HC Deb 26 April 1989 vol 151 cc1033-48
Mr. Flynn

I beg to move amendment No. 104, in page 16, line 13, at end insert (less any amount by which the compensation payment would have been greater but for the contributory negligence of the victim".

Mr. Deputy Speaker

With this it will be convenient to discuss amendment No. 6, in page 16, leave out lines 42 and 43 and insert— `(c) only to the extent that any part of the payment is, or in prescribed circumstances is deemed to be, for a prescribed purpose other than reimbursement for costs incurred in procuring the payment and does not exceed the amount of benefit, determined under subsection (1)(a) above, paid or likely to be paid for the same purpose, but'.

Mr. Flynn

In view of the disagreement that we had on a previous amendment, there is a real prospect of a collapse of understanding between the two sides of the House. It was apparent in Committee that we were not talking about the same thing. Clause 19 is a fine example of how a Government bent on reform will act. We must say a grudging word of congratulation because the Government have tackled an extremely difficult problem. However, if one decides to do that, there is always a great danger that one will make the position worse. In many ways the Government have turned an untidy state of affairs into an unjust one and created chaos out of confusion. In Committee we withdrew an amendment similar to amendment No. 104 so that the Government might think again and so that good sense might prevail. The example given by the Minister in Committee was faulty.

The two areas involved in the clause are the possibility of over-compensation, a dread area of Tory demonology, and the possibility of someone getting away with something, especially someone who is not well off. The Government are worried that someone may gain a few pennies to which he is not strictly entitled. Because state benefits and compensation for accidents are given for different purposes, there is a serious conflict. It is impossible to match the two awards. It is like mixing oil with water. Compensation for damages is awarded for pain, for suffering, for loss of amenity and for loss of standing in the labour market. Social security benefits are paid for different purposes—for additional needs arising from disability or to meet losses that are suffered inevitably because of absence from the labour market.

The objection of the Minister of State to a similar amendment in Committee was that it might result in the dread over-compensation. He gave an example of what he called the perverse result that the suggested system would achieve, citing a case in which compensation was reduced from £10,000 to £5,000 due to contributory negligence and the injured party had received £2,000 in social security benefits. Under the Government's proposal the compensation of £5,000 would be reduced by a further £2,000 so that the Department of Social Security could get its money back and the person would receive £5,000 in total—£3,000 in compensation and £2,000 in benefit. The Minister continued on the same basis: if we follow the line taken by the amendment, the person would end up with £6,000, rather than £5,000. He would be over-compensated in total and the taxpayer would have to make up the difference."—[Official Report, Standing Committee F, 2 March 1989; c. 867.] The Minister was wrong in Committee about the effect of the amendment.

Mr. Gerald Bermingham (St. Helens, South)

Is it not a fact that compensation is meant to pay for the physical injuries that a person has suffered and for the diminution in his earning power? Surely it is not meant to compensate the Government for benefits paid. Would it not be fairer if the Government accepted that compensation is a separate entity and that benefit should continue to be paid? This will clearly be a problem following the Hillsborough disaster.

Mr. Flynn

My hon. Friend has put his finger on the very point that I was about to make. The effect of the amendment would be to reduce the amount of benefit repayable to the DSS by the full amount of compensation lost due to contributory negligence. In the case that the Minister cited, the compensation payment was reduced by £5,000 due to contributory negligence. In those circumstances, the repayment of benefit would not arise unless the benefit amounted to more than £5,000 so that the total amount paid in compensation and benefit exceeded the figure at which damages were assessed. The total amount paid in the case that the Minister cited would be £10,000. None of it would be repayable, so the person would end up with £7,000, not £6,000, but it does not matter whether the total is £6,000 or £7,000 because the person has actually lost £10,000.

I would need visual aids to explain the point properly. If we decide that the loss is £10,000, that is the loss—the total amount of money from whatever source, whether it be security or compensation—which should be paid unless one takes the view that people ought not be compensated for any injury unless someone else was to blame. That is where we get into the strange and difficult interface between two benefits—compensation and social security. Such a decision would be startling and runs contrary to all the principles on which the social security system has always operated. A person who claims benefit as a result of food poisoning does not have to prove that someone poisoned his soup—he has to prove only that he is ill. The same applies to industrial injuries. The whole point of the industrial injuries scheme was to get away from the need to prove that the employer was to blame. If the injury arises from the job, benefit is payable in full whether or not there is contributory negligence on the part of the victim.

The logic of the Minister's argument is that someone who carelessly walks out on the road, is run over and is confined to a wheelchair for the next 40 years would not be allowed to draw income support, let alone invalidity benefit or mobility allowance, because there was 100 per cent. contributory negligence. According to the Minister, any benefit payment would be over-compensation. If that means anything, it must mean that a person has received more than he or she lost as a result of the injury. If that can be proved, there may be a case for the compensator or the DSS to recover part of the money.

Amendment No. 104 seeks to remove from the scope of clause 19 cases in which there is no possibility of over-compensation because the amount deducted for contributory negligence is more than the amount received in benefit. I can anticipate what the Minister will say about the practicalities because unless the compensation is determined by the court nobody will know what precise deduction has been made for contributory negligence. However, we had a great deal of evidence that in many cases the division was not made between compensation and deductions for contributory negligence. The Minister is creating a new situation. It is very much his problem. If he cannot find a solution that is both practical and fair, the recruitment arrangements cannot be operated in a proper way. The Government should accept that they have yet to find the proper answer and abandon the whole proposal.

