and how should it be borne?

The first thing that strikes one about the report is that it is a heterogeneous, even curious, collection of proposals. Certainly there are no radical reforms, as I have already said. One remark, attributed to an unnamed member of the Commission, sums it up rather well: We have merely moved the boundary lines. I do not say that it is any the worse for that, because one has to proceed gradually and by evolution, rather than by revolution. Perhaps that is as much as could be hoped for in the circumstances, but it is difficult to regard it, as some have done, as a major landmark in social and legal history.

Yet the underlying principles at issue are immensely important. As some of the representations which have been received make clear, there are those who see dangers in the report and those who see the chance of major advance.

The extension of the industrial injuries system to road traffic injuries and the improvements to the industrial injuries scheme itself, the DIG says, would make an elite group even more elite. The odd suggestion which few could favour, about extending the industrial injuries scheme to commuters, comes into the same category.

The Wolfson college report's comment may be fairly close to the truth. This is the article by Ogus, Corfield and Harris: The reticence of the Commission suggests that they were unable to find a satisfactory principle to justify the preference for work and road victims … The Commission confined themselves to the observations that 'this does not mean that we endorse such a preference in principle' and that the arguments adduced by Beveridge in 1942 to justify it 'carry a good deal less weight now'. The authors say: One is forced to conclude that the decision to reinforce an anomaly which can find no support in the mass of relevant literature was prompted by purely political considerations. The Commission presumably did not wish to render their proposals unattractive to the trade union movement. That may have more than a smack of truth. At the same time, it is widely recognised that the cost of moving quickly to a comprehensive disability scheme such as DIG or the Disability Alliance argues for would be prohibitive. Yet I am sure that we have to move progressively towards some form of comprehensive and coherent system of support for all the disabled, including those born disabled, those disabled in accidents in the home—where there is no claim—and those disabled by disease.

We have built up a pattern of benefits which is thoroughly untidy, illogical and often capricious. Some of the benefits are contributory, some are non-contributory. Some are taxable, some are non-taxable. Some are means-tested, some are non-means-tested. Some are cumulative—a person may have several—and others are caught by the overlapping benefits rule. The system has been admirably exposed in all its complexity and inadequacy by The Economist intelligence unit report "Whose Benefit?" It will be the intention of a Conservative Government to grapple with these problems and to move, as resources allow, towards moulding the system to one which is more comprehensive and more coherent and less capricious.

There may be a case for a no-fault liability scheme for road accidents, but I fully share the disquiet expressed on Wednesday by the Minister for Social Security and by the Secretary of State today about the scheme proposed in the report. I ask again: is there not a case for looking more sympathetically than the report did at no-fault liability schemes based on insurance and the principles in force in many American States and in many other countries? Trying to meet the cost through insurance will tailor the scheme much more fairly for those who will pay the cost than merely slapping a penny on every gallon of petrol. I do not think that the latter suggestion finds much favour.

The right hon. Gentleman referred to the benefit for severely disabled children and I note that he was cautious and reserved his judgment completely. As the report shows, it would be fairly expensive and would presumably replace the Family Fund, which is bringing much valuable help, though on a selective basis, to a substantial number of families who have to care for severely disabled children.

One point on which the Solicitor-General may like to take advice before he replies is whether there is a case for raising the age limit for children for whom the Family Fund can make provision. At present, it stops at 16, but many of the greatest hardships that affect families with severely disabled children occur when the child moves out of the responsibility of the education authority and into the community and the responsibility of the DHSS. There may be a case for considering whether the age limit could be raised to 18. I have consulted Lewis Waddilove of the Joseph Rowntree Trust on this matter and he said that if the proposal were put forward the trustees would look at it sympathetically. I appreciate that if there were to be a general disablement scheme, perhaps this sort of system would play a much smaller part.

It is in the area of product liability that we have to exercise the greatest caution. "Strict liability" is a curious term. Lawyers may understand what they mean by it, but most people can be very confused about it. It may mean absolute liability, in the sense that some people would think that if a person is hurt he is automatically entitled to compensation, come what may. As the Secretary of State said, it is certainly not that. It may mean that all one needs to prove is cause and effect and not negligence. That would be the lawyers' understanding of the term. However, in some cases it merely means that the burden of proof is shifted from the plaintiff to the defendant and is a form of the doctrine res ipsa loquitur.

Recent developments in America have given British exporters great cause for concern and this is what underlies the anxieties felt by industry about the suggestion that it will be faced with such a system in this country. The CBI has put the concern in a pithy form and warned that the proposals in the Pearson report, which follow the EEC directive and our own Law Commission report, could lead to firms being faced with unlimited liability for unknowable defects". The CBI argues that that state of affairs would be commercially unacceptable and unjust. The Government must look at the proposal with extreme caution before moving down that road. Some industries claim that they are already fully subject to existing statutory safeguards of a very stringent kind and they question whether further constraints by way of a no-fault liability would serve any useful purpose. My hon. and learned Friend the Member for Southport will deal with all this at greater length later.

Mr. Boscawen

Does my right hon. Friend see some illogicality in not including medical injuries under strict liability, but including injuries from pharmaceutical drugs and so on?

Mr. Jenkin

There must indeed be an illogicality about that and I have the feeling that there lies behind it the thought that large anonymous drug companies can pay the bill and that there is no political opprobrium attached to that, but if strict liability were imposed on doctors and surgeons there would be a considerable row. This is a difficult area where great caution is needed.

There are 188 specific recommendations in the report. I do not intend to say more. I have touched on some of the most important recommendations. I have not found it easy to come to grips with a full, complex and diffuse report. The recommendations seem to be curiously isolated and unrelated to each other. I am sure that I am not alone in having felt over the past few days and months that I was wrestling with cotton wool. I have struggled with it as best I can and I shall listen with great interest and, no doubt, even greater admiration as the rest of the House has a go.

Several Hon. Members


Mr. Deputy Speaker

Order. Hon. Members have just heard that there are 188 recommendations in the report. In the interests of those who are anxious to take part in the debate, I appeal to hon. Members not to make wide-ranging speeches, but to concentrate on one or two specific aspects of the recommendations.

12.17 p.m.

Mr. Greville Janner (Leicester, West)

I shall certainly do as you ask, Mr. Deputy Speaker. I shall concentrate on product liability, but I should like to bring it into the general picture by following what the right hon. Member for Wan-stead and Woodford (Mr. Jenkin) said about the need for care and that the emphasis should be on care, not urgency.

I ask the House to say that the emphasis should be on care and urgency because there is so much in the report which is so important to so many people who are suffering so much. It would be a disaster if the report found its way into the lockers, cubby-holes and shelves where so many other reports have been left to wither and to die.

The reasons for urgency are many. The right hon. Member for Wanstead and Woodford said that the report has, in many respects, only moved the boundary lines. A small movement of boundary lines can cause an international war, and a minor movement of a boundary line in law may cause a complete upheaval. Such an upheaval is required in most of the areas covered by the Pearson report, and the House should not underestimate what will result from the implementation of many of those recommendations and the places towards which the boundary lines will move.

There is an awesome failure of the law to protect certain people at present. The failure is based partly on the inability of so many to go to law at all. The law in this country is fine for the wealthy and for those without much money, but over 60 per cent. of the population cannot afford the law, even if they are going to win their case. The problem is that the proof of a case, even a good one, is so expensive that most people cannot afford to win, let alone to lose.

It is a problem, of course, of legal aid but also one of proof of liability. That was the problem faced by the parents of the thalidomide children. Against the weight of the influence, power and wealth of the Distillers Company, the parents could not have easily proved that what went wrong was due to fault, and they would have had to prove that if they were to win their case. Had strict liability—liability without fault—been in force, they would not have been needed to prove fault.

At present, the producer of a product is liable in the law of tort—that is, the law that makes him liable to the "ultimate consumer" as opposed to the person with whom he has an immediate contract—only if fault can be proved against him. In the United States there already exists a system evolved through that country's common law of no-fault liability, and that is what is worrying manufacturers in this country. They fear that a similar system could emerge through the EEC or simply creep through in a way similar to that in which it has emerged in the United States.

I urge the House to say that this reform is much needed here because of the difficulties that people have in achieving justice on the basis of the law as it stands. Most of us in the House today are lawyers. A profound change is being proposed, and we in the law can recognise it. I suppose that we have an interest to declare. We are involved in the fighting of cases. I hope, however, that the Pearson proposals will lead to fewer, not more, cases.

Some of us may have an interest because we lecture or write, or because we have made a special study of this area. I certainly have an interest in that direction, but it is one founded in the passionate belief that the law as it stands is desperately wrong and that we must help people to prove their cases.

Secondly, there is urgency because the law, particularly in respect of road accidents, is a form of desperately dangerous Russian roulette. People have to prove what happened in the fraction of a second. They have to rely on their memories. A judge put it very well recently when he said that as time passes memory fades but recollection improves. We all have to try to reconstruct what happened in a moment of time when we are quite sure that we are right, but we are absolutely certain to be wrong.

That measure of desperate effort to prove the unprovable should go. It should be removed from as many areas of law as possible. That means road accidents, accidents at work, and certainly accidents caused to unfortunate people who suffer from defects in products.

There is also urgency because of the patchwork inadequacy of current arrangements to help the disabled. All of us in the House try to help disabled people. We try to get this or that allowance, and so many unfortunate citizens fall in between specified circumstances. One case arose recently in my constituency. The extraordinary arrangement exists whereby if someone is physically unable to move he gets a mobility allowance—and quite right; many of us have campaigned for that—but that, if he suffers from agoraphobia or some other desperately difficult illness which makes life a misery and he is terrified to go out of the house, he gets no help. In addition, people in the community do not usually recognise that such a person is ill.

We must bring a form of common sense and overall disability income into this area to try to remove as far as we can the uncertainties and inadequacies that exist.

Mr. Edward Lyons (Bradford, West)

Does not my hon. and learned Friend agree that the same ought to apply to the taxation of the benefits? At the moment, the mobility allowance is taxed and the attendance allowance is not. That is a further complication.

Mr. Janner

I fully agree with my hon. and learned Friend. That is why it is very difficult to pick out one area since each impinges upon the next. In dealing with product liability, we are also dealing with the law of contract. But that protects only those with whom we have a contractual relationship. The law of tort helps the" ultimate consumer", provided he can prove fault. And the law of crime is crucial because section 6 of the Health and Safety at Work etc. Act provides that such steps as are reasonably practicable should be taken to protect people who are affected by products sold for others to use at work. Finally there is employer's liability. We already have strict liability—it is not so revolutionary—in respect of damage caused by defective equipment, thanks to a recent Act.

Anyway, however slow we in this House might want to be, others will not allow us to be slow. I was sad at the reply by my right hon. Friend the Secretary of State to my question about the EEC. We cannot continue in this House totally to ignore what is happening in the rest of the world in general and in Europe in particular. There is already an EEC draft directive which has recommended, in the same way as our Law Commission and the Pearson Commission have recommended, the introduction of product liability. Once that becomes operative, our time for consultation is finished.

I think that I put a fair question to my right hon. Friend when I ask how long he expected the consultations to last. I also ask now whom he is consulting, what steps he has taken to seek advice and guidance from industry and the trade unions, and whether he has specifically laid down any time limit, or is he simply allowing the matter to drift? Is he inviting industry to concentrate on specific areas and topics, or is he merely hoping that the enthusiasts will bring in what they want when they want?

This issue is urgent because of the EEC. We do not have an indefinite amount of time. It is urgent, too, because our exporters to countries with product liability are running into immense problems already. I am told that some are moving out of the American market because they are asked to accept a form of responsibility which they cannot afford. In some cases the insurance premium is rising to 10 per cent. of the value of the goods sold, making the business not worth conducting.

People are even pulling out of parts of the United States sports market. Producers and sellers of items as interesting and as comparatively minor as trampolines suffer great problems once there is strict liability. We cannot escape a sense of urgency because already our industry is affected, as are those who have to survive with pain the results of what industry does wrong.

It has been said that the element of wrongdoing must remain in this area of law. So it will. Even when there is strict liability, it does not mean that the person who manufactures or produces the product will have a product liability. It is saying only that the person who suffers as a result of a defect in a product may say to those who put that product into circulation—that may be the manufacturer, the distributor or, occasionally, the retailer—"I look to you to compensate me".

Those who put the product into circulation may then seek indemnity from others, bringing them into a legal action. He who eventually pays ought to be the one who is ultimately at fault. Strict liability means that the ordinary consumer of the defective product will no longer be left in the impossible position of trying to prove liability with inadequate means, without enough money to pay for the law, with too much money to qualify for legal aid and without the scientific equipment that he may need. He will no longer be left roaming in a wilderness of law without the help that we ought to be providing for him.

It is said that we should not impose upon industry unlimited liability for unknowable defects. I submit that the defects which are unknown should be guarded against by those who create those risks. If they cannot know of the defects, they should insure against them. They should assume those duties, and this House should ensure that they do so as soon as possible.

12.28 p.m.

Sir David Renton (Huntingdonshire)

I agree with a great deal of what was said by the hon. and learned Member for Leicester, West (Mr. Janner) in an interesting speech. However, I hope that he will agree that morally the person at fault should be made to pay, whenever that can be done. That is when he can afford to do so and when he can easily be made to do so. That, surely, is where primary responsibility should lie. If I understand the speeches of my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) and the Secretary of State, that is where their thinking lies also.

It comes to this: social security, whether as part of a State insurance scheme or as a further drain upon the taxpayer, should be available as a source of compensation, but not the primary source. That is the emphasis upon which we in this House should agree.

Therefore, I disagree with recommendations 23 and 56 in the report, because they have the emphasis the wrong way round. Instead of deducting social security benefits when calculating damages and thereby reducing the primary liability of the person at fault, I believe that he should be made to pay the full compensation. When social security benefits have already been paid to cover past pecuniary loss, he should be made to reimburse the State by repaying to the social security fund the amounts in question.

I wish to say a few words about criminal injuries procedure because the present position is not satisfactory. The courts have power to make compensation orders against offenders in favour of victims. This, surely, should be the regular practice, and the payment of compensation should be given priority over the payment of fines when the offender has limited financial resources. The courts are not making as full use of their powers in this regard as they well might. The Criminal Injuries Compensation Board, which carries out most important work, instead of being regarded as a long-stop in this respect is now regarded as the principal source of compensation to the victims of crimes of violence.

I suggest that the criminal himself should be made to pay wherever possible, and in the first place. In most cases that would not mean much longer delay in compensating the victim than now happens. In the report, on page 330, paragraph 1578, we are told that a working party of officials is due to report on the working of the criminal injuries compensation scheme. I hope that in replying to the debate the Solicitor-General will tell the House a little more about the scheme.

I must offer an apology to the right hon. and learned Gentleman the Solicitor-General. In common with the hon. and learned Member for Montgomery (Mr. Hooson), I shall have to leave during the debate to get to my constituency. I must leave the House at about 3.15 this afternoon. I hope that the right hon. and learned Gentleman and the House will accept my apology, and that he can deal with that matter.

I wish to disclose that I am chairman of the National Society for Mentally Handicapped Children, which gave evidence four years ago to the Royal Commission. I wish to say a few words about the position of handicapped children in relation to the report. I must also disclose that I am the father of a daughter aged 23, who is severely handicapped mentally and physically.

One always welcomes any proposal for further help to the handicapped, and in recommendations 166 and 168 we see the proposal for a £4 allowance to every handicapped child. Presumably, that refers to mental as well as physical handicap, and it applies to children over the age of 2. If one follows the definitions in the report correctly, it appears that such an allowance would be payable until the age of 16 and, rather strangely sometimes in the case of the mentally handicapped, until the age of 19 if they are in receipt of regular education.

The Secretary of State for Social Services has reserved his position in that respect. Although it may appear to be contrary to the interests which I declare, I think that he was wise to reserve his position. I believe that this matter needs more clarification. Perhaps the sum of £18 million at 1977 prices, which this proposal would cost, could be better spent in increasing the scope of constant attendance and mobility allowance and in increasing the amount of education and training for the mentally handicapped.