9 pm

The Minister may also repeat his statement in Committee that the Government proposals were in accord with what Beveridge recommended in 1942. We have had an opportunity to re-read what Beveridge said in his report. The question of contributory negligence, which is crucial to the amendment, is not dealt with but at the end of that section of the report Beveridge wrote: It is not possible in this report to do more than to raise these questions. Considered answers can be given only by inquiry by some Committee with technical and practical qualifications and with time to examine all the detailed areas involved. It is wrong, therefore, to treat Beveridge as the final authority on this matter. In fact the compromise solution adopted in the Law Reform (Personal Injuries) Act 1948 took into account contributory negligence, deliberately departing from Beveridge's very tentative recommendations. We look forward to hearing how the Minister intends to find a solution which makes some practical sense or that he will withdraw the clause.

Amendment No. 6 was again similar to the one at Committee. We ran into difficulties and objections from the Minister, who suggested with some effrontery that it might produce a situation which was "excessively bureaucratic and legalistic". The Government are the authors of the change, so the obligation is again on them to achieve it without injustice. Unamended, the clause will certainly cause serious injustice.

Amendment No. 6 seeks to avoid the taking away of benefit which had been properly awarded and received. As the clause stands, benefits paid for one reason can be recovered out of compensation payments made for an entirely different purpose or even taken out of payments which are not compensation but reimbursement of the victim's costs. In Committee the case of Parry v Cleaver was cited, which provided that one should take away only those things that are like from like.

The amendments that we put to the Committee were unacceptable, but they were not answered fully. The whole basis of the Government's argument is the need to avoid double compensation. If a person suffers an injury and receives social security benefits to compensate for loss of earnings and a payment of damages for pain and suffering, the payments of benefits and damages are for different and mutually exclusive purposes and cannot, therefore, be double compensation.

The Government's proposals might possibly be defensible if all the victims of personal injuries received full compensation through the courts. Social security benefits would then be a kind of interim payment that it would be reasonable to deduct from the final compensation payment. However, in practice hardly anyone gets full compensation. Once again, the question of contributory negligence arises. That can result in the victim receiving partial compensation under a number of different heads of damages. If the whole of the benefits are recovered out of that partial compensation, it can mean, for example, that attendance and mobility allowances are recovered from damages that are paid for loss of earnings. That cannot be right.

The most blatantly unfair aspect of the proposal is the treatment of costs. Whatever justification there may be for recovering social security benefits out of payments of compensation for injury, there can be no conceivable justification for recovering them out of payments of legal costs. Yet the Government not only intend to do that, but actually amended the Bill in Committee to remove any doubt as to their intention. The amendment had the effect of adding to the definition of a "compensation payment" the words: and includes, in particular, so much of the payment as represents reimbursement for costs incurred in procuring it. Amendment 6 would remove those words.

Mr. Bermingham

Has it not always been a fundamental principle of English law that where one succeeds in one's action one is entitled to succeed in one's action for costs? Is my hon. Friend saying that the Government are suggesting that because one is returned to status quo—that is, no costs—they have a lien on the money that one receives and that theoretically one could be put at a loss through winning one's case?

Mr. Flynn

That is precisely the Government's intention, and it will certainly be the effect of the amendment. I look forward to my hon. Friend the Member for St. Helens, South (Mr. Bermingham) making a contribution on that point.

The Minister argued in Committee that there should, in practice, be no problem in that area. The amount to be recovered should fall within the normal payments, excluding costs. That may prove to be true in most cases, but certainly not in every case. There will be cases in which the whole of the compensation payment, including the costs element, will be handed over to the DSS. That is especially likely in cases which take several years to settle, during which a large sum has been paid in benefits and substantial costs have been incurred. In such cases, the victim could end up not only without any compensation, but with a debt for legal fees. A bizarre situation could be created.

On that point as on many others, the Minister's main argument in Committee was that most compensation payments could not be divided into their constituent elements and, therefore, it was impractical to operate the like from like principle. Again, we appreciate the difficulty. That is probably the reason why no one has tackled this for a long time, but if it is impractical to operate that principle, either generally or in relation to cost—if it cannot be made to work fairly—that is no excuse for allowing this ragbag to go forward, which will work unfairly and unjustly and will breach long-established principles of British justice.

Mr. Bill Michie

I want to follow what my hon. Friend the Member for Newport, West (Mr. Flynn) said about tried and tested traditions and the values that we have held in the past. Anyone who has represented people who have had problems through damage to their bodies caused at, for example, work will know that the compensation for victims of accident and disease is calculated on general damages for pain, suffering and loss of amenity; special damages, which are the financial losses calculated up to date of trial or settlement, including loss of earnings; loss of earning capacity, where, for example, the injury puts the victim at a disadvantage on the open labour market; loss of services, where, for example, a mother is unable to perform household duties to the pre-accident extent; and future financial losses, which are, for example, loss of earnings, pension loss and future expenses. All those have been valued in the past, but many are put in jeopardy by the clause.