I say this with some hesitation, because Government expenditure and taxation are much too high, and we should all like to see a great deal of progress in social security, health, education and other areas. But until we can increase production in the economy, which may mean a change of economic policy, we cannot do all the things that we would like to do. However, I believe that the mentally handicapped are regarded by the public as a very deserving cause which, when more money is available, should have a very high priority.

These proposals to which the right hon. Gentleman referred are separate from the main theme of the report. I refer to the proposals affecting children. They are separate because, generally speaking, no question of fault arises—certainly not easily attributable fault. But we should give careful consideration to the comments in recommendations 159 to 165, on page 385. It is almost an athletic exercise to handle the various parts of this report. I hope that it will assist the House if I say that in the copies available in the Vote Office this passage is to be found in part III, on page 385.

On this point the Royal Commission appears to have reached sensible conclusions, which I hope will be adopted in due course. The Commission says that a child born alive suffering from the effects of ante-natal injury caused by the fault of another person should continue to have a right of action for damages against that person", but feels that there should be no right of damages against either parent except in those circumstances—and they are very rare—in which the parent has failed to insure where insurance is compulsory. I believe that there should be no change in the provisions of the Congenital Disabilities (Civil Liability) Act 1976 relating to preconception injury, apart from the removal of the father as a potential defendant. I am sure that this is the common sense as well as the social justice of the matter. I believe that drug firms should be made to insure compulsorily. Parents should not be obliged to insure against fault, neglect or accident caused by others, and of course, a foetus cannot insure.

The newspapers in recent times have published stories of horrible and tragic cases involving assaults on mentally handicapped people and people suffering from mental illness in hospitals under the control of the Secretary of State for Social Services—and of course I attribute no blame to him personally. Judges have had very strong comments to make on this subject and have sent to prison nurses and others responsible for caring for these unfortunate people.

Money by way of compensation might not mean much to those who are injured in those tragic circumstances, but I suggest that those who cause the injuries should be made to pay the fullest possible compensation whenever they have the means to do so. The compensation might sometimes be in respect of the medical attention that has been given. The compensation might sometimes consist of making the injured person more comfortable with special apparatus, or whatever may be necessary. I believe that this is a matter about which all of us ought to feel very strongly.

In conclusion, I wish to make some very general comments. Massive legislation would be required to implement most of the report, and of course the question will arise on each of the matters within the subject whether we should wait until our European partners are ready to harmonise within the particular branch of the law, as has already been mentioned in relation to product liability. The EEC has already become deeply involved in harmonisation on that subject and I do not believe that the Government can sit on the fence indefinitely in those discussions taking place in Brussels and the European Parliament. I feel that the EEC directive tends to go too far, and may well be unworkable. At the same time, the Government have got to come to a view on the matter.

My hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) has been presenting very powerful, statesmanlike and well-considered arguments against the EEC directive as it stands now. I mention this because I believe that it is a matter that will have to engage the Government's attention. Leaving aside that matter, if the Government are going to legislate on any of the themes in this massive report—which is a great contribution to the study of the subject—and are going to wait before we legislate to see what the EEC is going to do about harmonisation, they may have to wait a very long time and they may not get the ultimate result that we all want. I put in that word of caution.

This is a somewhat nostalgic occasion for me because, looking around, I see that I am one of the few Members of the House who served on the Standing Committees on the National Insurance Act 1946 and the National Insurance (Industrial Injuries) Act of that year. In those days, what we were concerned about was the abolition of poverty; that is where the emphasis lay. The emphasis in the Pearson report is something quite different. It is the overcoming of hardship—not poverty—resulting from injury and death.

One day, perhaps in the next century—but it would be much too soon now—the philosophy may go beyond poverty, beyond hardship and into misfortune. But correcting misfortune is a very expensive thing. Alas, many of us suffer from different kinds of misfortune. But if everybody is going to be compensated by the State or by insurance, or as may be, for every kind of personal misfortune that arises, Parliament will never stop legislating and the taxpayer will never stop paying out.

12.43 p.m.

Mr. Emlyn Hooson (Montgomery)

When the right hon. and learned Member for Huntingdonshire (Sir D. Renton) was nostalgically referring to his duties on the Standing Committee on the Bills in 1946 and to poverty then being a great concern, I could not help reflecting that we are an evolutionary society and that things happen in that way. Many of the matters to which great importance was attached in 1946 now appear relatively unimportant.

I wish to follow the right hon. and learned Gentleman's argument on the criminal injuries compensation aspect and to refer briefly to recommendation 171 of the Pearson report, which suggests that there should be a statutory basis for compensation for criminal injuries. I hope that the whole House will warmly support that recommendation.

I suppose it is arguable that any criminal injury sustained is the result of the State's failing to maintain law and order, and that therefore the concept of fault might be a basis for compensation. I disagree with the right hon. and learned Gentleman to this extent. In most cases, it is impractical to levy compensation, as he knows perfectly well, from those who commit crimes. There are exceptional cases where this can be done, but it may be argued that the State has a duty to try to obtain compensation from the perpetrators of crime but be itself responsible for compensating the victim of crime.

Central to the consideration of the Pearson report was the great moral question whether compensation for disability should depend upon the concept of fault or the concept of need. The report has already been referred to as being rather diffuse. It is particularly diffuse in its statement on the relationship between those two concepts. I agree with the right hon. and learned Gentleman that the report is a very important contribution to the discussion on this subject and that, in so far as it is, it is clearly an important step. But the report is not a great landmark or watershed, as has been suggested in certain quarters, because of its lack of a radical approach.

There is an absence, in the report, of a consistent standpoint when viewing the question of compensation as it has historically developed, depending on the concept of fault and its relationship to the much later development, which can briefly be summarised in the idea of the welfare State, of compensation based on need. In his speech today, the Secretary of State was very disappointing in his treatment of the third head, which is the relationship between the concept of need and the concept of fault.

It appears to me that we are all, in a way, victims of our backgrounds. Although I have referred to the great moral issue that arises—it really is a great moral and philosophical issue—I am quite convinced that most arguments put forward, however dressed up, are really based on vested interest. My own profession has a vested interest—not necessarily financial, but a vested interest. It is intellectual and a part of the background, and we who have been engaged in litigation think that this is the best way of dealing with the matter. No doubt the Department of Health and Social Security has a vested interest in believing that its method of dealing with disability is the right kind of approach.

I am quite certain that the trade union movement has a tremendous vested interest in maintaining the idea of compensation based on fault. One of the great services which a trade union gives to its members is the legal service of following claims for damages, and so on. We would be foolish to underestimate the enormous vested interest behind this idea.

I want to make my own viewpoint absolutely clear. We are in the process of moving slowly but surely from compensation based upon the concept of fault towards compensation based upon need. It will be a slow process. It has been taking place over decades. That does not mean to say that the concept of fault will disappear—far from it. The idea of individual responsibility for one's actions, the idea that one owes it to oneself and to the community to maintain oneself in good health, to abide by safety rules at work, and so on, will always be with us. The idea that someone is blameworthy if an accident happens will also remain. However, the relationship between the two ideas will be different.

It is very difficult to argue, for example, that the needs of a child who has been disabled through the effect of an injection are any different from the needs of a child equally disabled because of some hereditary factor in one of the parents. The needs of the children may be exactly the same, yet in the one case there is no provision for compensation, and in the other case, depending on establishing a degree of fault, one can have damages ranging up to six figures. There is something inequitable in the idea that one child is not compensated at all.

We have to pay regard to the historical reasons for the development and extension of the law of negligence, in particular, to meet the needs of a fast developing industrial society in the nineteenth and twentieth centuries. The judges used their ingenuity to fill in a great gap in our social system. There were great judges, such as Lord Atkin. The case of the snail in the ginger beer bottle has already been referred to. The concept of negligence was so enlarged in that judgment as to bring within the ambit of the law, and the ambit of the law on compensation, many misfortunes sustained by people. In exactly the same way, if one reads some of the judgments of the great judge, Lord Wright, on housing legislation, one sees again the enlargement of the concept of the law of negligence, to make sure that there was no wrong that did not, so far as the judges could establish it, have a remedy. This was done in the absence of any other means of compensation.

Reference has been made to the nineteenth century legislation on compensation. We imported the idea of fault into early workmen's compensation cases. In this century we have seen the development of considerable changes. Then, legislation was being introduced to deal with a situation in which otherwise a man could sustain a great misfortune and have no kind of remedy, yet here we have reached a stage in the late twentieth century when those of us who practise the law often realise that whether or not people are compensated is an absolute lottery.

Two cases stand out in my own experience. In one of them I was a leader. I was appearing for the defendants, nationally known contractors, who had sunk a great shaft into a hillside for a hydro-electric system. They were almost at the end of the tunnel, at the joint, when a great piece of rock weighing three or four tons fell on to an Irish worker who was working below. He was totally disabled as a result of that.

I was very anxious to pay out for this unfortunate man, but I had to advise the insurance companies—this was a case involving reinsurers, as so often happens—that I thought that on our evidence we had a very good chance of winning. There was no question of contributory negligence. The sole question was whether the employers had been negligent.

This case occurred about 10 years ago. If the man had won, he would have received at least £40,000, in those days. The sum would be well over £100,000 now. The judge was anxious to find for him. Everyone was anxious to find for him except the insurers, who, perfectly properly, took the view that if there was no blame, why should they pay? I offered, at the most, £1,000. Counsel for the other side rightly refused it, hoping that something would come up in the course of the evidence. In the event, the man lost.

The other case was one in which I appeared for the National Coal Board, as a junior. The present Lord Chancellor led me. Again, I was appearing for the defendants. A man in a North Wales coal pit had volunteered to work under a tender roof, which had previously fallen. The manager of the mine had taken extreme precautions to make sure that there was no repetition of the fall. Three men—the best workers in the mine, so it was said—worked underneath the tender roof. There was a fall, and one man was killed. His widow fought for damages against the NCB, which refused to pay because there was no fault.

In those days, under the Coal Mines Act 1911—which is no longer in force—if it was not reasonably practicable to avoid a breach of statutory duty there was no liability. The man's widow had no compensation. Yet in both of the cases I have mentioned no one would argue that morally there was not an enormous case for giving both plaintiffs compensation.

I do not think that we ought to persist into the next century with our present system without greatly modifying it, at the very least. In so far as the Pearson report makes various recommendations about enlarging the social security system and, for example, compensation for people involved in road accidents without a degree of fault, I am prepared to accept all those recommendations. It is a pity that they should be dealt with piecemeal. I see the good sense of discussing what I call broadly the social security aspect of the Pearson report together with the recommendations of the DHSS working party at present, but I am prepared broadly to go along with all those recommendations.

With regard to the Pearson recommendations on damages and the view that there should be strict liability on those who produce products and put them on the market, and so on, in regard to anyone who is injured as a result of them, I am prepared to go along with those. Nevertheless, I regard these two sections of the Pearson report as being inadequate in themselves.

In this country we ought to know in which direction we are going. That is what is singularly lacking in the Pearson report. There is no clear guideline on the direction in which this country should be going. What was also totally lacking in the Secretary of State's speech today was a guideline on the relationship between the two ideas—of compensation based on need, which I very much favour, and the concept of fault entering into matters.

Of course, there are financial reasons why one cannot extend the social security system much at present. I am prepared to accept that. In the long term, however, we ought to pay attention to such statistics as appear in the Pearson report. For a social security payment of £1 there is an expenditure of 11p on administrative expenses. For every £100 paid by way of damages and compensation, the administrative expenses, including those of insurance companies, lawyers, consulting engineers and everyone else, amount to £85. The ratio is 85 to 100 in the latter case, but it is 11 to 100 in the former. This is not an insignificant factor.

In the long term—it will take a long time—we ought to move in the direction of the State paying compensation on a much more generous scale to all people who have suffered misfortune and who, in the light of the current views of the time, should be compensated.

The Secretary of State said that the situation ought not to govern the amount of compensation. But the situation does govern it. If the situation did not govern it, people who are unemployed would get exactly the same as those who are employed. There is no reason, if the situation is not there, why an old-age pensioner should not have the same level of pension as current earnings in industry. But the situation does govern these things, and we would be unrealistic not to appreciate that viewpoint.

Nevertheless, I think that the concept of fault will always be there. The real question that I have been considering is whether, in the long term—I mean the really long term—the onus should not be on the DHSS in some form or other to gain the compensation from the people who are responsible. In other words, everyone would still be insured, but instead of, say, £100,000 damages being given to a child who has sustained a very serious injury, that child should be provided with an adequate pension, and so on, for life by the DHSS, which should recover the money, if it is recoverable, from whoever is to blame.

I think that this will take a long time to develop. What I am sure of is that in the longer term it will be impossible to have these two systems, as it were, running alongside each other, with no real bridge between them. I am in favour of the suggestion put forward by Pearson that instead of a moiety of national insurance benefits going in damages the whole of them should, but I rather agree with the right hon. and learned Member for Huntingdonshire that compensation should be paid by the DHSS and that whoever is to blame should reimburse the DHSS for the whole of the amount paid out. It is important to ensure that the element of lottery disappears.

I agree that there are difficulties. For example, if one has compensation on a no-fault basis for drivers, what does one do with the drunken driver? What does one do with the person who inflicts an injury on himself? I have certainly known cases where it has been strongly suggested that the injury was self-inflicted. There are beliefs that certain accidents on the road have an element of deliberation about them. Great issues are raised if there is to be compensation without any question, and I think that the issues raised in the Pearson report are of great importance to this country.

This has moved the boundary almost imperceptibly in a certain direction. But what is necessary is to have far more debates in this House on the way in which we shall compensate people in the future. I believe that we shall move in the direc- tion that I have indicated, although it will take a long time.

One real query that I have about the findings of the Pearson report is that the Pearson Commission suggested that its recommendations would cost very little. It suggested that the costing would be extremely attractive in relation to our present way of doing things, as it were, without any major radical change at all. I am extremely sceptical about the costings in the Pearson report. In practice I suggest that it would cost very much more than outlined in that report.

1.4 p.m.

Mr. Jack Ashley (Stoke-on-Trent, South)

I hope the House will forgive me for not being here earlier for some of the proceedings, but I have just returned from abroad and I was particularly anxious to speak in this debate. However, I shall make a brief contribution since I was unable to be here for some of the earlier speeches.

I regard the Pearson Commission report as narrow, inadequate, contradictory and possibly damaging to the prospects of disabled people. I know that it is a well-meaning report and that there are some good things in it. Nevertheless, I want to go on record with a very clear and strong criticism of this report on the basis that I have just mentioned. The Commission's scope was far too narow, as were its terms of reference. The report deals only with people who are disabled by accidents and deals only with half of those people who are subject to accidents. For example, it does not deal with those who are accidentally disabled in the home. Therefore, Pearson deals with a very small minority of disabled people. I think that we should recognise that fact very clearly when discussing the problems.

The question is, why was Pearson set up in the first place? It was because of concern over the workings of the tort system. There was great public concern about this and about those who were damaged but whom tort does not help. The whole question of tort is central to the Pearson report. I know that a number of hon. and learned Members have spoken about it. Personally, I want tort to be rejected. I want it to wither away. I do not see it being ended instantly, just like that, but I want it to wither away and to see an alternative system put in its place. I shall explain my objections in a moment to my legal friends.

However, I want to look at the question of special categories, because Pearson was set up after thalidomide, primarily because of tort, but also partly to look at special groups of people. The thalidomide children were a special group. The other special group who have been mentioned in the debate, and whom the House has been concerned with, are vaccine-damaged children.

As I understood him, the hon. and learned Member for Montgomery (Mr. Hooson) indicated that vaccine-damaged children should not have been given the money they were given, basically because of the concepts. I think his expression was "Not on the basis of need".

Mr. Hooson

indicated dissent.

Mr. Ashley

Does the hon. and learned Gentleman want to intervene?

Mr. Hooson

I am grateful to the hon. Gentleman. He has obviously misunderstood me. With the law as it is at the present time, of course those children should have that compensation. What I say is that their need is no greater than that of a child who has been born with a disability as a result of some other condition.

Mr. Ashley

I thank the hon. and learned Gentleman for explaining his point at greater length. My point is that this is not a question of need. I endorse the principle that we should have regard to the question of need and I shall develop that theme in a moment. But it is not a question of whether vaccine-damaged children need more money. The question is whether children should be asked by the State to take a risk—and those children were asked by the State to take a risk—and be vaccinated in the interests of the community. If the State asks children to take that risk, it is my contention that they should be given a special compensation by the State. They are, therefore, in a very special category. That is why I reject the hon. and learned Gentleman's arguments with regard to this particular case, although I accept his general premise that we should consider the question of need.

However, I have now mentioned two special categories—thalidomide children and vaccine-damaged children. The thalidomide children received what is generally regarded as adequate financial compensation although, of course, they could never be compensated adequately for that kind of disability.

I emphasise the point to the Secretary of State that although some members of the press have made out that the £10,000 compensation for vaccine-damaged children is generous, I want it clearly understood that a number of Members on both sides of the House regard that £10,000 as purely a preliminary and interim payment because these children in this very special category are damaged for life and £10,000 will go nowhere.

I do not want to commit the Secretary of State in his absence, but it is my understanding that he will consider further compensation for vaccine-damaged children and that a proper and adequate scheme will be drawn up for them. I remind the Secretary of State that the parents and some Members of the House of Commons will be coming to see him shortly in his office at the Elephant and Castle, or behind the Speaker's Chair, to find out what kind of total scheme he proposes for vaccine-damaged children.

I move on to the broader and more general problems posed by the Pearson Commission. When people criticise the selection of special categories—and many people do—what they do not recognise is that those Members on all sides of the House who have campaigned for special categories are also active for all disabled people all the time. We meet disabled people every day in the House of Commons and outside.

The special categories dramatise the plight of disabled people, and in a very real sense thalidomide and vaccine-damaged children were the catalysts for action to deal with the problems of all disabled people. They drew public attention to the basic and fundamental problems. Therefore, I make no apologies for fighting for the special categories.

I turn to the question of tort. I should like to see tort phased out and a proper system brought in. Tort helps only a minority, and of the 3 million people involved in accidents only 200,000 get tort compensation. Very few of them get more than £500. The overwhelming majority get very low payments. Tort helps no one with disease. In fact, Pearson helps no one with disease. Tort helps only a very small minority and its administrative cost is appalling. It is one of the most expensive administrative systems ever devised by man.

My hon. Friend the Member for Mitcham and Morden (Mr. Douglas-Mann) has done valuable work on this question. His contribution has been one of major importance in relation to tort. If he catches your eye, Mr. Deputy Speaker, he will deal with this question in more detail. He is one of the distinguished lawyers in the House. I do not propose to attack lawyers en bloc. To do so is very silly, because many of my very good hon. Friends are lawyers. But lawyers benefit from tort to an excessive extent. We have the ludicrous situation in which the costs of tort to lawyers are greater than the receipts of the disabled people. Who can justify that kind of crazy, topsy-turvy scheme? I understand that it costs £150 million in legal fees to distribute about £141 million. These are some of the kinds of figures that are mentioned in Pearson and by other authorities.

Mr. Ian Percival (Southport)

I ask the hon. Member for Stoke-on-Trent, South (Mr. Ashley) to check his figures. I think that he has made a mistake.

Mr. Ashley

I invite the hon. and learned Member for Southport (Mr. Percival) to check the figures for any year. It is indisputable that lawyers receive a disproportionate amount of money and I stand by my facts that lawyers get more than those who are receiving the benefits.

Mr. Douglas-Mann

According to Pearson, the benefits paid out were £202 million and the administrative costs were £175 million.

Mr. Ashley

Conservative Members may dispute these facts, but facts are facts and no one can alter them. And we should be quite clear about this question of tort. We must get rid of the system and try to bring in a viable alternative. I go along with Pearscon when he mentions the no-fault liability system. I am in favour of that.

This is the real issue. We must find a balance. Should we accept the proposition put forward by Pearson that we should give a special benefit to road accident victims, which will be a starting point on which we can build a better system? That is one alternative. The other is to say that we must riot do this because it creates yet another elite category of disabled people. We already have one elite group of disabled people—those who are industrially injured. It is outrageous that some severely disabled people should receive only about half as much as those who are industrially injured.

I pay tribute to the trade unions for fighting for the industrial injuries scheme and I commend their very valuable work. Nevertheless, no trade unionist can justify the difference between the compensation for industrial injury and that for those people who were not industrially injured—those who are sick. This is a common basis on which we should build, and we cannot do that with Pearson.

I believe that if we accept Pearson's proposals for giving special help to those injured in road accidents, instead of that being a basis on which to build it would be an alternative and we would be further away than ever from a proper scheme.

If one wants any evidence of this one just needs to look at history. It was suggested by some trade unionists that if industrially injured people got more other people would follow. But that has not happened. We have this grave injustice of some people receiving far more, and those at the lower level are not catching up. We would perpetuate an injustice if we pursued the Pearson scheme for compensating all road accident victims. Therefore I suggest that the House should reject that proposal.

What we really want is a no-fault liability system for all people. I said that Pearson was contradictory. He suggested that all children should be compensated. But why only children? Why not all adults? Why differentiate between children and adults? I suggest that we should have a comprehensive disability income based on the severity of the disability. I believe that that is the basis on which we should build.

The Government have done a great deal for disabled people, and I also pay tribute to my hon. Friend the Under-Secretary of State who is the Minister with responsibility for the disabled. Nevertheless, I do not think that we should assume that the Treasury is giving anything like adequate funds for disabled people. I totally reject the argument that we should freeze the existing inequalities—the inequalities between disabled people generally and those with decent incomes—because of the economic crisis.

We must have a comprehensive disability income and the Government—the Treasury in particular—must pay for it. The sooner they accept that principle and put forward the money, the better. I hope, therefore, that the Government, instead of accepting Pearson, will now begin to initiate a comprehensive disability income.

1.22 p.m.

Mr. Michael Grylls (Surrey, North-West)

Following the hon. Member for Stoke-on-Trent, South (Mr. Ashley) down the road of product liability, I want to look at the matter for a moment from the industrialists' side. Those of us on both sides of the House who meet business men regularly know how at present they are overburdened by legislation and regulation. If for no other reason, I view any potential change in product liability with coolness and no great enthusiasm, certainly from that point of view.

I am not one of those who think that our consumers are, on the whole, downtrodden by wicked or inefficient manufacturers. I think that we have fine industries, which do their job very well. I think that sometimes politicians and consumers, in our well-intended desire to protect the individual, fail to weigh up the effect of blunting competition and the natural instinct of a business man and entrepreneur to promote his goods in various ways. I do not want personally to push the consumer angle too far.

I disagree slightly with the hon. and learned Member for Mongomery (Mr. Hooson), who said that Pearson did not contain much that was radical. The proposed change to strict liability is a radical move and one about which we should all think carefully. Nevertheless, there is a case for amending the law in this direction and tilting the balance just a little bit more in favour of the consumer when either he or his property is damaged by a defective product.

There was rough justice in the proposition put earlier in the debate, that when a company produces a successful product it gets great credit and frequently a great deal of fame and probably a great deal of profit—that is right, and we accept it—but, equally, if a company produces a dud product natural justice dictates that it shall bear the responsibility for the damage that that product does, certainly if it does damage to persons.

The following comment in the House of Lords case that has been referred to shows the attitude of Lord Atkin who started the way in this in 1932. It concerned the effect on this poor woman in the famous snail-in-the-bottle case. He said: Her friend was then proceeding to pour the remainder of the contents of a bottle into the tumbler when a snail, which was in a state of decomposition, floated out of the bottle, and that as a result of the nauseating sight of a snail in such circumstances and in consequence of the impurities in the ginger beer she had already consumed, the appellant suffered from shock and severe gastro-enteritis. Perhaps I should not be saying this during the lunch hour, but at least it shows that in that instance Lord Atkin, as long ago as 1932, took the consumer view and thought that the lady should have a redress on the basis of tort.

Mr. Patrick Jenkin

I do not want to interrupt the flow of my hon. Friend's argument, but many years ago, when I was at the Bar, there was a very strong tradition that when the case was remitted to the Court of Session in Scotland it found that in fact there never was a snail.

Mr. Grylls

If that is the case it shows the acute risk for a non-lawyer speaking in a debate dominated by lawyers. I shall remember that in future and be a little more careful. The point is that it shows the attitude taken by their Lordships even if, at the end of the day, it was shot down through the legal process.

Now it is suggested that we should take a further step and say that negligence is not enough. That would be a big step to take. The cases in the United States cause great alarm amongst industrialists, and, indeed, amongst consumers because at the end of the day they will have to pay. But in Britain we have a chance, since we are part of Europe, because there are these two proposals in Europe, a Council of Europe suggestion of a convention and an EEC directive, and perhaps the possibility of a United Kingdom initiative.

So we have that way to look, and it is disappointing that the Secretary of State did not give an indication of what is to happen. He will have to give a reaction at some stage fairly soon, at least to the EEC directive, even if he is not going to give a firm reaction today to the Pearson proposal. The Government have to decide which way to go—either to the European or to our own legislation.

It would be wise to remember that some European countries have already effectively abandoned the principle of fault liability. France has done it; Italy has refused to do it; to some extent, Germany has moved forward with a special fund for pharmaceutical companies, financed by the companies themselves through insurance-type premiums. The leaning in Europe appears to be towards accepting a move away from the pure fault or tort-type proceedings.

We have to accept that, and look at the EEC directive. If we are to get the balance with America right, because of intercontinental trade, there are strong arguments for all the industrialised countries, if possible, moving together in the same direction. I do not think that in this instance, in the long run—although it would be tempting—it would be sensible for Britain to go it alone. It is tempting, because I suspect that we might be able to get the thing more right than the EEC directive.

How shall industry deal with claims if such a change takes place? That is something that we must consider. For example, should we assume that industry would merely insure itself for strict liability? We have seen that the cost of that would be likely to be very high, certainly if the American experience is anything to go by. The alternative, stated by Pearson and the Law Commission, is for compensation by a social security-type fund. I am not much in favour of that type of solution. It seems to me to be the easy, collectivist solution. I say this not for any doctrinaire reasons but simply because I do not think that it is very sensible.

I believe that if there is a sensible move towards strict product liability it will gradually drive companies in the right direction, which is to strive for higher safety standards, higher quality of products, and better quality control. We should be glad about that.

There are two dangers about the compensation fund. If it were financed wholly by taxation we should have the ridiculous situation in which the efficient companies, taking great care of their products and achieving the highest standards, would be financing through the pool the fly-by-nights that made the mistakes and created the dud products. That would not be sensible.

Whichever way we do it, if we move towards strict product liability—that appears to be the way of the industrialised world, and we should be wise to accept it—we must carefully analyse the costs. We may glibly say that industry will pay, but in the end it is the consumer who will pay. Ironically, the person for whom the legislation is designed to help will pay the cost in the end.

The extra burden on companies in the United States, because that country went so far with strict product liability, is an example for us all. It is a great help to us that we are not first in this move. Let us learn the lesson from what has happened in the United States and move forward with much greater care and much more consideration, because the United States is beginning to withdraw from its present position.

When the legislation is framed, Parliament must carefully weigh up what the definition of "defect" should be. Here I make a plea for the innovators and inventors. If this legislation goes through, or the European directive goes through, and we get the definition wrong, as I think the present EEC directive does, there will be a danger that innovation, invention and research in research-conscious industries such as the pharmaceutical and aircraft industries will be stifled. That would be suicidal.

I very much hope that from now on hon. Members will carefully consider the effect on the innovators, because it is so important. I was glad that in his report Lord Pearson paid special attention to the fact that the innovators often come from the small firms. The innovator can even be one man with a bright idea who sets himself up in a back garage. That is the sort of thing that we want to encourage if it leads to new products that are in the interests of the whole country. Let us have that thought at the front of our minds when we consider what the proper definition should be.

What defences should a manufacturer be allowed? I agree that one defence should be that he has produced a product to a recognised standard or specification and that when the product was introduced into the market it accorded with the up-to-date technical knowledge and appropriate safety standards at that time. That has been described in the all-embracing phrase "state of the art".

A manufacturer may produce a new drug or a component for a new aircraft, or make an advance in boat-building. If that were tested and found to be right according to the technology in 1978 but then, because of new technology introduced five or 10 years later, there was discovered to be something in it that was at fault, it would be tough if responsibility were pinned on the manufacturer. It would have the effect that I have mentioned of stifling innovation.

The other aspect concerns Government-approved products. My right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) rightly mentioned the committee on safety of medicines, which approves drugs in this country. We have the Civil Aviation Authority for the aircraft industry. There are Government-approved bodies that examine a product and say that it is perfectly all right. If it is subsequently found to be defective, what is to happen? Pearson said "That is too bad. That is the manufacturer's fault." I am not sure that we should be wise to take exactly that view. If strict liability is introduced, there must be special provision for the high-technology products, particularly those that have been approved by a Government organisation.

Whatever we do in a move towards strict liability, there will be an economic effect, which at the end of the day will be felt by the consumer. The consumer in industry is the employee; the employee is the consumer. They are one and the same person. Therefore, if legislation is to be prepared let us carefully consider, in the months ahead, what the cost will be. We must recognise that we are here to protect the consumer and the employee. Before we charge head-long into accepting this admittedly persuasive and perhaps necessary idea, we must carefully consider the economic effects, perhaps at the head of our list.

1.36 p.m.

Mr. Leo Abse (Pontypool)

As the Front Bench speakers have been followed by Back Bench speakers, it has become increasingly clear that the times are changing and that the notion that after years of private meditation a Royal Commission can come down from Horeb with tablets of law, which the nation then reads as hallowed holy writ, is a dangerous illusion. In these days it is clear that opinions need to be canvassed openly, not only by way of private submissions of evidence but in the way in which they are regularly canvassed by the Law Commissions, as they did, for example, before producing the basis for the Congenital Disabilities (Civil Liability) Bill, and as did the Wynn committee.

Inevitably, the group interests of which the Liberal spokesman, the hon. and learned Member for Montgomery (Mr. Hooson) spoke—they are not group interests in any sense of being malevolent vested interests; on the contrary, they may be benign—in these days need to be wooed and cajoled if consensus within our plural and opinionated society is to be achieved.

Those who were present during the debates on the Congenital Disabilities (Civil Liability) Bill will recall that I spoke of the correspondence that I had had with Lord Pearson, in which I had put a view shared widely by many professions, that it was important that working papers should be produced and that there should be consultation as the Royal Commission was working. As we see today, the folly of the stubborn refusal to do so, despite those representations, has resulted in the production of a report replete with minority and majority recommendations and, for all its many sensible suggestions, containing certain major blunders. Major assaults have been made on important sections of public opinion, as is clear from the responses today.

Much of that could have been avoided. An attempt could have been made to bring before us a report on which a broader consensus would have resulted if only the Royal Commission had not adopted an old-fashioned, authoritarian attitude in its procedure.

In accordance with your admonition, Mr. Deputy Speaker, to confine ourselves to particular recommendations, I want to concentrate in particular on recommendations that impinge upon the present position of the trade unions which, as they grasp the full significance of the recommendations, will regard many of the proposed changes as intolerable. The rumblings at the conference this week where Lord Pearson belatedly addressed some of the trade unions indicate that there is already a backlash against the report. I believe, for example, that the trade unions would not accept the idea that there should be a serious diminution of the rights which they have gained for members who suffer injury or death at work. In my judgment they would be somnolent unions if they were prepared to acquiesce in some of the proposals before us.