For the past 41 years, the victim has given credit to the compensator for one half of the value of the relevant state benefit for up to five years from the date of accident, but that is only as against the loss of the earning claim. Under the present proposal, victims will have gross statutory sick pay and the prescribed benefit paid for a period of up to five years—depending on the date of settlement—deducted from the total compensation payment, even if the victim recovers compensation on the basis of less than 100 per cent. compensation. That is the point that my hon. Friend the Member for Newport, West emphasised. It is not as if the victim receives 100 per cent. compensation and value for money. Under the Government's proposals, all victims will be affected, whether they receive 100 per cent., 5 per cent. or 20 per cent. compensation.

I could quote many examples, but I have been asked to be brief to allow other hon. Members to contribute. However, I want to refer to the example of a man who is claiming general damages for pain, suffering and loss of amenities in the sum of £20,000. His special damages include loss of earnings and loss of earning capacity of £5,000. They also include loss of future pension for which he receives £2,000. His pre-accident net earnings were £200 a week. He is off work for two years and receives company sick pay of £150 a week for six months and £75 a week for the subsequent six months. He receives no company sick pay for the second year's absence. He returns to work after two years, suffering a partial loss of earnings of £50 a week for two years. He receives statutory sick pay of £1,260 and sickness and invalidity benefit of £5,000. He also receives a reduced earnings allowance of £4,500 and industrial disablement benefit of £4,000 until the date of the settlement five years after the accident. Due to the serious medical condition, the case is not capable of earlier settlement. As the law stands, before the Bill is enacted, that man's full liability would be £39,140. Under the new set-up, when the Bill is enacted, he will receive £32,390.

As the percentage of compensation is reduced from 100 per cent., the victim receives less. At liability of 25 per cent., the man would receive at least £9,785. Under the new system, he would receive nothing at that level of compensation. It would all he clawed back. We tried to express that problem several times in Committee, but unfortunately to no avail.

There are many injustices in clause 19. One hundred per cent. state benefits paid to victims partially to replace income will be deducted from total compensation. The compensation will be recovered for even part payments for damages. Even if payments are very small, they will still be clawed back until someone is likely to lose more money by making a claim than by not making one.

The better-off victim who receives a fairly decent settlement would not claim social security benefit. However, the poor victim who has nothing must claim benefit, but he is penalised when he claims compensation to which, under the old law, he was entitled.

My colleagues from the Amalgamated Engineering Union have had meetings and discussed these points. We have experience of industrial injuries. The AEU has a great record in that respect. The union is worried that the injustice will affect nearly all compensation claims in the long run. The Government should accept the amendment and, therefore, protect people who are already in a traumatic state as a result of their injuries. Even at this late stage, I hope that the Government will change their minds and accept the amendment.

Mr. Bermingham

I had not proposed to intervene in the debate until I saw the purport of the amendments and the purport of the clause. I should declare a passing interest as I am a member of the legal profession. Over the years I have been involved in many civil settlements, particularly when I was a solicitor in Sheffield.

I do not believe that the Government or the parliamentary draftsmen have any comprehension of how the system of settlement actually works. It is not cut and dried. In the vast majority of agreed settlements, no specific figure is agreed for contributory negligence. We try to find a sum of money to compensate the injured party for the injuries he has suffered. In the old days half the benefits were taken into account in the assessment calculation. However, costs followed the event. If I read the clause correctly—and I hope that the Minister will disabuse me in due course if my interpretation is wrong—all social security benefits will be included in the assessment. Where there has been a finding of contributory negligence, that will lie against the net figure due to the claimant after the deduction for contributory negligence.

9.15 pm

If we had been wise enough years ago to follow the Pearson report on no-fault liability, all these problems would have disappeared. The Government are trying to stretch their clammy hands to claw back any compensation. If someone is injured through the fault of another, that person must be the loser. The state will lose not a penny. The old compensation that would have been paid will no longer flow to the injured party.

The clause even claws back costs. That shows the draftsmens' ignorance and I can say that quite cold bloodedly. They do not seem to understand that in calculating whether to pursue a case the first question that any competent lawyer will ask himself is whether he will succeed in securing some compensation.

Mr. Bill Michie

Is my hon. Friend saying that somewhere in another place they will have a field day because of the legal technicalities and bad drafting?

Mr. Bermingham

My hon. Friend reads my mind perfectly and he knows me well.

Any competent lawyer will say to himself very gently, "Because of the length of the period of the claims to benefit, it may not be worth pursuing the claim." Any competent lawyer will say that he cannot leave his client in a position where, because of the clawback even against costs awarded, even if the client will receive a notional sum in settlement of the claim—for the sake of argument let us say £20,000, with costs of £5,000—unfortunately, because the client has been on benefit for five years, the DSS—and one is tempted to say that the Department is aptly named —will receive all the £25,000 in payment. Effectively the victim will be £5,000 out of pocket simply for pursuing the claim. That is ludicrous. The Government must reconsider.

I will digress a little now because I have an interest in these matters as the hon. Member for St. Helens, South. What will happen to the contributions made to victims of disasters such as Piper Alpha or Hillsborough where many people on Merseyside and from St. Helens were killed or injured? There may be trusts that do not have charitable status and money may be paid out. Will the DSS try to claw back money paid to people who have suffered grievous loss through no fault of their own? Will the Government take their cut from the tragedy?