The hon. and learned Member for Montgomery referred faintly, almost pejoratively, to the role of the trade unions in relation to the protection which they have traditionally given their members. However, the House should remember that it was largely due to trade union influence that during the period in office of the 1945 Labour Government we had the changes which radically amended the doctrine of contributory negligence and abolished the doctrine of common employment, all of which doctrines so seriously handicapped injured workmen's rights to obtain damages. It is, too, the pressure of the trade union movement which has made impositions in so many laws that have resulted in the facility for an injured man, through his trade union, to be able to make a claim for a breach of statutory obligations.

I am sure that the trade unions, as is indicated already from the conference on Wednesday, will find it an extraordinary suggestion that no compensation should be given for pain and suffering during the first three months after an injury caused to a worker by a negligent employer, coupled with a proposal that all social security benefits should be offset against the work- man's total claim for damages. It would mean that the victim, despite his suffering, in effect frequently would be left with no claim at all. Indeed, that seems to be the intention of the recommendation. No doubt it is administratively untidy to have so many claims, and no doubt the insurance companies will give figures showing the high administrative costs to them of dealing with claims, but for many reasons the trade unions will find this thesis unacceptable.

My experience, acting professionally—to that extent I must declare an interest—in cases of accidents in the steel industry in Ebbw Vale and in other South Wales industries reveals that a very high proportion of accidents upon which claims can be founded are ones in which the injured men, happily, return to work within three months. The relationship of the unions to their members is founded not only upon making pay demands, and we wish them to continue to extend, not restrict, their interests. The unions will undoubtedly feel that they cannot condone the individual sense of injustice which brings with it a contempt for inadequate law if it is found that a man who suffered injury and got back to work within three months was deprived of compensation.

It would also mean, inevitably, a lack of the feedback which now goes on between workers and the unions. The unions become alerted to what preventive action should be taking place when there is a multitude of small accidents. I should regret it very much if that feedback ended and there was any diminution in the role of the trade unions to act as invigilators in safety at work.

In my view, the trade unions will not be appeased by any marginal increase in social benefits. They will not fail to see that this burial ground of the tortious rights of their members is to be the financial foundation upon which much of the Royal Commission's proposals are to stand.

As a French philosopher once said, it is easy to bear the pain of others. The Royal Commission is too dismissive of the fact that the length of time which pain and suffering last is an unsatisfactory index of its gravity. It cannot be dismissed as trivial because it lasts less than three months. I am sure that there will be a strong reaction if any attempt is made to put into effect such an inept suggestion.

Is it seriously believed, too, that any trade union worth its salt would accept the ceiling imposed on damages which is suggested in the report? For many years, damages in Britain were totally out of line with those in other Western countries. After pressure and protest a more realistic review gradually has been obtained, but few in the trade union world regard present awards as extravagant. If an employee, through an employer's negligence, has, for example, broken his back at work, is left a paraplegic and has to suffer a long living death, and the unions are told that lie is to receive a maximum of five times the average annual income less, in defiance of the compromise and concord reached between the unions and the Labour Government of 1945, all his social benefits, and not half of them up to a maximum of five years as at present, they are bound, once they appreciate the position, to give a dusty answer to the proposition.

Again, the recommendations relating to periodic payments will be wholly unacceptable to the unions, I have no doubt. The minority opinion, including that of Lord Cameron, was unable to accept the view that there are sufficient reasons for making such radical changes, for depriving plaintiffs of existing and long standing rights and for imposing a system of compensation which will in our view he cumbrous in operation, extravagant in administration and inimical to the rapid and just settlement of claims. That strong language coming from within the Royal Commission would be temperance itself in comparison with the response of an informed trade union.

Is it seriously believed that with the end of final lump sum settlements, as is proposed in the report, the unions will concur in a scheme which I suggest will make a man a prisoner of his employing company or its insurers or, as Lord Cameron said, will convert the injured man into a permanent pensioner of the employer?

Would a case ever end if periodic reviews in the form of these periodic payments were to be initiated? Obviously the insurers would come back again and again. Is the union never to close its file? Must it continue the battle every few years as the insurers seek to reduce the payments? Naturally, the union would be bound to defend its member with a fresh round of medical opinions and clashing lawyers.

After the traumatic experience of injury and the anxieties of a prolonged wait for settlement, the injured man wants to feel that the chapter is closed. Those of us with the clinical, legal experience of dealing with these cases know how often the injured man or woman begins to improve and look forward to some recovery once the case is over. To assign the duty to a solicitor or trade union to tell the injured man that the future holds only financial uncertainty is quite unacceptable to both the unions and the solicitors' profession and would be an act of cruelty to a disabled man.

The majority of the Royal Commission putting forward this proposition seem to hold the view that the working man is not to be trusted with money and that he will fritter away lump sum damages and ultimately live on social security—doubtless meantime keeping coal in his bath. Where is the evidence for such a belief? It is contrary to all my experience and, I believe, to that of the overwhelming majority of us who have to handle these cases. It is very rare for this type of squandering to occur. Often I look with respect at the marvellous husbandry exercised by a family when one of its members has suffered injury. I am sure that with the guidance of trade unions, lawyers and bank managers, there is very little frittering away, especially when it comes to any large payments.

I am further certain that the unions will not accept the complicated scheme for the calculation of damages for future pecuniary loss. Have we not enough travail in industry with the vexed problems of differentials without projecting those problems into the calculations of judges? Perhaps if there had been more outside consultation such a droll consequence would not have occurred as it has with one of the most important tasks given to the Royal Commission. So knitted up are they that we have two conflicting recommendations on the issue of future pecuniary damages, and the one involving the embattled minority includes the chairman himself.

The majority recommendation will be fought by the trade unions, not least upon arguments which the chairman and others advanced in paragraph 722 in which they state: we think the method is wrong in principle, because it gives to the very high earner a lump sum of damages having a real value several or many times greater than the total of the future real values which he will be losing over the relevant period. Consequently a very high earner would receive an extravagant award. There might exceptonally be an award of as much as £½million (at present values). We feel that such an award would be excessive and unreasonable. Also there would be an excessive disproportion between the lump sum awards to low earners and the lump sum awards to high earners. Some disproportion is inevitable when social security payments are taken into account as compensation, and leave uncompensated a greater part of a high income than of a low income. But the method greatly enhances the disproportion. I do not believe that any trade union when it examines this suggestion will tolerate it. Unhappily, there are blemishes in the method of both the minority and majority schemes.

Is it, again, seriously expected that a union will allow the widow of one of its members who is killed in an industrial accident to be placed in the position suggested by the Royal Commission? Is it understood that it would mean that a widow who works part-time—as so many do today—whose degree of dependence on her husband is only partial, could be granted a nil award, after all social benefits had been deducted, under the Royal Commission's recommendation? This is an impossible and intolerable position. I am sure that not only trade unions but the women's lobby will not tolerate it once they appreciate the law's dusty response to the desolation of widowhood. Indeed, the Royal Commission has a droll attitude towards widows in general.

We had many battles in the House when the late Arthur Probert and I introduced the Law Reform (Miscellaneous Provisions) Bill which abolished the appalling rule that a woman had to be assessed in the witness box on her marriage prospects. We abolished that rule. I am astonished that the Royal Commission is so out of touch with prevailing public opinion that it now intends by the back door to bring that rule back. The Commission suggests that when a widow marries before a case comes to court she must have her new position assessed. A widow is, in effect, asked to live in sin. This is an issue which the Royal Commission would be well advised to leave alone.

So old-fashioned and quaint are some of its ideas that it suggests that the periodic payments which it proposes should be given instead of a lump payment to a widow should be extinguished should she remarry at any stage. The Commission is endeavouring to thwart the will of Parliament—which expressed itself in clear terms—by attempting to get at the widow in this way.

The Commission also makes the peculiar suggestion that when the periodic payments are extinguished the widow, forsooth, should be awarded a dowry. I do not know what the women's lib movement would say to the suggestion that a dowry is to be introduced into contemporary life and that a dowry should be paid in order to buy off periodic payments.

The Royal Commission shows how out of touch it is with public opinion when it makes such suggestions. It reveals how it has failed because of the lack of consultation while it was doing its work.

There are good features within the report. I do not gainsay that. Unhappily, they have become enmeshed in so many bad features that the good features could be overlooked. I hope that the Government will consider the sensible idea that there should be a loss of society award instead of the derisory award that is given for the loss of expectation of life in respect of a child that is killed. I hope that that suggestion will be implemented speedily.

I hope that the Government will examine the possibility of abolishing the notion of contributory negligence as a defence in cases of children under the age of 12 who are killed or injured. I welcome—and I am sure the people of Wales will agree—that in the case of occupational diseases, as a result of the suggested review, one will not, I hope, have to prove that a disease is scheduled before compensation is attracted. In Wales we have the problem of quarry workers' cases awaiting resolution and I hope that the Government's reference to the appropriate advisory council will lead to their receiving aid. Many workers suffer from the so-called vibration syndrome in our factories too and in my constituency in Cwmbran they are at present without compensation. That the matter is to be re-examined will be welcomed, and I hope it will be treated with some urgency.

I hope that the Solicitor-General will give some added weight to those assurances that have been given by the Secretary of State to the trade unions, which are disturbed by some of the issues that I have raised. The diffidence and scepticism towards many of the proposals expressed by the Secretary of State will be welcomed. I hope that that will be underlined by the Solicitor-General. It would be unfortunate if a Labour Government, who have so proudly worked over the years with the unions to improve the rights of injured men and the widows of men who have been killed at work, were to encourage recommendations which could erode the rights for which we have all fought. Those rights would not be lost without a severe struggle, whichever Government attempted to erode them.

Mr. Deputy Speaker

I remind the House that the winding-up speeches are due to begin at 3 o'clock. I make a final appeal for brevity.

1.59 p.m.

Mr. Patrick Mayhew (Royal Tunbridge Wells)

I have the unusual experience of being able to agree with some of the points that the hon. Member for Pontypool (Mr. Abse) made so fluently. I agree that the proposal for a three-month duration threshold in terms of the consequences of injury before a victim of injury shall be entitled to recover damages is wrong, for the reasons mentioned by the hon. Member. It would have an adverse effect upon the ability of victims of injury to recover and it would put a disadvantage upon those who did their best to get back to work.

I also agree with the hon. Member's condemnation of the proposal that there should be a statutory limit to the amount of compensation that can be awarded in respect of injury.

I criticise the vehemence with which the hon. Member dealt with the proposal for periodic payments. On balance I am also against the proposal that damages should be awarded through periodic payments. But the hon. Member did less than justice to the majority of the Commission which made that proposal. That part of his speech suffered from unnecessary vehemence.

The remarks that the hon. Member addressed to the position of widows did not do justice to the argument on the other side, which is that the proportion of a widow's compensation relevant to what we are talking about is based upon the loss of support that she has suffered by reason of her widowhood. If that support has been replaced by subsequent marriage, for example, there is plainly a powerful argument for a reduction in the damages that would have been payable had that widowhood continued. That is the other side of the argument and I feel that the hon. Gentleman did not do justice to it.

I am sorry that the hon. Member for Stoke-on-Trent, South (Mr. Ashley), who takes such an interest in these matters, is not in the Chamber, because I agree with something that he said, but in other respects I disagree. It is very important that we should take the point that he mentioned, that the terms of reference of this Royal Commission are highly relevant.

I have been saddened in the course of this debate to hear the condemnation expressed by many of those who have spoken of the diffuse nature of the report and the lack, it is said, of any thread of principle running through its recommendations. I believe that if one looks at the terms of reference one sees why that is, to some extent, true. I believe that the Royal Commission, which has laboured for five years, has produced a report of monumental thoroughness and great assiduity, illuminated by a vast amount of research. In its concluding paragraphs, the Commission acknowledges that it has not—its terms of reference ensured that it could not—put forward a comprehensive philosophy which would inform the response of society to physical misfortune among its members in the form of injuries, however sustained.

We owe it to the distinguished chairman and members of this Commission to bear in mind what they say in almost their concluding paragraph, No. 1719: We have tried to deal with some of the most urgent problems which relate to compensation for death and personal injuries; and to provide a vantage point from which a number of possible routes into the future could be mapped out. But it began the paragraph by saying that speculation about the future takes us well beyond our terms of reference. That is a very important point, which ought, in fairness, to be made.

I believe that even if we were to implement every one of the Commission's 188 recommendations we should still be left with a system that distinguished between injuries sustained at home, perhaps almost a third of the total, and those sustained at work or on the roads. There are further categories still, although on a smaller scale, which would be dealt with differently. The fault for that is not that of the Royal Commission. The terms of reference expressly excluded injuries at home. They instructed the Royal Commission to chart a rather precise course through a variety of categories of injury.

The Commission conceded that it has not removed anomalies. It has simply moved the boundary lines. I think that is correct. In so doing, it has improved the map considerably. It has redressed some frontier grievances between the system of tort and the system of social security, but the conclusion of all its prodigious work still leaves us in this position: that it remains for us here in Parliament to work out whether we wish to continue with a piecemeal and arbitrary approach to compensation for physical injury or whether we prefer to determine upon a guiding principle and then let it guide us in the question of the way in which we should compensate those who suffer misfortune in the form of physical injury.

So often, we take the pressure off ourselves when in Government by appointing a Royal Commission or an inquiry, taking care to see that we limit its field of operation in a manner that suits us at the time. Then we criticise it for having, in its report, sedulously kept to the grounds that we have marked out for it. If we are honest with ourselves when we voice our disappointment, as well as make the criticisms of the narrow field that this report covers, it seems to me that we must acknowledge that there is very little prospect, in what people are somewhat arrogantly pleased to call the foreseeable future, of sufficient resources existing to make possible an acceptable system of compensation that would be unanimously applicable to all injuries, however caused.

I therefore think that the terms of reference of the Pearson Commission were justified. We do ourselves a great disservice if we tell ourselves that we must dismiss any scheme that may pick out this category or that for improved treatment in the future because we cannot apply to everbody the standards that it is proposed should apply to some.

It has been said in this debate that we already have one elite class, namely those who benefit from the industrial injuries scheme. That is quite true. It does not matter what reason lies behind the selection of those who are injured at work for special compensation. It is there.

What Lord Pearson and his colleagues seem to have said is: "We look at the areas on which we may not venture. We notice that one class has already been singled out—those injured at work. We look at the whole field of injuries. We notice that next to those who are injured at work come, in numerical strength, those who are injured on the roads. We notice, of course, that there are other much smaller categories, and we make various recommendations for them", most of which have been noted with approval in this debate.

As I understand it, the Commission is saying: "We think that there should be changes in the status of those who are injured on the roads at least to bring them up to the level of benefit they would have received had they suffered identical injuries while at work". I do not believe that it is a fair criticism of the report to say that it is simply creating another elite, that it is creating another favoured class. The question that should be asked is whether there is a need for an improvement in the case of those who are injured on the roads and, if so, whether it can sensibly be done. Let us not say that the best must be the enemy of the good and that because we cannot arrange for the compensation of all who are injured to the extent that we would like, we shall therefore make no benefits for those whom we are able at least to assist.

I accept and agree with the point made by my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) that it is a deeply rooted idea in the minds of most people that if compensation is to be paid for that which has been taken away from the victim of an injury—his ability to live without pain and ability to earn his living—the victim should be able to look first to the wrongdoer to replace that which has been taken away. Most people, I believe, think like that. Most people say "Why should a taxpayer who is innocent of the wrong that has been inflicted on this victim pay when the man who is responsible for the wrong is not especially mulcted?"

I believe that that idea is linked inseparably with some element of punishment. There is nothing wrong with that. We pick that up in Parliament by passing statutes like the Factories Acts, which make it a criminal offence to behave in a manner that is particularly dangerous. I believe that, as between one plaintiff and another, there arises a question that has to be answered. If, for example, there are two victims of injury, one of whom is to blame almost entirely for what has happened to him and the other is blameless—for instance, a man who stumbles drunk from a public house and is run down by a motor car and another who is quite blameless and is run down by a reckless driver—most people would say, would they not, that it is quite unjust that the man who is blameless should get no more compensation than the man who stumbles drunk out of a pub?