Mr. Stanley Orme (Salford, East)

That is highly unlikely because of the emotional attitude of people throughout the country.

Mr. Frank Haynes (Ashfield)

Oh, I do not know.

Mr. Orme

My hon. Friend may disagree with me there. However, does my hon. Friend the Member for St. Helens, South (Mr. Bermingham) agree that benefits or payments that are decided and compensation that is set by judges are different from funds connected to major disasters to which my hon. Friend has just referred? There are two standards in our nation at the moment: one for people who are affected by major disasters and will, with the help of their solicitors, quite rightly gain compensation; and one for people who, in industry, lose an arm, leg or hand and are up against a scale of payments which will be charged against the benefits that he or she receives.

Mr. Bermingham

My right hon. Friend makes a fair point. In a major disaster the heart of the nation goes out to the victims and the nation seeks to give generously. I seek a cold-blooded assurance from the Minister tonight that the generosity of the nation will not be used to compensate the cost to the Government in benefit. That would be morally indefensible. I ask the Minister quite bluntly for that assurance tonight on behalf of those people, in Merseyside and elsewhere, who have lost loved ones or have suffered grievous harm. If the Minister wants to intervene and give that assurance I shall be delighted to give way. Many in the nation seek, and have sought, that assurance but, unfortunately, it has not always been forthcoming. In such circumstances, rule books should occasionally be torn up.

Mr. Scott

I was going to deal with the matter in my concluding remarks, but as the hon. Gentleman has raised it, it might be acceptable and sensible to get it out of the way. The clause deals with compensation payments made by, or on behalf of, a person who is liable for an injury. It has nothing to do with charitable payments. Anyone who has seen the response of this country to the Hillsborough tragedy and others that, alas, we have seen recently will know that those are totally different circumstances. The funds relating to such tragedies have nothing to do with the clause.

Mr. Bermingham

I am grateful to the Minister for intervening in that way. Perhaps I should put the question more bluntly. Of course, compensation payments ultimately fall due to the families of those involved in the tragedy who are either injured or dead. If the Minister is assuring me that the Department will have no claim against payments paid out of the Hillsborough disaster fund, I will accept it. The Minister nods, but let us have it straight for the record so that we know exactly where we stand. Will the Minister intervene again and confirm that there will be no claims for the recovery of benefit against money paid from the Hillsborough trust—whether or not it is a charitable trust? I recognise that there is a difference in law between a charitable and non-charitable trust.

Mr. Scott

The answer is an unequivocal yes.

Mr. Bermingham

I am grateful to the Minister for that assurance. I am sure that it will bring some crumb of comfort to those of my constituents who have been grievously injured.

I shall end on a practical note. Have the Minister and his officials cared to think for a moment about the effect of the unamended clause on settlement and damages claims in the courts of our land? It would not be sensible in future for lawyers—either solicitors or counsel—to settle at the current rates of settlement. The clause effectively encourages lawyers to argue further over the degree of contributory negligence, because that will become a material argument in the future. In the past on many occasions settlements have been amicable. It also means that, in future, those who act on behalf of the plaintiff —this may affect my right hon. Friend the Member for Salford, East (Mr. Orme)—particularly in industrial injury claims in non-disaster cases, will no longer allow their clients to settle for the existing sums of money. Those who appear on behalf of the plantiff seek to compensate the injured and return them to the state they were in before the injury. If, in the future, the Department of Social Security is to recover even greater sums, the general level of damages will have to rise.

The Minister and those who advise him have failed to understand that the premiums paid to insurers will equally have to rise to meet the anticipated increased claims. They have failed to realise that premiums have to be paid by the employers and that is an additional cost which forces up the price of the product being made and makes it less competitive.

I know the Minister well. He is an honourable man and I am sure that the clause is not the product of his mind because he is too decent. Those who drafted the clause have not thought it through because it does not go far enough. Even if amended, the clause will effectively increase the cost of products in industry and make us less competitive. We, the general public and the citizens of the United Kingdom will be the losers. This is another example of dogma leading us towards penury.

Sir Michael McNair-Wilson (Newbury)

I shall delay the House for one moment to clarify one aspect of the clause.

First, I want to thank my hon. Friend the Minister for his statement on the Hillsborough tragedy. The item came up on "The News at One" today, and there was a suggestion that the social security department in Sheffield was unsure as to the exact position.

When we were debating the Bill in Committee, my hon. Friend the Minister of State made the point that the object of the clause was to ensure that nobody received double compensation, particularly since social security benefit is paid from public money. I do not quarrel with that. When awarding damages—particularly in cases of medical negligence, although this could equally apply to injury compensation—the payment is made some time, even years, after the event. Will the judge who awards the damages be aware of the social security benefits that have been paid to the person who is to receive the damages, or will he or she presume that what is being awarded is from the date of settlement? Is this really double compensation, or does the compensation for damages given by the judge run from the end of the case, so that the period during which the case was being heard is not necessarily covered by the damages?

I suggest to my hon. Friend that if, as he appears to be arguing, the compensation runs from the date of the injury, it would seem reasonable that the judge should be presented with a figure for the amount of social security benefit already paid to the victim, so that he can allow for it when deciding the final figure that he is prepared to offer in compensation for damages.