We must take account of the fact that in the operation of our system of compensation people look to see some reflection of the question whether or not someone who caused an injury was to blame. It is clear to me that the ability of the tort system to provide enough compensation is very limited. I declare an interest as a lawyer whose work covers this area. I must tell hon. Members that when Parliament introduced the Workmen's Compensation Act in 1923, with a no-fault system of compensation, it gave rise to about nine volumes of Butterworth's Law Reports in as many years. The lawyers do not necessarily lose out when fault is removed from compensation cases.

There are many disadvantages in the system of fault liability represented by our tort system. The tort system must be retained, because it accords with the basic tenets of justice to which I referred earlier, but it cannot be the sole means of providing compensation.

The issue is whether the insurance or social security principle should supplant the fault principle or operate in partnership with it, with or without a shifting of the present boundaries. I believe that the Royal Commission is right in its recommendations relating to road traffic injuries. In reality, only the last part of that question falls to be considered. No one suggests that it is possible to provide insurance as the sole source of compensation.

The criterion for shifting the boundaries ought to be our assessment of the extent to which the system of fault serves the public interest, which I define as the provision of adequate compensation with justice. We do not need to look much further than the case of Snelling and Whitehead, which is referred to in the report, to see how necessary it is at least to improve the standard of compensation for those injured on the roads. That case involved a child of 7 being awarded £48,000 in the court of first instance in 1975. The boy rode his bicycle into the road at a crossroads and was involved in a collision with a car. He was awarded compensation for very severe brain damage. In the Court of Appeal that award was reversed, and the decision of the Court of Appeal was upheld in the House of Lords, although Lord Wilberforce, giving judgment, said that it was a tragic case which should have attracted compensation, regardless of the issue of fault.

It is particularly in relation to child victims of injury that one sees the defects of the tort system for road traffic. The concept of contributory negligence with young children hardly arises, even without the recommendations of the Law Commission. In the case of a child of 7, contributory negligence never arises in practice.

It is a case of all or nothing. When a child goes to court, those advising him recognise that there is a real risk that he may get nothing. I agree with all that has been said about the difficulty in proving fault in a road traffic injury case. It is often a matter of caprice and lottery—whether someone was looking, whether a passenger was so injured that he cannot remember what happened, and so on.

We must increase the value of the social security system to a road traffic victim. I support what the Commission says in that regard. As a Tory, I could not ignore the importance of the doctrine of personal responsibility that was so aptly described by my right hon. and learned Friend the Member for Huntingdonshire (Sir D. Renton). However, as Professor Jolowicz has said, we have a system for allocating the cost of risk bearing through the compulsory third-party insurance scheme, rather than a system for allocating losses caused by injury. I do not believe that we are held personally responsible for our own bad driving in the context of compensation for road traffic injuries. We are not—our insurance company is.

We do not have, in any practical sense, a system that brings home to us the responsibility for our own default, yet it is that which is held out as the justification for maintaining, unsullied, the system of tort liability.

I know that many other hon. Members wish to speak, and I shall not weary the House any longer. I ask that in our approach to the report we should bear in mind the restrictions imposed on the Commission by the narrow terms of reference that were deliberately imposed upon it. We should acknowledge that five years of devoted work have resulted in the beneficial moving of some boundaries. The Commission has dealt with some of the most urgent problems relating to compensation for death and personal injury in a manner that was worthy of the high importance of its task.

2.17 p.m.

Mr. Bruce Douglas-Mann (Mitcham and Morden)

I agree with the hon. and learned Member for Royal Tunbridge Wells (Mr. Mayhew) that the terms of reference of the Pearson Commission were restrictive, but I do not agree that that should have prevented the Commission from coming up with a more coherent theory for a future system of compensation.

I declare an interest. I spent many years pursuing personal injury claims for people injured in accidents, particularly at work, but I shall he speaking substantially against my declared interest because I believe that the system of tort should be extended by the introduction of the principle of strict liability for accidents at work, on the roads and in product liability.

It is only in product liability that the Commission has adequately considered the issues, but even here it has not gone far enough. There are legitimate grounds for criticism of the dangers for an innovator in industry when one has the sort of damages awarded against manufacturers in the United States. When such damages get completely out of hand, they can become a crippling burden.

My hon. and learned Friend the Member for Leicester, West (Mr. Janner) and the hon. and learned Member for Montgomery (Mr. Hooson) have clearly demonstrated the total inadequacy of our existing tort system. Anyone who has practised in it will know that it is a lunatic lottery and an absurd system for providing compensation for anyone.

The Pearson Commission has produced figures showing that the tort system provides compensation for 6½per cent. of the people injured in accidents. The arguments about improvements and alterations to the tort system are irrelevant. They are arguments about the distribution of the icing when more than 90 per cent. of accident victims are not getting any of the cake.

We should get rid of this system, but not by attempting to introduce a wholly State-funded system, as the evidence given by the TUC and the Post Office Engineering Union to the Commission suggested. We know from experience that if we had a system that depended entirety upon raising the money through taxation or national insurance contributions, we should not get the money on an adequate scale.

I think that there is some justification for treating accidents as a somewhat different category from congenital injuries. There is not perhaps so much logic in that, but there is a great deal of historical and political pressure which makes it virtually impossible for us to change the system which gives some degree of preference to the victims of accidents. I suggest to the House that we should evolve a system under which, by imposing strict product liability, strict employer liability and strict road users' liability we can relieve the National Insurance Fund of the present cost of compensating victims of accidents—£420 million a year in compensation and £47 million on administration.

I do not think that we can save the administrative costs but I should like to see the compensation being paid initially under a form of strict liability by the State and recovered, as the hon. and learned Member for Montgomery suggested, by the State from the employers, from the road users and from the manufacturer. We could set a limit on the scale of damages to be collected from individuals, and I should like to see the road user compelled to pay a higher premium every time an accident is caused, even, I regret to say, if it is not demonstrably his fault. [HON. MEMBERS: "No"]. Some people manage to drive for many years with a very low accident record. Others have many accidents, and I do not believe that with them it is purely coincidental. If someone has an accident and it is not his fault, I think he should have to pay a higher insurance premium in the future. I shall come to my reasons for saying that.

I turn to the industrial field and to the manufacturer. We know that if he produces 1,000 cars, that will cost so many broken backs, amputated fingers. and injuries to legs. Another manufacturer devises a safer system. It is reasonable that his contribution to the fund, whether in damages or in any other way, should be lower than that of his competitors because he has devised a safer system.

If we use products which involve danger in their manufacture, we should pay more for the dangerous product than for the safe one. If we want PVC to be manufactured because we need it we, as consumers, should pay compensation. In the end it will be as consumers that we pay, when the employer has to pay all his employees who have accidents. He will collect it through the consumer, and that is right.

It is reasonable that we, as consumers, should ultimately pay for the cost of producing the goods that we use; that cost includes not only the steel, the energy and the wages, but the blood and the bones of the people who are injured in the process of manufacturing it.

The reason why I say that it is logical that there should be some distinction between the compensation paid to the victims of accidents and the benefits paid to the victims of congenital injuries or disease is that it is part of the economic process. My hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) said that there is justification for paying compensation to vaccine-damaged children because they have taken a risk for the benefit of the community. Everybody who goes to work, and everybody who uses the roads, is to a certain extent both causing and taking a risk for the benefit of the community. We could not satisfactorily operate our economic system if we did not have vehicles on the roads, but it is reasonable that compensation should be paid by the users of the roads to those who are injured as a consequence.

My hon. Friends disagreed when I said that if a car user has a higher rate of accident it would be reasonable for him to pay a higher rate of insurance. We do that at present. We lose our no-claims bonus if we have an accident, even if it is not our fault, and we have to make a claim on our insurance. I think that as a matter of administration it is perfectly practicable for us to set up a system—inevitably I must condense my statement, and I condense it very greatly—of compensation for the victims of all accidents, industrial, road and product, and to pay that compensation on the scale of damages as at present.

We could pay that compensation out of a State fund initially and recover it from the manufacturer, who would pass it on to the consumer, and from the road user by way of a State insurance fund, the premiums to which would be increased to the road user if claims were made in respect of his car.

There would be recovery from the manufacturer of the dangerous product. He again will have to cover himself in his costs of the product to make provision for the insurance that he will have to pay. I agree that one should not set the level of repayment by the manufacturer so high that it will cripple him and prevent him from being able to compete effectively or to introduce new methods.

We have talked about fault. Fault is at present irrelevant because in practice it is not the person who causes the injury who pays. It is the insurance companies. As the hon. and learned Member for Royal Tunbridge Wells pointed out, we have a system which provides for the distribution of this financial responsibility and fault is now irrelevant so far as the payment of damages by the person who caused the accident is concerned. It does not happen that way. I wish that it did happen that way and I believe that it could happen that way. If it were done, I am sure that safety in industry would increase greatly, because at present only a tiny proportion–10 per cent.—get compensated. But if the employer knew that every accident would cost him money the standards of safety in industry would rise enormously.

Having outlined the system, I would mention that I am not doing it off the top of my head. It is the subject matter of the evidence of the Society of Labour Lawyers to the Pearson Commission. I was very disappointed that the Commission, having rejected the idea of a totally State-funded disablement benefit system for industrial injuries, did not even mention the proposals that I have been outlining. It rejected strict liability for the roads on the ground, and only on the ground, that it was proposing to introduce an industrial injuries-type system, which the Government are now rejecting. If we were to adopt a strict liability system such as I have outlined, we should be able not only to ensure a very much fairer system of compensation and to reduce the level of accidents that occur, but to release £420 million a year from the National Insurance Fund to meet the needs of those who are disabled from causes other than accidents. I very much regret that the Pearson Commission—if there are fallacies in this argument—did not even address itself to them.

2.28 p.m.

Mr. D. E. Thomas (Merioneth)

I confine my remarks to five paragraphs of the Royal Commission's report—the paragraphs which refer to the position of the slate quarry men. In doing so I am speaking for my hon. Friend the Member for Caernarvon (Mr. Wigley), for Pwyllgorau Ymgyrch Llwch Gwynedd, the campaign committees committed to fight for compensation, the county council, the churches, the 25,000 who signed the petitions for the Wales TUC and the whole of the trade union and Labour movement in Wales. This is an issue which has united the working-class movement within and outside Gwynedd in a demand for historic justice. I speak also from my own family's history and my day-to-day experience, as a constituency Member, of the personal suffering that arises from this pernicious industrial disease.

Merfyn Jones, in a recent study of Y. Chwarelwyr, describes the industry. He says: In the last quarter of the century the total work force fluctuated between some 13,000 and 15,000 employees. The importance of the industry, however, must not be judged by the relatively small number of men involved. It was officially judged in 1882 in the Report of Her Majesty's Inspector of Mines for North Wales that after coal and iron, slate is the most valuable mineral raised in the UK. It certainly made enormous fortunes for a few families and dominated economically and culturally as well as physically the many slate quarrying communities of Welsh-speaking north west Wales. The industrial revolution may have been founded on textile and powered by steam; it was roofed with slate skilfully wrenched from the Welsh hills. The industrial revolution which took place in Gwynedd, based on the slate industry, left two legacies. The struggles of the industry created a radical Socialist political culture deeply rooted in a nonconformist vision of social justice, a cultural heritage documented so well in the literature of T. Rowland Hughes, Kate Roberts and, more recently, Cavadog Pritchard—and more recently still in the work of my colleague, Gwyn Thomas. It is the social heritage of working-class Wales from which I hope I shall never depart.

The other legacy was the crippling industrial disease contracted by slate quarry men, which affected and continues to affect those who literally gave their lives to the industry. Their families have nursed men who are physically strong, save for an acute shortness of breath and related respiratory and coronary conditions.

One has only to read the third annex of the Royal Commission's report listing those who gave evidence, and look at the number of Davieses, Joneses, Thomases and Williamses, to realise how much evidence was presented to the Royal Commission pressing for adequate compensation for slate workers and their families.

When Ministers were pressed in correspondence and in debates—such as on the Second Reading of the Coal Industry Bill, which provided the tripartite compensation scheme for coal miners suffering from pneumoconiosis—and in a succession of meetings, we were told to await the Royal Commission's report. But the Royal Commission clearly failed to comprehend the reality of the problem.

The Royal Commission's negative response provoked an immediate response in Gwynedd. Less than a fortnight after the Royal Commission reported negatively, a crowded and emotional meeting was held in the chapel in Llanberis, where we had gathered four years earlier to commemorate the founding of Undeb Chwarelwyr Gogledd Cymru. It was decided to set up the first of a series of local campaign committees to demand that the Government reject the Pearson recommendation and provide compensation.

Other meetings followed in Blaenau Ffestiniog, Deiniolen, and Dyffryn Nantlle, addressed by sneakers from the trade unions, the Labour Party and my party.

The response at these meetings demonstrated the depth of conviction and determination to obtain justice. As we said at the time, The Commission appeared to have been more interested in the problem of legal precedence than in the real problems faced by the individual slate workers denied compensation. We take the view that it is totally unacceptable that compensation should not be available to people who have suffered the same industrial disease simply because one group of them were employed by private companies. The Government responded to this broad-based pressure from the trade union and Labour movement in Gwynedd. On 26th April the Minister of State, Department of Employment, after receiving a deputation from the Labour Party in Wales led by the right hon. Member for Anglesey (Mr. Hughes) on 26th April, said that the Government had decided that it would be right to look further into this question and that he was setting up a working group for the purpose.

The Minister later confirmed to me, in a written reply on 2nd May, that The working group which I am setting up is an inter-departmental working group of officials. Its task will be to review all the available evidence relating to the question of compensation for workers suffering from pneumoconiosis and similar respirable dust diseases, particularly those who no longer have an employer against whom they can bring an action for damages; to obtain such further information and evidence as is necessary; and to report to Ministers with its recommendations.—[Official Report, 2nd May 1978; Vol. 949, c. 81.] My hon. Friends and I met the Minister subsequently to press for a report from the interdepartmental working party. The Minister came to address the Wales TUC conference on dust diseases in Llanberis on 7th July. He came again to Gwynedd on 23rd October. He was welcomed by the most impressive political demonstration seen in Gwynedd for over 20 years. Hundreds of quarry men and their families, many of them sufferers from this industrial disease, marched the short distance—they could not have managed a long march—from the lakeside at Llanberis to the hotel where the conference was held. There the Minister was presented with the signatures of 25,000 people from all the slate quarrying areas of Gwynedd demanding a compensation scheme.

In that conference the Wales TUC expressed its unambiguous support for the slate workers. It said: It was with deep dismay therefore that it was learnt that the Pearson Commission felt unable to recommend provision should be made for all affected by dust disease, along similar lines to that which has been established in the coal mining industry. In Gwynedd alone it is estimated some four hundred men and fifty widows are denied adequate compensation due to the fact their employer, or previous spouse's employer, is no longer in business … The problem is made particularly acute by the fact that one man, whose employer has gone out of business, can claim nothing, but the man next door, whose employer is still operating, may be in receipt of thousands of pounds of compensation. This injustice, coupled with the fact that the Government has seen fit to put £100 million into the coalminers scheme, makes it an issue of great moral magnitude. The fact that silicosis is a progressive disease only adds to the problem. Many men have left employment in apparent health, only to rapidly deteriorate ten or fifteen years later. Whilst the Limitations Act of 1975 has assisted those with an employer to claim from, it is of little use to those whose employer has gone out of business in the time span between ceasing work with a company and the diagnosis of the disease. The Limitations Act of 1975 was in many ways a recognition of the fact that claims for damages can not always be made immediately after the event. It is in seeking to extend the policy that a person should not be disadvantaged because there is a time delay between cause and effect, that we disagree most strongly with the Report of the Pearson Royal Commission on this particular issue. It is the underlying belief of the Wales TUC in a socially just and equitable society that leads it to demand that what applies to one should apply to all. At its conference in Llandudno this year the Wales TUC unanimously deplored the negative recommendations of the Pearson Commission. It called upon the Government to establish a special compensation fund for such sufferers. We are still awaiting the report of the interdepartmental working party.

In opening the debate, the Secretary of State referred to the passage in the Gracious Speech. That merely indicated that the problem was still being examined. I raise this issue today in order to give the Minister an opportunity to tell the House and the slate workers of Gwynedd and their families what progress is being made in this examination. When is the working party report to be published? When can we expect executive and legislative action by the Government?

Both the Wales TUC and the Labour Party in Wales have pressed that the working party should complete its report and that the Government should announce their decision and proposals as quickly as possible. For our part, I put it on record that I would not be representing the interests of the working people of Merioneth if I were to support a Government who did not introduce a scheme of compensation for slate workers and their families. This is more important than devolution.

A compensation fund could take on a number of forms, as the Wales TUC has indicated. It could be based on the NCB scheme, broadening it to include all affected industries. It could take the form of a levy on the industry which would enable it accurately to reflect its social cost. This should certainly be the approach towards future compensation schemes. A scale of benefits should be comparable to that of the NCB scheme, and must, of course, include provision for those who suffer, their widows and their dependants.

I should like to see other administrative improvements in social security and in the industrial injuries scheme affecting slate workers. It is with that in mind that I welcome the review announced the day before yesterday. We should also like a reassessment of the criteria used by the pneumoconiosis medical board in assessing incidence of the disease. We believe that section 9 of the Social Security (Miscellaneous Provisions) Act 1977 should allow for automatic entitlement to industrial death benefit at a threshold lower than 50 per cent. during life, and that the gross injustice of the 55p per week industrial death benefit to a widow should be increased substantially and index-linked. Our immediate aim, however, must be a compensation scheme.

Defending the right of slate workers to have some say in the running of the quarries at the time of the Dinorwic lockout in 1885, one of the quarry men, Mr. R. Jones, said: What are the workmen's labour and their lives but their capital? How many workmen have lost their capital in the Dinorwic quarries, and how many orphans and widows are there in the neighbourhood of Llanberis who have seen their capital brought home in pieces upon a bier? Obtaining justice for slate quarry men and their families is my first political priority, and I expect the Government to respond in this Session of Parliament.

2.40 p.m.

Mr. David Weitzman (Hackney, North and Stoke Newington)

In my early days at the Bar—I am afraid it was very many years ago—there were many differences as to the way in which we dealt with and assessed compensation. The torts of negligence and nuisance demanded, as they do today, proof of negligence or nuisance causing the damage. Health and safety legislation laid down provisions with regard to employment conditions and set out the remedy for breach of statutory duty, particularly in the case of dangerous machines. But, in the main, for persons injured or attacked by a disease arising out of and in the course of their employment—I emphasise those vital words—there was a whole scheme of workmen's compensation cases.

These cases were dealt with by judges in the county courts, as they then were, and other compensation cases, although sometimes tried by judges, were often tried before juries. That state of affairs has disappeared over the years. Rarely in a case of negligence or nuisance does a jury now hear the case. That system of trial appears to be preserved for defamation actions and criminal cases.

Beveridge and the advent of a Labour Government in 1945—and I had the honour and pleasure of being a Member of this House then—saw the disappearance of the Workmen's Compensation Acts and the cases under them. In their place there grew up, as compensation for injuries, however suffered, a system of payments by way of social security. In 1977–78 the cost of State provision in this respect amounted to no less than £18,000 million—about one-third of public expenditure. Yet although great progress has been made in this respect in our development of the welfare State, there remain many unsatisfactory features in our compensation system. It is true that today disablement benefits and sickness deal with compensation to a considerable extent, but they fall far short of providing full compensation in many cases where a person suffers severe permanent injury or where death results.

It is said that the present system, particularly in driving cases, encourages individual responsibility and deters unsafe conduct, but there are many cases in which an innocent victim or even one partially to blame is quite unable to prove that it was the negligence of the defendant that caused the accident. Although the victim suffered permanent injury or loss of employment, there is no compensation available for him. Furthermore, there are cases of injury or disease suffered by taking prescribed drugs or from undergoing faulty medical treatment. We know the difficulty that often arises in trying to balance the evidence of one expert condemning another expert.

There was a great deal to be said for a close examination of the position. I refer particularly to an examination of the common law position with regard to proof in cases of negligence and nuisance, the possibility of discussing a no-fault scheme, and how developments in our social security system can deal with the matter. Therefore, the whole position was referred to the Pearson Commission in March 1973. Five years have elapsed, and we have undoubtedly a document of great value containing many excellent recommendations as a result of the Commission's labour.

There is still room for serious criticism of the report. It retained the tort action, although it recognised the strong criticism that it entails. It recommended that the value of secial security benefit was to be deducted in full and that non-pecuniary benefit would not be recoverable in respect of the first three months of the injury. We have not heard the Secretary of State's comments on that aspect.

The report recognised, however, the iniquities that may arise with regard to motor vehicle injuries, and reform of some kind is certainly required. Paragraph 1003, in chapter 18, recommends a no-fault scheme extending the benefits paid under the improved injuries scheme to the victims of motor vehicle injuries. No doubt this will go some way to remedy the position but clearly it must depend on the scope of the improved injuries scheme. There is a great deal to be said for the argument advanced by the right hon. Member for Wanstead and Woodford (Mr. Jenkin) on the question whether a no-proof scheme is a satisfactory way of dealing with the problem. We must also remember that the mixed system recommended must result in a complex set of methods to compensate the injured person or the dependants of those killed.

The report would mean a wide variety of social security benefits payable to sick and disabled persons. There would be schemes for the disabled and for industrial accidents and diseases. The subject of criminal injury will also have to be considered, as will the subject of war pensions. The benefits will cover the tort of negligence, with strict proof still remaining. The proposals made in respect of new categories—road accident victims and disabled children—will all be covered. These matters are most complex and will involve a considerable amount of administrative costs.

In making these recommendations the Commission appears to have felt restrained by the terms of reference. It said that it was not free to consider a comprehensive compensation scheme covering all injuries; still less, the Commission could not deal with a universal scheme covering sickness also. In my view it was a pity that the Commission adopted that view, because in some respects it went beyond the terms of reference.

The report is, however, a valuable document. Its summary of conclusions shows the enormously detailed work it has carried out and its recommendations are detailed and should be considered with care. Some of them can be carried out but unfortunately one has to realise that our present economic position must mean the postponement for a considerable time of any action to bring many of these recommendations into effect.

I wish to mention one point in regard to damages in court actions. I have often lamented the fact that in the course of some actions for damages for injuries suffered at common law an immense amount of time elapses before a result is achieved. How often does a long delay take place, sometimes years, before the issue is resolved. The Commission's recommendation in regard to social security helps the situation, but I wonder whether some scheme providing for greater assistance for the victim who is awaiting a decision over a long lapse of time could be devised. This suggestion certainly warrants consideration.

There is one area in which an early opportunity should be taken to carry out reform. I have always felt that criminal injuries are not dealt with in a very satisfactory way. Therefore, I welcome the conclusion that a State scheme for criminal injuries is desirable in principle and that the existing criminal injuries scheme should be reviewed and that the recommendation in chapter 29 should be followed to enable the scheme to be put on a statutory basis.

I should like to say a few words on the question of strict liability. Many years ago I drafted a Bill—introduced by my hon. Friend the Member for Carlisle (Mr. Lewis)—which imposed strict liability in regard to drugs. That legislation was talked out, and I am glad to see that the Commission in its recommendations has moved in that direction. I do not share the doubts expressed by some hon. Members on that matter.

Compensation and its attendant problems is an area of great complexity and it requires still more detailed investigation. No solution of its complex problems can be carried out in a completely satisfactory manner. The Pearson report is a step in the direction of trying to seek such a solution, but it is a matter which will and must call for urgent attention in the future.

2.50 p.m.

Mr. David Crouch (Canterbury)

It is a pleasure to be called to speak just after the hon. and learned Member for Hackney, North and Stoke Newington (Mr. Weitzman), who has given us an eloquent and detailed survey of the Pearson report, which is so large and long. We are grateful for his contribution and for all the contributions that we have heard from our hon. and learned Friends and colleagues on both sides of the House in this valuable debate.

I wish to speak about a specific problem concerning product liability. Before I say anything about that, I must tell the Secretary of State that a situation requires me to leave the House as soon as I have finished speaking. It will mean that I shall have to curtail my remarks—-which no one will regret. I have a longstanding engagement in my constituency and I have to go there. I also offer my apologies to my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin).

As I am about to speak on the subject of strict liability in regard to products, I must immediately declare an interest. I shall be talking about the drug industry, and it happens that I am a director of a drug company.

The Royal Commission said that there should be strict liability for the producers of drugs, with no exceptions. I argue that this is wrong, and that in the case of the drug industry it would have a harmful effect not only on the industry but on the medical profession and the provision of the best health care available to the public. I believe that the public would be effectively denied some of the advantages of modern scientific knowledge.

I feel able to speak on this subject because the Royal Commission made special reference to and a special study of the problems that might affect the drug industry. It referred to this matter in paragraph 1275, as follows: we recognise that the difficulties faced by the drug manufacturers would if anything be aggravated by the imposition of strict liability. We have nevertheless concluded that no special treatment could be justified. It is the last sentence which concerns me and makes me distressed. I was glad, however, to hear the Secretary of State say today that he was keeping an open mind on the matter and was aware of the special considerations which apply not only to this industry but to other sides of it. The drug industry fully recognises the force of public opinion in this matter and accepts the view that any person injured as a result of the use of a defective product must be compensated whether or not there has been negligence on the part of the manufacturer.

The Royal College of Physicians has also given some thought to this problem. It has stated that it is wrong, in its opinion, that drug manufacturers should themselves have to compensate victims of serious drug-related side effects regardless of blame. The Royal College of Physicians is in favour of the establishment of a common fund compensation system for drug injuries. Patients would get compensation regardless of who was at fault, but the burden of payment would not fall directly on the drug manufacturers.

The Royal College of Physicians suggests that the common fund might be financed by a levy on drug sales. It goes on to point out that A common fund system would not dispense with the need for reasonable warnings and instructions in appropriate cases but it would remove the inducement —to doctors— to practise defensive medicine "— as the Royal College of Physicians calls it. It continues: Safety first medicine may result in fewer accidents but it would also result in fewer cures, and the balance of advantage is unlikely to be in favour of patients as a whole. The Royal College of Physicians points out that strict liability would cause the drug manufacturers to protect themselves with elaborate and restrictive warnings to doctors of side effects, however remote. In effect, the drug manufacturers would seek to pass the buck to the doctors. This would lead to doctors filling in many forms to prove that the warnings and instructions had been passed on to their patients, in order to protect themselves. It would all be very time-consuming and time-wasting. It would not be conducive to building confidence between the doctor and his patient.

The Royal College of Physicians also had this comment to make regarding the fact that there are drugs and drugs, as we all know. It said that some drugs are well established and are even on open sale to the public, and they have a high degree of safety, as we know. They have been accepted as such. Others, however, particularly the prescription drugs, are given only for serious diseases, and in some cases for very serious diseases, such as cancer. There is high degree of risk with those drugs. The risk of side effects is high. In most cases, in a doctor's judgment, that would be acceptable to the patient suffering from such a serious illness.

The Association of the British Pharmaceutical Industry, which gave evidence to the Royal Commission, believes that the injured party should merely have to prove that an accident was caused by the product and the amount of his loss—those two things—and the State should pay compensation for that loss without reduction in respect of contributory negligence. Having paid, the State would be able to recover from the drug manufacturer who was at fault, but with a reduction in respect of any contributory negligence. In effect, this would mean that the manufacturer would be liable only when he had been negligent, and compensation where the manufacturer had not been negligent would be paid by the State.

This idea of a State compensation scheme was not accepted, however, by the Pearson Commission. It recommended instead that there should be strict liability. I maintain that this will have a most damaging effect on one of our most successful scientific industries. The drug industry is innovative, and its innovations are science-based rather than technology-based. Its work and its achievements are constantly widening our frontiers of knowledge into the unknown. The drug industry's success is due to this sort of innovation. As a result, the development risk is high. We must accept that. The high risks are provided for, and successive Governments have produced statutory requirements for the testing and marketing of medicines which are very strict and demanding and are unparalleled in any other sector of industry. I am referring to the Medicines Act 1968 and other measures which have followed since then to tighten up our control over this high-risk area of medicines.

In this regard I should say that the drug manufacturers do not regard the fact that a medicine has passed under the Medicines Act and gone through the severe Government tests as a safeguard in itself against their being liable to any subsequent claim. That is not the view. It does not absolve the manufacturer entirely. Even so, even with these strict Government controls, few medicines can ever be considered to be totally safe. Despite the exhaustive testing that is required, there are considerable risks in placing a new medicine on the market.

If strict liability were introduced, the risks for the manufacturer would be greatly increased. Some would ask "Why should we worry about risks to manufacturers? We are concerned about risks to individuals". I say that we must give thought to this, because such a risk to manufacturers must inhibit their work on research and development.

It would appear from the Pearson Commission report that with an established medicine a person who suffered from a known side effect would not be able to recover compensation from any source—neither the Government nor the manufacturer. On the other hand, with a new innovation a patient suffering from an undetected side effect might well recover compensation from the manufacturer, as recommended. The result would be a tendency for the medical profession to start practising "safety first" medicine, as suggested by the Royal College of Physicians.

Drug manufacturers would be forced to sell new drugs in markets where they would not be so inhibited or restricted. That would be abroad. It would mean depriving the British patient for a long time, until those drugs were proven as safe abroad, of access to a new remedy.

If the Government accept Pearson's recommendation of strict liability, I advise and urge them to provide a buffer scheme as well. There should be a buffer such as I have described of a State scheme, as well as placing a requirement on the industry. I ask the Secretary of State to give further consideration to the memorandum of evidence which was given to the Royal Commission by the ABPI on the question of a buffer compensation scheme to be provided by the State.

3.0 p.m.

Mr. Edward Lyons (Bradford, West)

I appreciate that the winding-up speeches are almost due and that other hon. Members still want to speak. I shall be very quick indeed. I have abandoned most of my remarks before I have begun.

In this report, which indeed lacks coherence and a theme, there are valuable suggestions. I believe that any Government are liable, when they legislate, to legislate piecemeal. Therefore, I shall confine myself almost entirely to one facet of this report, and that is with regard to motor accidents. I have no interest to disclose, but many years ago my own father, while a passenger in the back seat of a car, was killed when there was a collision between that car and another vehicle. Because the two drivers were unwilling to make statements, and there were no other witnesses, in the end an ex gratia payment had to be accepted, despite the fact that at the time my father had a wife and three children still in education.

Ever since then it has seemed to me very important to alter the basis of liability in terms of motor accidents. What people do not realise is that good drivers frequently make mistakes. There was a World Health Organisation report in 1962, which said that a good driver made a mistake once in every couple of minutes. There was another report in America which showed that nine mistakes were made by a driver in every five minutes. Any of those mistakes can cause an accident. The degree of negligence often has no relationship to the size or seriousness of the injuries. It may be that on one day a particular piece of negligence causes hardly any injury while on another day, because of wet road conditions causing a skid, the same negligence will cause a serious injury.

In those circumstances it seems to me that the argument for no-fault liability is very great. One must take the case where there is an absence of witnesses, and one has to bear in mind that children, to whom liability cannot in any event be attached, are being knocked down. All these arguments are arguments for no-fault insurance.

Of course, the scheme must be paid for. I am not sure that increasing the price of petrol is the best way. I am certainly not happy about the suggestion from my hon. Friend the Member for Mitcham and Morden (Mr. Douglas-Mann) that a driver who has an accident must pay more for his insurance premium. I believe that would deter him from reporting an accident where he himself was injured.

I once remember sitting happily in my car at a traffic light when an old man drove into the back of me. I had been stationary for minutes. I would take it very amiss to be told afterwards that I would have to pay more on my insurance premium. That man admitted to me that he had made a mistake. He apologised and paid for all the damage. Yet according to my hon. Friend I ought to pay more insurance. If one pays more insurance, it is a reduction of the damages envisaged by the scheme. Would one have that allowed against the compensation that one would otherwise receive? It seems to me that that suggestion is not on.