9.30 pm
Mr. Scott

I listened with interest and respect to the hon. Member for St. Helens, South (Mr. Bermingham), because he knows something about this area and is a practitioner of the law. He accused the Government of not having thought this through and of having got it wrong. I do not believe that that is right; nor did the National Audit Office, which looked into this, nor did the Public Accounts Committee, which also looked into it; nor have the courts, which have considered this matter, come to a different conclusion from the Government's. They have all come to a view that reflects that of Sir William Beveridge, who stated in his report: An injured person should not have the same need met twice over. He should get benefit at once without prejudice to any alternative remedy, but if the alternative remedy proves in fact to be available, he should not in the end get more from two sources together than he would have got from one alone". That is the principle on which we worked when producing the scheme and when seeking one that was relatively simple to operate.

To answer my hon. Friend the Member for Newbury (Sir M. McNair-Wilson), we shall of course give the courts details of benefits paid up to the date of settlement or award. I shall return to that point later. One reason why much of our discussion in Committee was unsoundly based and why these amendments would have a perverse outcome is that 99 per cent. of settlements take place outside the courts and only 1 per cent. of cases are considered in court. I believe that someone was unkind enough to use the words "horse trading" to describe the negotiations to settle compensation claims. Those engaged in such negotiations would know perfectly well the amount of benefit that would have been available.

The two amendments deal with matters that we discussed in Committee. As far as legal costs are concerned, in schedule 3 we have specifically provided that if, by any chance, someone on legal aid found that his legal aid costs were more than the compensation payment so that the victim was left with a bill, the Department of Social Security would meet any outstanding amounts. It would be intolerable if a very poor person, having resorted to legal aid, was left with a bill to pay. That would be unlikely, but if it happens we have made it perfectly clear in the schedule that the problem would be dealt with in the way I have described.

Mr. Bermingham

Does not the Minister accept that many industrial claims are brought in the name of the trade union, which employs solicitors and covers the costs, because they are its costs? That is one of the benefits of trade union membership. So there is a distinction between a litigant in that position and a litigant in receipt of legal aid.

I think the Minister has missed the point that I was trying to make. Is he saying that the benefit accruing to the union when recovering its costs on behalf of its member is in some way to be laid at the door of the claimant who succeeds in obtaining damages? That would be appalling.

Mr. Scott

I am not familiar with the arrangements between unions and their members for these matters. Unions have funds and their members pay dues in part to cover the costs of this sort of action. If people have a legal aid bill or have employed private lawyers, because so few cases are determined by the courts and there are no heads of agreement on what a settlement is, it is difficult to break down—

Mr. Bermingham

Does not the Minister accept that, even in a friendly case which is settled out of court—a case that does not involve a minor, which would require court approval for a settlement—the successful plaintiff's costs are always paid by the defendant? Therefore, considerable amounts of money that do not belong to the plaintiff become liable to the charge that the Minister seeks to impose in this clause.

Mr. Scott

We have taken the view, which I believe is right, that the benefit paid should be recovered from the settlement. That is what a number of independent people who have looked at the issue said was the right way to go about it, and we are following their advice.

I do not want to teach my grandmother to suck eggs, but it was apparent from what the hon. Gentleman said about extra costs and so on that he has not read the Touche Ross report about how the costs are broken down. I do not accept every figure in the Touche Ross report, but the matter was carefully considered. The Government did not take a leap in the dark. Only after looking carefully at the costs and at the advice that we received from a variety of sources did we decide that this was a fair and sensible approach.

At the moment we have a muddle. The 1948 legislation provided for some offsets against a list of benefits, but the courts have decided that, on a number of other benefits that have been introduced since then, 100 per cent. should be recovered from any compensation payment. That applies not just up to the date of the settlement or award, as we are providing here, but to future entitlement to benefit which can be offset against the settlement that has been made. On balance, some 80 per cent. of victims receiving compensation could find themselves at least as well off as before or even better off, because there is no offsetting of future benefits against this. At the moment benefits are offset for five years, and sometimes ahead of that. On average, 80 per cent. of cases are settled within two and a half years—a pattern that I would expect to continue. In those circumstances, many people will find themselves better off than they would be under the existing system.

The vast majority of these cases are dealt with out of court, with only 1 per cent. being decided by a judge. I think that the hon. Member for Derby, South (Mrs. Beckett) recognised that in some circumstances there may be difficulties in matching heads of damages awards and the payment of benefit. That is a fair understatement of the real problems that face the Department when it has to make great inquiries into the various heads of damages that have been awarded. But the hon. Member for St. Helens, South must know that negotiations continue and the victim is offered a global sum to settle. No calcuation of how that figure has been arrived at is stated. That would be impossible because of the informality.

I do not want to delay the House unduly, but both amendments would be perverse in their effects. They would undermine the simplicity and the underlying fairness of the system that we are introducing, endorsed by Beveridge, the Public Accounts Committee, the National Audit Office and the courts. In those circumstances, I shall in due course be advising the House to reject the amendments.