I do not think that the scheme should embrace everyone. There should be some exception for those whose misconduct has been enormous—for example, a criminal who drives away from the scene of a robbery and crashes. In my view, such a person should not have compensation according to the ordinary rules. There must be some kind of exception for that situation. However, if he is killed in such a crash I accept the conclusions of the report that his widow and children should not be penalised and that they should receive compensation.

The suggestion of no damages for non-pecuniary loss for the first three months is bad. If one says that all national insurance payments are to be offset against damages and there should be no damages for pain and injury and loss of amenity for the first three months, there will be no incentive for an employer or anyone to take precautions to avoid accidents where the likely outcome is an injury for less than three months. Nobody will sue. In those circumstances why should anyone bother to make the country safer against accidents? It seems to be an absurd proposal.

3.6 p.m.

Sir George Young (Ealing, Acton)

You have been addressed by so many barristers this afternoon, Mr. Deputy Speaker, that you must feel like a judge. Like the hon. and learned Member for Bradford, West (Mr. Lyons) I have to jettison most of my remarks.

Most of the reports of Royal Commissions that we have debated in this House have started with a clear analysis of a complicated situation, have then moved on to the principles which they think should underline the solution and have set out a set of coherent proposals. The Pearson Commission has not produced such a report.

The reason for this is clear when one reads chapter 33—the last chapter. Most final chapters of reports are headed "Conclusions". It is appropriate that in the case of this rather indecisive and evasive report the final chapter is modestly entitled "Concluding reflections". Right at the end of the Commission's deliberations it appears that there was total disagreement among members on the basic principle of compensation.

Paragraph 1713 of the report reads: There are among us broadly three schools of thought. The report then goes on to say that there are the no-fault school, about which we have heard this afternoon, the tort school and then the third school—and one can but marvel that at the end of five years of close examination there were any who had still failed to form a judgment—which said Then there are yet others of us who take the view that, in the light of all the uncertainties, it would be best to wait until it is possible to assess the social and practical consequences of our proposals. If that were the state of play among the Commission members at the end of five years, it is hardly surprising that in the preceding chapters there are contradictory and conflicting recommendations and that it is quite impossible to find any thread running through the report.

There are two bases of compensation—tort and no fault. Tort has a number of disadvantages which the Commission quite correctly describes—it is difficult to understand, slow and expensive, and the level of damages is inappropriate and conflicting. But there is one advantage of course, which has been repeated over and over again today—namely, that if someone has negligently or intentionally caused injuries to another person he should be made to pay for the consequences of his fault. Any new scheme must adhere to that principle. I extricate that one advantage of tort for any new system.

On the no-fault suggestion, we see in chapter 10 a sentence that highlights the limited approach to the principle of no fault. It says: Compensation, it is argued, should be designed to compensate for loss actually suffered, irrespective of what caused it…This argument, too, has force. To my mind compensation should reflect need. That is not merely an argument which has force; it is a statement of principle that Members on both sides of the House should seize with both hands and seek to implement.

Members of the Pearson Commission should have asked themselves how they could move towards the ideal of compensating according to need while at the same time retaining the one advantage of tort—the retributory or deterrent theory. I believe that this can be done by subrogation, which the Pearson Commission dismissed in six lines. Basically, under subrogation the State would pay benefits' to the injured person in each case, but where the injury had been caused by the fault of another the State would be entitled to bring an action against the wrongdoer in order to recover the cost.

This is an arrangement common to the insurance world. This solution retains the one advantage of tort with all the advantages of no fault. It is dismissed in six lines in the Pearson report, which I shall not read out. However, it does say that there are formidable objections. It lists one objection, namely that an element of fault would be reintroduced. That is not an objection at all. In paragraph 262, the Pearson Commission said There is elementary justice in the principle of the tort action that he who has by his fault injured his neighbour should make reparation. It is inevitable in the subrogation system that there should remain an element of fault. That is not a disadvantage, it is a positive advantage. Contrary to what Pearson says, the principle of subrogation is already enshrined in legislation. Hon. Members will recall instantly sections 23 and 24 of the Ministry of Social Security Act 1966, which states basically that where a man fails to pay maintenance to this wife and she must get supplementary benefit, the State has a right to get the supplementary benefit back from the husband. So already we have the principle of subrogation, and if there are formidable objections to it one wonders how it got on the statute book.

Sir Morris Finer and his colleagues were faced with exactly the same problem as the Pearson Commission. Both were trying to compensate individuals and families for something they had lost—in the case of the Finer committee the loss was that of a husband and in the case of the Pearson Commission the loss was that of a faculty. In both cases the effect was to leave those concerned with inadequate income, and there was dissatisfaction with the current legal basis of compensation.

The Finer committee proposed a special system of financial support, based on means. It gave two reasons for this: (1) To relieve lone mothers to the maximum extent possible of the pressures and anxieties attendant upon Court proceedings for the assessment and enforcement of maintenance. And (2) to assure the lone mother of a regular and stable income for the family, regardless of the extent to which the absent parent fulfils his obligations. That was the clear statement of principle that motivated the Finer committee, and the Pearson Commission should have grasped that same principle and tried to implement it. The Pearson report is a missed opportunity.

Many of us were looking to the Pearson Commission for some way out of the mess in which we find ourselves. Instead, it has moved us a few yards further into the swamp, with no idea that we are actually moving in the right direction, and it is with some difficulty that I shall restrain myself from voting against the motion.

3.11 p.m.

Mr. Nigel Spearing (Newham, South)


Mr. Ian Percival (Southport)


Mr. Deputy Speaker (Mr. Bryant God-man Irvine)

Mr. Percival.

Mr. Percival

I apologise to the hon. Member for Newham, South (Mr. Spearing), but the time has come.

The Pearson report is a massive piece of work and represents a massive amount of work, by any standard. We owe a great debt to Lord Pearson and his colleagues for what they have done. We have heard a lot of criticisms, but that is natural; we never do hear about the things that people agree about. Lord Pearson and his colleagues have made a large number of recommendations, most of which meet with pretty general approval. Of course those have not figured in the debate because we are all concerned to use the time available to deal with matters about which we want to express doubts or differing opinions.

In addition to coming to all those conclusions, Lord Pearson and his colleagues marshalled a mass of fact and argument relative to the matters at issue, which is all available now to all of us when we wish to pursue those matters that interest us. I was glad when my hon. and learned Friend the Member for Royal Tunbridge Wells (Mr. Mayhew) paid his tribute to the Royal Commission and said that perhaps some hon. Members in the debate had been less than generous. I am bound to say to my hon. Friend the Member for Ealing, Acton (Sir G. Young) that I think that that could be said about his observations, although I appreciate that he had to get them all into a very short time, as I have mine.

It is all very well to talk, as he did, about subrogation as providing the answer, but we have heard again today hon. Members saying how nice it would be to cut down the amount of work done by lawyers. If they think that to adopt the subrogation system would cut down the cost of administration or the work for lawyers, they are sadly misguided. One of the Secretaries of State has esti- mated that to implement the motor proposals alone would take 1,000 people full-time—800 civil servants and 200 doctors.

Suppose that we had that right across the board—civil servants to administer it, lawyers to give advice to them, lawyers to advise the lay clients as to their rights against the State—because it would have to be a system in which liability was on the State and there would be just as many arguments whether the State was liable or not—and then we would have, behind that, all the process of the State's recovering that money in the names of the plaintiffs. I ought in my own self-interest to welcome that system, because never can there have been a system offering more of a future for lawyers and other professions. It is not as simple as my hon. Friend suggested.

My hon. Friend the Member for Ealing, Acton and others are quite right to say that there is no thread running right through the report. Of course there is not. How could there be? We have only to look at the terms of reference to see that there could not be a single thread. My hon. Friend referred to chapter 33, right at the end of the report, in which in gentle terms the Commission uttered a cri de coeur that it had, in effect, been prevented from doing what it would very much have liked to do.

The hon. Member for Stoke-on-Trent, South (Mr. Ashley), whom we all admire so much, was a little hard on the Commission, and so was the hon. and learned Member for Montgomery (Mr. Hooson). It is not for the Royal Commission to tell us in which direction to go. It did not have the chance to do so, anyway, but I question whether that is the sort of thing we should ask a Royal Commission to do. There are great moral issues, but they are great moral issues for us.

I have not yet heard stated in the House the real moral issue, which is how much money we all of us, the taxpayers, are prepared to put up to carry out the fine ideals to which we, no doubt genuinely, subscribe. That is the real issue that the country as a whole and we in the House must face. We did not give that task to the Royal Commission, and I hope that we never shall. I hope that we shall face it ourselves.

Mr. Spearing

Does the hon. and learned Gentleman agree, with regard to his point about increased work for lawyers, that even if the amount of work were the same it would remove from the injured person the macabre roulette criticised so strongly by the public and every hon. Member?

Mr. Percival

That is a gross distortion of the facts. Nobody has ever suggested that the law of tort covers every possibility. We lawyers have been the first to recognise its defects and deficiencies and to try to fill the gaps. Such extravagant terms as those used by the hon. Gentleman do not get us anywhere.

The danger of talking in grand terms about looking for a direction, or guidance, on the great moral issues is that of being driven into an "either-or" approach. If we are to approach the matter in practical terms, as we should, we should be very foolish if we let ourselves drift into an either-or approach.

At present we have the benefit of having a very elastic system, with two different methods of providing compensation. One of them is based on what I suggest is the very sound principle of recognising that individuals have responsibilities and duties. It is wholly in accordance with those principles that if they fail in those responsibilities or duties they should make recompense. It is not a matter of expiation or appeasement. It is simpler than that. It is a simple philosophy that we should all have responsibilites or duties, that we should accept them, and that we should accept that if we fail in them we should make recompense.

My right hon. and learned Friend the Member for Huntingdonshire (Sir D. Renton) said that that should be to the limit of the person's ability. That may well be. What I think to be so important is the basic proposition, and we must never lose sight of it.

So long as those conditions exist, it is right and proper to call upon a person to make recompense. When they do not exist, there is no basis upon which to do it. Then we must look to the State. We must look to ourselves, all of us, and ask "Shall we back up our sympathy with our money?" But what we should not do is to look for a way of salving our consciences by getting someone else to pay.

The hon. Member for Mitcham and Morden (Mr. Douglas-Mann) said—1 know that this is a gross oversimplification—that the hope of getting enough money from the State to do what we would all like to do was very small, and that therefore we must look for other ways. So long as those other ways are within the principles that I have just enunciated, fine. But we must be very careful not simply to look for someone else to pay and cook up a basis upon which we can say "He should pay; for this, that or the other reason." That would be wholly wrong. It would not be measuring up to our responsibilities but would be side-stepping them.

Mr. Douglas-Mann

I was suggesting that it should be the consumer of the product ultimately who paid. That is because the injury is part of the cost of the product. 'That seems to me to be logical.

Mr. Percival

I appreciate that, but I hope that hon. Members will allow me to develop the propositions in my own way since I have sat through the whole of the debate and been obliged to cut my observations to the minimum.

I want to show how all the requirements which I have just postulated can he met by taking advantage of our present system. If we were to look for an either-or approach, we would deny ourselves the opportunities which are there already instead of doing what we ought to do and taking full advantage of the present system and all its flexibilities.

It is two-handed. We have the areas of tortious liability. I hope that people will talk about that more in terms of liability based upon responsibility and duty. Let us forget the Norman French word which is used to describe it briefly, and let us remember what it really stands for.

For as long as I have been at the Bar, lawyers have been looking to see whether the duties and responsibilities recognised by the law at any given moment were in tune with the needs and the thinking of society at that time. The law of tort has been moving forward constantly and providing more remedies, sometimes the courts doing it and sometimes this House doing it by imposing or varying statutory duties. I have in mind the Factories Acts and statutory duties in all sorts of other areas of activity. This is the way that we use the common law of England, supplemented by legislation passed in this House, to put into effect and to keep up to date the concepts to which I have alluded and which my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) so rightly said are very widely believed in by the people.

Then one has to say that if compensation cannot be provided within those principles, where it is thought that there should be compensation we have to face the fact straight away that the only alternative is whether the State will pay—even better to think in terms of whether we the people will pay, because there is no State money.

If we are talking about a disability income, we should agree that it is a noble thought, and I am sure that there is no hon. Member who would not like to see it. So we can accept that it is desirable. The question is whether it is practicable.

In all these questions it is much more honest, and we do ourselves more credit, if, instead of talking about great moral questions in general terms, we face the fact that where a situation cannot be dealt with by casting the liability upon the individual within the principles that I have stated, there is only one alternative, which is to finance the benefits from taxpayers' money.

My time is now very limited, so I shall have to cut down what I intended to say even more. I make one brief comment about no-fault liability in connection with road accidents. I should appreciate it if the Solicitor-General could tell the House whether the scheme put forward by the British Insurance Association for a no-fault liability scheme covered by insurance is still under consideration and, if so, whether it might be published. The British Insurance Association has sent many of us a paper in which it refers to having submitted this to the Royal Commission.

I suggest that in view of the doubts expressed about the Commission's proposals on no-fault motor liability, it is unlikely that anything will happen on that very quickly and that if there is some other scheme which can be implemented on the basis of its being funded by insurance by a scheme being put forward voluntarily by insurers, we ought to consider it.

I turn now to recommendations Nos. 1 to 72. It is no exaggeration to say that most of those recommendations have met with a large measure of approval in all parts of the legal profession. They have, I think, attracted little or no opposition from outside the profession. Because of that we should be able to contemplate taking action in this substantial area without much delay. The Solicitor-General can count on the Opposition's support for any steps that must be taken to ensure that proposals that are generally agreed are implemented.

I was pleased to hear the Secretary of State express doubts about the "first three months" provision. That would create another class of small cases. The people who had suffered for 14 weeks instead of 13 would then have a claim for one week. That would be complicated and yet another lawyer's delight. We should not risk that type of difficulty.

I was glad to hear the doubts that he expressed about the recommendation for compulsory periodic payments. That recommendation is; almost universally criticised. The Secretary of State could count on our support if it were felt that those recommendations needed further thought and should not form part of whatever changes might be made in the near future. There are other matters which I should like to discuss but time prevents us and I shall have to content myself with talking to the Solicitor-General about them later.

In general they arise out of the reservations expressed in the memoranda submitted by the Law Society and the Bar Council on this part of the recommendations.

That part of the report which deserves most immediate attention—and I regret that I shall not have time to do it justice—is that which deals with strict liability. Something is going to happen in that field rather quickly whether we like it or not. We should be ready to have our say in it. I expect that had the hon. Member for Newham, South the opportunity he would mention that there is an EEC directive at an advanced stage, the terms of which we should consider carefully. My right hon. and learned Friend the Member for Huntingdonshire referred to the part played in this by my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke). I commend what he has said to all who are interested in this subject.

Thinking has progressed a long way on this matter. Decisions must be taken soon. That is the first reason why I should like us to concentrate on this self-contained area.

When I spoke of "strict liability" I was thinking particularly of product liability as distinct from strict liability across the board or in other areas. Much progress has already been made on this matter in at least three centres of discussion—by our own Law Commissions, the Strasbourg convention, and the EEC directive, as well as what has already been done in the United States which might well provide us with examples of what we should avoid.

I hope that the Solicitor-General will be able to comment on these matters, but if he cannot I hope that he will write to me so that we might learn the Government's position. In July the Attorney-General said that he hoped that there would be a Government view on product liability before long. That was a few months ago, and I hope that we may have it now.

I accept that there will be some change in the burden of liability. The discussion is about what the changes should be to get the new balance right. It must turn very much on the definition of "defective". The reports of all three bodies that I have mentioned recommend a definition of "defective" based on concepts of safety, but the aspect which needs to be considered above all is: "Safety in the light of what knowledge—the knowledge when the product was put on the market, or the knowledge some years later when, to everybody's surprise, something is discovered to be a defect according to the definition in the light of the further knowledge then available?"