Mr. Stanley Orme (Salford, East)

The Minister should not use Beveridge and others to justify this move by the Government to reclaim benefits from people who receive only a small amount of benefit in any case. The hon. Gentleman says that he is not sure what the trade unions do. My trade union, the Amalgamated Engineering Union, has spent a great deal of money representing people injured in industry and elsewhere in reclaiming benefits. It has to go to court to do so. Amounts are determined by the judge on the basis on whether the person has lost an arm, a leg, a hand or whatever. We then see other people getting £1 million even though they have not lost any faculty. I assure the Minister that people regard this move by the Government as a gross injustice.

Mr. Scott

I do not agree. Of course anybody who takes any notice of these things will know that there may be a capricious element in the compensation that people get for injury or disease, depending on the circumstances. I cannot put all that to rights in this legislation. I can only follow up what Beveridge recommended. That could not be agreed at the end of the war, but others of great authority have endorsed the principle that people are certainly entitled to benefit in the short term, when they need money immediately to pay their own and their families living expenses. But when, finally, a person is judged to have been guilty, or has accepted liability, the taxpayer, having provided interim support, should not be left with the compensation bill. I believe that that is an unassailable principle. It has been strongly endorsed, and I invite the House to reject the two amendments.

Mr. Flynn

The Minister persists in quoting Beveridge, so I must quote back at him Beveridge's conclusion that it was not possible to do more than raise these questions. Beveridge reached no conclusions whatever; he simply stated the problems. We all agree that one of his recommendations was that there should not be any question of double compensation at anyone's expense—and certainly not at the expense of the social security system. But the Minister has again failed to make the case in answer to our point that, in respct of contributory negligence, there is no question of over-compensation unless the amount is beyond what is decided as the gross amount. If damages are set at £10,000, and the figure is reduced by any amount because of contributory negligence, that is no excuse for trying to bridge the gap by taking away money due in social security benefit.

There is another point that is very revealing. When an event such as the Hillsborough disaster occurs, we all feel bereaved. While we share the grief of the families involved in that, it would be foolish to ignore the tens of thousands of individuals injured just as grievously elsewhere. People just as unfortunate, just as poor and just as badly hurt will lose social security payments in a way that has never been known before.

I am very grateful for the support of my hon. Friend the Member for St. Helens, South (Mr. Bermingham), who rightly pointed out the problems that will occur as a result of this legislation. Of course the amendments that we are proposing are not enough. A whole battery of changes were proposed in Committee. Had they been accepted, they would have improved the Bill greatly and softened its damaging effect. The Minister and the Department are trying to mix two elements, two heads of damages, which cannot be mixed. They are trying to achieve a fusion. While fusion may well have been achieved at room temperature in another area, the fusion that is being attempted here will produce a cocktail so volatile that it will explode in their faces.

We intend to press the amendment to a Division.

Question put, That the amendment be made:—

The House divided: Ayes 158, Noes 277.

Division No. 180] [9.43
Archer, Rt Hon Peter Godman, Dr Norman A.
Armstrong, Hilary Gordon, Mildred
Ashley, Rt Hon Jack Gould, Bryan
Ashton, Joe Graham, Thomas
Banks, Tony (Newham NW) Griffiths, Nigel (Edinburgh S)
Barnes, Harry (Derbyshire NE) Griffiths, Win (Bridgend)
Barnes, Mrs Rosie (Greenwich) Grocott, Bruce
Barron, Kevin Hardy, Peter
Battle, John Henderson, Doug
Beckett, Margaret Hinchliffe, David
Bermingham, Gerald Hogg, N. (C'nauld & Kilsyth)
Bidwell, Sydney Home Robertson, John
Boyes, Roland Hood, Jimmy
Bradley, Keith Howells, Geraint
Bray, Dr Jeremy Howells, Dr. Kim (Pontypridd)
Brown, Nicholas (Newcastle E) Hoyle, Doug
Bruce, Malcolm (Gordon) Hughes, John (Coventry NE)
Buchan, Norman Hughes, Robert (Aberdeen N)
Buckley, George J. Hughes, Roy (Newport E)
Caborn, Richard Hughes, Sean (Knowsley S)
Callaghan, Jim Illsley, Eric
Campbell, Menzies (Fife NE) Ingram, Adam
Campbell, Ron (Blyth Valley) Janner, Greville
Campbell-Savours, D. N. Jones, leuan (Ynys Môn)
Carlile, Alex (Mont'g) Kaufman, Rt Hon Gerald
Clark, Dr David (S Shields) Kilfedder, James
Clarke, Tom (Monklands W) Kirkwood, Archy
Clay, Bob Lamond, James
Cohen, Harry Leadbitter, Ted
Corbett, Robin Lewis, Terry
Cousins, Jim Livsey, Richard
Crowther, Stan Lofthouse, Geoffrey
Cryer, Bob Loyden, Eddie
Cummings, John McAllion, John
Cunlitte, Lawrence McAvoy, Thomas
Dalyell, Tam Macdonald, Calum A.
Darling, Alistair McKay, Allen (Barnsley West)
Davies, Rt Hon Denzil (Llanelli) McKelvey, William
Davis, Terry (B'ham Hodge H'I) Madden, Max
Dixon, Don Marek, Dr John
Dobson, Frank Marshall, David (Shettleston)
Duffy, A. E. P. Martin, Michael J. (Springburn)
Dunnachie, Jimmy Martlew, Eric
Dunwoody, Hon Mrs Gwyneth Maxton, John
Eadie, Alexander Meacher, Michael
Eastham, Ken Meale, Alan
Evans, John (St Helens N) Michael, Alun
Fatchett, Derek Michie, Bill (Sheffield Heeley)
Faulds, Andrew Michie, Mrs Ray (Arg'l & Bute)
Fearn, Ronald Mitchell, Austin (G't Grimsby)
Field, Frank (Birkenhead) Moonie, Dr Lewis
Flannery, Martin Morris, Rt Hon A. (W'shawe)
Flynn, Paul Morris, Rt Hon J. (Aberavon)
Foster, Derek Mowlam, Marjorie
Foulkes, George Mullin, Chris
Fraser, John Murphy, Paul
Fyfe, Maria Nellist, Dave
Galbraith, Sam O'Brien, William
Garrett, John (Norwich South) O'Neill, Martin
Garrett, Ted (Wallsend) Orme, Rt Hon Stanley
George, Bruce Parry, Robert
Patchett, Terry Strang, Gavin
Pendry, Tom Taylor, Mrs Ann (Dewsbury)
Pike, Peter L. Taylor, Matthew (Truro)
Powell, Ray (Ogmore) Turner, Dennis
Prescott, John Vaz, Keith
Quin, Ms Joyce Wall, Pat
Rees, Rt Hon Merlyn Walley, Joan
Richardson, Jo Warden, Gareth (Gower)
Robertson, George Wareing, Robert N.
Rogers, Allan Welsh, Andrew (Angus E)
Sedgemore, Brian Wigley, Dafydd
Sheldon, Rt Hon Robert Winnick, David
Short, Clare Wise, Mrs Audrey
Skinner, Dennis Worthington, Tony
Smith, C. (Isl'ton & F'bury) Wray, Jimmy
Soley, Clive Young, David (Bolton SE)
Spearing, Nigel
Steel, Rt Hon David Tellers for the Ayes:
Steinberg, Gerry Mr. Frank Haynes and
Stott, Roger Mrs. Llin Golding.
Adley, Robert Cormack, Patrick
Alexander, Richard Couchman, James
Alison, Rt Hon Michael Cran, James
Allason, Rupert Currie, Mrs Edwina
Amess, David Curry, David
Amos, Alan Davies, Q. (Stamf'd & Spald'g)
Arnold, Jacques (Gravesham) Davis, David (Boothferry)
Arnold, Tom (Hazel Grove) Day, Stephen
Ashby, David Devlin, Tim
Aspinwall, Jack Dickens, Geoffrey
Baker, Rt Hon K. (Mole Valley) Dicks, Terry
Baker, Nicholas (Dorset N) Douglas-Hamilton, Lord James
Baldry, Tony Dover, Den
Batiste, Spencer Dunn, Bob
Bellingham, Henry Dykes, Hugh
Bendall, Vivian Evans, David (Welwyn Hatf'd)
Bennett, Nicholas (Pembroke) Evennett, David
Benyon, W. Fairbairn, Sir Nicholas
Bevan, David Gilroy Fallon, Michael
Biffen, Rt Hon John Favell, Tony
Blackburn, Dr John G. Fenner, Dame Peggy
Blaker, Rt Hon Sir Peter Field, Barry (Isle of Wight)
Body, Sir Richard Finsberg, Sir Geoffrey
Bonsor, Sir Nicholas Fishburn, John Dudley
Boscawen, Hon Robert Fookes, Dame Janet
Boswell, Tim Forman, Nigel
Bottomley, Peter Forsyth, Michael (Stirling)
Bottomley, Mrs Virginia Forth, Eric
Bowden, Gerald (Dulwich) Fowler, Rt Hon Norman
Bowis, John Fox, Sir Marcus
Boyson, Rt Hon Dr Sir Rhodes Franks, Cecil
Braine, Rt Hon Sir Bernard Freeman, Roger
Brandon-Bravo, Martin French, Douglas
Brazier, Julian Fry, Peter
Bright, Graham Gale, Roger
Brown, Michael (Brigg & Cl't's) Garel-Jones, Tristan
Bruce, Ian (Dorset South) Gill, Christopher