The Law Commission's recommended definition is based on the concept of defects related to safety, as is the Strasbourg convention. Neither says at what time one has to take the standard of knowledge for testing whether a product was "safe."

The EEC directive goes further, saying that the person who produces the article shall be liable even if, in the state of knowledge when he put it into circulation, there was no way that he could know of the defect, and even if it was only later that technical advances produced further knowledge in the light of which the definition would no longer be satisfied. That is what the CBI has in mind in its phrase, quoted by my right hon. Friend the Member for Wanstead and Woodford, about unlimited liability for unknowable defects". We think that it should be made clear that the relevant state of knowledge should be that existing when the article was put on the market.

I should like the Government's view on that. It would mean accepting the Royal Commission's recomrnendation—it recommends the Strasbourg convention definition—but also providing specifically that the relevant time for judging knowledge should be as I have postulated.

We should also like the Government's views on some of the defences which have been proposed, which I do not have time to mention now but which the Solicitor-General will know about. There has been a good deal of discussion about an upper limit on claims. What about a lower limit? The Royal Commission thought that a lower limit in another area of damages would cut out many petty claims.

We have no firm views on an upper or lower limit and would like to discuss them, but when it comes to a time limit we feel that there is a strong case for saying that, 10 years after an article has been put into circulation, that should be the end of the matter. We should also like to hear the Solicitor-General's views on the extent to which complying with a specification, or recognised safety standards, or a licensing system run by the Government, or a certification system, would provide a producer with a defence.

We should appreciate the Solicitor-General saying something about the financial aspects of what is proposed in respect of product liability. No doubt the right hon. and learned Gentleman has seen the papers from the British Insurance Association, the Chemical Industries Association, the Agricultural Engineers' Association and the CBI, all of which expressed concern in varying degrees. According to the last BIA paper that I saw, the association did not think that this would be a serious problem, but other papers, particularly one from the chemical industry, have pointed out that in the United States of America in some areas of product liability, insurance has trebled in four years. If that is likely to happen, we ought to know about it in advance. I am not saying that it would necessarily be conclusive, but it would be a pity if we went into this matter thinking that there would be only a minimal increase in costs of production and found later that we were wrong.

The American system undoubtedly presents some difficulties for many of our exporters, but, like every cloud, it has a silver lining. At least we can look at what has happened there and learn from it.

Time does not permit me even the shortest peroration. I do not expect the Solicitor-General to answer all my questions, but we shoud greatly appreciate any guidance he can give us on any of them.

3.37 p.m.

The Solicitor-General (Mr. Peter Archer)

It is a convention of the House to say at this stage that we have had a good debate. When I say that, it is not simply because it is the conventional thing to say. It has been an extremely valuable debate and I regret that at least one of my hon. Friends waited all day to take part and was unable to do so. We shall be happy to have the views of hon. Members on a number of subjects which, for various reasons, they were not able to cover today.

The purpose of the debate was to afford the Government an opportunity of hearing the views of the House on the various issues raised by the report. When my right hon. Friend opened the debate, he indicated the way in which the Government's mind was working on some of the issues. The right hon. Member for Wan-stead and Woodford (Mr. Jenkin) seemed to suggest that it was a ground for criticism that my right hon. Friend had not been more specific in indicating what the Government had in mind, but this is where the Government cannot win. If we had come to the House and said "This is what we propose to do" we would have been criticised—quite properly—for making up our minds in advance of the debate. I am grateful to the right hon. Member for Wan-stead and Woodford for indicating now that he was not thinking of that as a matter of criticism.

The Government came with an open mind and for that reason I am unable to give definitive answers to many of the questions put to me, particularly by the hon. and learned Member for Southport (Mr. Percival). I shall be happy to discuss these matters with him afterwards.

I add my tribute to those paid by the hon. and learned Members for Southport and for Royal Tunbridge Wells (Mr. Mayhew) to the work of the Commission. I have been pleased to see Lord Pearson attending our debate. It is an exemplary Royal Commission report. It was careful and painstaking, it took adequate time to obtain the facts and it marshalled the arguments. That is exactly what we expect of a Royal Commission. That is its value and it has become an integral part of our governmental process.

It is inevitable that the process will attract some criticism and I am sure that the distinguished members of the Commission would hardly have expected to avoid criticism. I fear that that is an inevitable reward for those who give their time and talents to the service of the public. It would be surprising if. in the process, the Commission had not made some recommendations. Although we expect recommendations from such a body, we do not expect it to relieve politicians of the responsibility of taking the ultimate decisions, balancing the advantages and disadvantages, considering the groups who will gain and those who will lose and weighing the resources required for one purpose against those urgently needed for a different purpose. Those arc matters for the Government and, ultimately, for the House.

There has been some criticism of the Commission's terms of reference. Those who establish Royal Commissions cannot win. It is said either that the terms are so wide that what is invited is a general debate on a whole area of public interest, or that the terms are so narrow as to exclude something which the Commission might have wished to take into account. However, the Government have to take account of these issues in the whole context of the other matters raised.

And may I mention what was said by my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley)? We appreciate that those who campaign vigorously on behalf of specific categories of people are also those who complain in general about the interests of the disabled. Nobody knows better than those campaigners that we are discussing painful and heart-rendering priorities. My hon. Friend asked me to apologise for his absence. He explained that he arrived in this country only this morning and came here straight from the airport. Since he has not had a night's sleep, he is now remedying that situation. A number of other hon. Members have told me that for various reasons they could not wait until the end of the debate. I am sure the House will accept the difficulties that confront some Members on a Friday and I hope that those concerned will forgive me if I do not mention each of them specifically.

The report raises a number of issues not always connected by any readily discernible logic, except that they relate to the injured and handicapped. That is the fault of nobody but results from the fact that we are confronted with so many issues. Underlying what was said by the Royal Commission is the question of principle involving the relationship between compensation for physical misfortune through the law of tort and compensation through a system financed by the public.

How far should such compensation be paid by those whose fault led to the misfortune? How far should compensation be limited to those who can establish that they were the victims of that fault, or that in some way their injuries were related? I must be careful not to exclude the no-fault principle. These are the issues that face us. For example, how far do we wish to extend those categories both in respect of payers and recipients? Do we wish the bill to be met by those whose activities created the risk—perhaps together with those whom, economically, they can compel to share the burden, normally their customers? Do we wish the recipients to be only those whose misfortunes can be specifically laid at the door of somebody else, or should help extend to all those in need, irrespective of the cause?

I think that these matters can be discussed without anybody seeking to accuse those on one side of the argument of falling into the trap of generally believing that somebody else should pay. There is a respectable argument on both sides of the issue.

The Commission pointed out that for a number of reasons there is a move in the direction of relying more and more on social security. Its members pointed out that it would seem fairer to compensate all those in need rather than to distinguish between those whose needs do and those whose needs do not stem from a particular cause. The hon. and learned Members for Royal Tunbridge Wells and for Montgomery (Mr. Hooson) gave a number of examples which showed that if one were to rely purely on tort some deserving cases would fall on the wrong side of the line. The Commission pointed out that it is sometimes unfair to brand somebody as a wrongdoer and ask him to bear the bill when his fault lay simply in not complying with a standard which the law makes artificially high for a specific purpose.

The Commission pointed out that the social security system is much more efficient because a higher proportion of the resources involved go to compensate the victims, and although there may have been some dispute over the figures quoted by my hon. Friend the Member for Stoke-on-Trent, South I do not think that they destroy his argument.

The Commission pointed also to the delays in the tort system. These factors were recognised by all those who took part in the debate, but I think that there is probably a philosophical difference between those who argued for the virtues of personal responsibility—the right hon. Member for Wanstead and Woodford, the hon. and learned Member for Southport, the right hon. and learned Member for Huntingdonshire (Sir D. Renton) and the hon. and learned Member for Royal Tunbridge Wells, who were all on one side of the division; and on the other side my hon. Friends the Members for Stoke-on-Trent, South, and Mitcham and Morden (Mr. Douglas-Mann), and the hon. and learned Member for Montgomery.

I endorse the point of the hon. and learned Member for Southport that we should not make this philosophical division—it certainly exists, although probably it exists more as an argument about how much weight is attached to one consideration rather than to another—into a brick wall between the two sides. Clearly there are arguments on both sides, and equally clearly they are recognised by those who advance both arguments.

Perhaps the important thing is to resolve two problems, in so far as we can in general terms. First, how shall we try to ensure that there are no needy categories which are excluded from all help? My hon. and learned Friend the Member for Leicester, West (Mr. Janner), my hon. Friend the Member for Stoke-on-Trent, South and the hon. and learned Member for Montgomery gave a number of examples of that. I fear that when one responds to specific needs—all Governments do it, some more assiduously, perhaps, than others—there are bound to arise a number of anomalies and illogicalities. I think that the right hon. Member for Wanstead and Woodford, although critical of the existing system, or lack of it, accepted that. It is difficult to start with an entirely clean sheet and try to bring in all the various categories which, over the years, have manifested their needs.

I do not believe that there is any one simple formula which will include everyone. And I take the point of the right hon. and learned Member for Huntingdonshire that we will never arrive at the stage of being able to compensate for every conceivable misfortune.

The other general problem is whether we are committed now to a parting of the ways, to opting inevitably for one side or the other. The right hon. Member for Wanstead and Woodford referred to the anxieties of some of the disablement organisations. I do not believe that any decisions that we take at this stage commit us irrevocably to one path or the other for all issues and for all time. The Commission, however, took the view that one must retain the tort system, but that probably the publicly financed system will become for the moment, and perhaps for the future, the senior element in this partnership.

Some discussion—though rather less than I had expected—was devoted during the debate to the scheme relating to road accident liability, to which my right hon. Friend the Secretary of State adverted. I was asked by the hon. and learned Member for Southport whether the evidence of the British Insurance Association to the Commission of a scheme alternative to that which was recommended by the Commission was still open. The answer is that the Government are aware of it. It is one to be considered along with others and no one is ruling it out at the moment. The hon. and learned Member will forgive me, obviously, if I cannot say very much more than that.

As an alternative to that scheme, a great deal of attention has been given to the possibility of introducing strict liability within the system of tort. Obviously, there is a great deal which a number of hon. Members could have contributed if time had permitted. Certainly I shall be very happy to hear their views privately.

What is said by people such as my hon. and learned Friend the Member for Leicester, West, the hon. and learned Member for Montgomery and, I think, my hon. Friend the Member for Newham, South (Mr. Spearing) in an intervention is that the law at the moment excludes too many categories on the ground that it was not anyone's fault that they were hurt, or that they could not produce the appropriate evidence, or that someone's recollection was dim, or that it was an illness of a form which had not yet been recognised.

That is the argument on one side. On the other side it is said that if one compensates these categories of people there will be a corresponding burden on someone. We were reminded of the anxieties of some people who have to compete in the commercial field—and admittedly they have to compete competitively—by the right hon. and learned Member for Huntingdonshire, the hon. Member for Canterbury (Mr. Crouch) and the hon. Member for Surrey, North-West (Mr. Grylls).

We have consulted among industrialists. One of the problems at the moment is that industrialists themselves do not seem to be wholly agreed on this matter. Certainly in the field of responsibility for dangerous products, which are to be listed, it is interesting to see how many industrialists agree that there should be a form of responsibility, but we never met one who agreed that his product was dangerous. I have a feeling that we shall find it very difficult to produce a scheme which makes everyone happy.

Mr. Patrick Jenkin

I have yet to hear a lawyer arguing that there should be a system of strict liability for barristers and solicitors.

The Solicitor-General

As a matter of fact, I believe that another place did hear a lawyer arguing exactly that about a fortnight ago. But I agree that those who do so are not very thick on the ground.

In an intervention, my hon. Friend the Member for Newham, South asked to what extent we have looked at the experience of Australia and New Zealand. The answer is that we have looked at it, but I think my hon. Friend will recollect that the Commission itself, in its report, argued that the analogy of, for example, New Zealand is limited in this context because New Zealand has a much smaller population and is predominantly an agricultural country. Therefore one must not be too carried away by analogies. Certainly we shall have them in mind.

The question of Europe has been mentioned and whether we shall wait for Europe. As has already been pointed out, there are already two European schemes. There is the Strasbourg scheme, and there is the directive for which we are waiting from the EEC. They differ on a number of points. Some of the questions were raised by the hon. and learned Member for Southport. Should there be financial limits and should it extend not only to personal injuries but to property? What about the position of those conforming with the state of knowledge at the time when they put the product into circulation? What should the defences be? Should there be time limits?

I fear that there are differences on all these matters. I think that we should like to wait for the EEC directive. We are not committed, necessarily, to waiting—depending upon how long it is in seeing the light of day—but we should like to wait for two reasons: first, because we should like to play our part in the deliberations in Europe on a very important issue; secondly, because the commercial community in this country would not particularly wish to be saddled with a burden which is not shared by some of its competitors in Europe. For both those reasons, although we are not committed to waiting, we are rather given to waiting if we can.

Mr. Percival

If the Government agree with what I said about the time relevant to the state of knowledge, what I had in mind was that it might perhaps be wise if they were to try to get that changed before the directive gets too far.

The Solicitor-General

With that I wholly agree, and with that the Government are certainly in agreement.

Following from the question of strict liability, there was some debate about whether it should be financed by a form of subrogation. The Royal Commission considered subrogation and recommended against it, I think basically on two grounds: first, that having eliminated the fault this would be reintroducing it, and, secondly—and as a concomitant of it for the reason given by the hon. and learned Member for Southport—that the administrative costs and the proportion of the resources which found their way into the pockets of lawyers would escalate substantially if this were introduced. But I can see the arguments for introducing it. These were mentioned by the hon. and learned Member for Montgomery, the hon. Member for Ealing, Acton (Sir G. Young) and my hon. Friend the Member for Mitcham and Morden. That is something which we shall have to have very much in mind.

There was some discussion about the creation of elites. I was hoping to say a great deal about this, about vaccine-damaged children and the mentally handicapped—an interest which I greatly share with the right hon. and learned Member for Huntingdonshire. But now all I can do in this respect is to say something about what was said by the hon. Member for Merioneth (Mr. Thomas). The Government are certainly committed, as was apparent from the Gracious Speech, to trying to introduce some scheme in relation to pneumoconiosis as early as the questions which inevitably fall to be considered can be answered. A working group is sitting at present. It has been sitting for just over six months. I hope the hon. Gentleman will accept that many groups in history have sat for very much longer to face a very much shorter list of issues and problems. But this is not something of which we are unmindful.

I want to say something about the timetable. The right hon. Member for Wanstead and Woodford and my hon. Friend the Member for Pontypool (Mr. Abse) pointed to the importance of these decisions. They said "Care rather than urgency" and that there was no point in taking these decisions unless we got them right. My hon. and learned Friend the Member for Leicester, West said "Care and urgency" and that it was a high price to pay for avoiding errors if one never took a decision at all. All I can say is that we are very mindful of these matters.

Of course, two of the important recommendations in the report have already been overtaken by events. The case of Pickett, decided recently in another place, has already pre-empted for us two of the matters which arise—the question of the lost years and the question of interest on damages. As to the industrial injuries scheme, on which a number of these other matters fall to be decided, consultations are taking place as quickly as possible. With regard to severely handicapped children, my right hon. Friend has indicated that that will fall to be considered within the framework of what he has to decide about all the severely handicapped.

Product liability and strict liability to some extent depend on what happens in Europe, but we promise that that will not be an inescapable cause of delay.

Like every hon. Member who has contributed to the debate, I wish that there were more time. My notes are chiefly remarkable for the number of things they contain which I have not had an opportunity of saying. A large number of issues are raised by this report. In many cases, emotions run high. There are many interest groups to consult. I do not believe that we shall ever arrive at optimum arrangements. This is a continuing process and a continuing discussion. However, the report has made an important contribution and today's debate has made an equally important contribution.

Question put and agreed to.

Resolved, That this House takes note of the Report of the Royal Commission on Civil Liability and Compensation for Personal Injury (Command Paper No. 7054).