Budgen, Nicholas Gilmour, Rt Hon Sir Ian
Burns, Simon Goodson-Wickes, Dr Charles
Burt, Alistair Gorst, John
Butcher, John Gow, Ian
Butler, Chris Grant, Sir Anthony (CambsSW)
Butterfill, John Greenway, Harry (Ealing N)
Carlisle, John, (Luton N) Greenway, John (Ryedale)
Carlisle, Kenneth (Lincoln) Gregory, Conal
Carrington, Matthew Griffiths, Peter (Portsmouth N)
Carttiss, Michael Grist, Ian
Cash, William Ground, Patrick
Chalker, Rt Hon Mrs Lynda Hague, William
Channon, Rt Hon Paul Hamilton, Neil (Tatton)
Chapman, Sydney Hanley, Jeremy
Clark, Dr Michael (Rochford) Hargreaves, A. (B'ham H'll Gr')
Clark, Sir W. (Croydon S) Hargreaves, Ken (Hyndburn)
Clarke, Rt Hon K. (Rushcliffe) Harris, David
Conway, Derek Hawkins, Christopher
Coombs, Anthony (Wyre F'rest) Hayes, Jerry
Coombs, Simon (Swindon) Hayward, Robert
Cope, Rt Hon John Heathcoat-Amory, David
Heddle, John Mudd, David
Hicks, Mrs Maureen (Wolv' NE) Neale, Gerrard
Higgins, Rt Hon Terence L. Nelson, Anthony
Hill, James Neubert, Michael
Hind, Kenneth Nicholls, Patrick
Holt, Richard Nicholson, David (Taunton)
Hordern, Sir Peter Nicholson, Emma (Devon West)
Howard, Michael Norris, Steve
Howarth, Alan (Strat'd-on-A) Oppenheim, Phillip
Howarth, G. (Cannock & B'wd) Paice, James
Howe, Rt Hon Sir Geoffrey Parkinson, Rt Hon Cecil
Howell, Ralph (North Norfolk) Patnick, Irvine
Hughes, Robert G. (Harrow W) Patten, Chris (Bath)
Hunt, David (Wirral W) Pawsey, James
Hunt, John (Ravensbourne) Porter, Barry (Wirral S)
Hunter, Andrew Porter, David (Waveney)
Irvine, Michael Portillo, Michael
Irving, Charles Powell, William (Corby)
Jack, Michael Price, Sir David
Jackson, Robert Raff an, Keith
Janman, Tim Raison, Rt Hon Timothy
Johnson Smith, Sir Geoffrey Redwood, John
Jones, Robert B (Herts W) Rhodes James, Robert
Jopling, Rt Hon Michael Riddick, Graham
Kellett-Bowman, Dame Elaine Ridsdale, Sir Julian
Key, Robert Roe, Mrs Marion
King, Roger (B'ham N'thfield) Rost, Peter
King, Rt Hon Tom (Bridgwater) Rowe, Andrew
Kirkhope, Timothy Ryder, Richard
Knapman, Roger Sackville, Hon Tom
Knight, Greg (Derby North) Scott, Nicholas
Knight, Dame Jill (Edgbaston) Shaw, David (Dover)
Knowles, Michael Shaw, Sir Giles (Pudsey)
Knox, David Shaw, Sir Michael (Scarb')
Lamont, Rt Hon Norman Shelton, Sir William
Lang, Ian Shephard, Mrs G. (Norfolk SW)
Latham, Michael Shepherd, Richard (Aldridge)
Lawrence, Ivan Shersby, Michael
Lee, John (Pendle) Sims, Roger
Lennox-Boyd, Hon Mark Skeet, Sir Trevor
Lester, Jim (Broxtowe) Smith, Tim (Beaconsfield)
Lightbown, David Soames, Hon Nicholas
Lilley, Peter Spicer, Michael (S Worcs)
Lloyd, Sir Ian (Havant) Stanbrook, Ivor
Lloyd, Peter (Fareham) Stanley, Rt Hon Sir John
Lord, Michael Stern, Michael
Luce, Rt Hon Richard Stevens, Lewis
Lyell, Sir Nicholas Stewart, Allan (Eastwood)
McCrindle, Robert Stewart, Andy (Sherwood)
Macfarlane, Sir Neil Stradling Thomas, Sir John
MacKay, Andrew (E Berkshire) Sumberg, David
McLoughlin, Patrick Summerson, Hugo
McNair-Wilson, Sir Michael Tapsell, Sir Peter
McNair-Wilson, P. (New Forest) Taylor, John M (Solihull)
Madel, David Taylor, Teddy (S'end E)
Major, Rt Hon John Tebbit, Rt Hon Norman
Mans, Keith Thompson, D. (Calder Valley)
Maples, John Thompson, Patrick (Norwich N)
Marland, Paul Thornton, Malcolm
Marlow, Tony Thurnham, Peter
Marshall, John (Hendon S) Townend, John (Bridlington)
Martin, David (Portsmouth S) Tracey, Richard
Maude, Hon Francis Tredinnick, David
Maxwell-Hyslop, Robin Trippier, David
Mayhew, Rt Hon Sir Patrick Twinn, Dr Ian
Mellor, David Waddington, Rt Hon David
Meyer, Sir Anthony Wakeham, Rt Hon John
Miller, Sir Hal Walden, George
Mills, Iain Walker, Bill (T'side North)
Mitchell, Andrew (Gedling) Walters, Sir Dennis
Moate, Roger Ward, John
Monro, Sir Hector Wardle, Charles (Bexhill)
Montgomery, Sir Fergus Watts, John
Moore, Rt Hon John Wheeler, John
Morrison, Sir Charles Whitney, Ray
Morrison, Rt Hon P (Chester) Widdecombe, Ann
Moss, Malcolm Wilshire, David
Moynihan, Hon Colin Wolfson, Mark
Wood, Timothy
Woodcock, Mike Tellers for the Noes:
Yeo, Tim Mr. Tony Durant and
Young, Sir George (Acton) Mr. Stephen Dorrell.
Younger, Rt Hon George

Question accordingly negatived.

Amendments made: No. 26, in page 16, line 44, at end insert— 'compensator", "victim" and "intended recipient" shall be construed in accordance with subsection (1) above;'.

No. 11, in page 16, line 44, at end insert— 'costs", in relation to proceedings in Scotland, means expenses;'.—[Mr. Peter Lloyd.]

Forward to