§ Order for Second Reading read.
§ 9 40 am
§ Mr. Lawrence Cunliffe (Leigh)
I beg to move, that the Bill be now read a Second time.
I should like to place on record my appreciation and gratitude to all those who assisted in drafting the Bill, especially Mr. Henry Witcomb, who helped me in a first-class manner and who represents the noble cause promoted by Citcom. I should like to thank also the Bill's sponsors, many of whom are well known for fighting for civil justice. Special mention must be made of my right hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley), who has made a long and sincere contribution to this work.
When the Citcom initiative, which was promoted by Lord Scarman, came into being, the Prime Minister said that the campaign's contribution to reform would be highly valued. I hope that the Bill, which at this stage is non-controversial and which has the Prime Minister's benediction, will be debated fully. Its purpose is to deal with what some of us have felt for many years is a neglected aspect of personal injury and compensation awards.
The Bill deals with the enormous difficulties that injured people face, through no fault of their own, in seeking compensation. It is increasingly necessary that people who suffer injury because of our high-risk society should be able to achieve fair and prompt compensation at a reasonable cost. Far too often constituents have to come to our advice centres and surgeries because they believe that they have a genuine case for compensation but are deterred by legal costs and the time needed to institute litigation. This confuses ordinary people. Indeed, many are extremely distressed because the way is not clear to seek genuine awards for their personal injuries. Injured people have to overcome a bewildering range of problems. It has rightly been termed an obstacle course. They face difficulties in financing their cases and finding the right legal advice and, finally, in obtaining proper compensation.
I should like to highlight two cases that deal with the desperate need for competent and specialised advice. Only a few legal firms and representatives are available to deal specifically and exclusively with such personal injury matters as assessing pay, suffering and loss of quality of life.
§ Mr. Andrew Rowe (Mid-Kent)
Before the hon. Gentleman moves on to the examples to bolster his case, will he say whether he agrees that the present system builds in a considerable incentive to those who do not wish to pay compensation to drag out every aspect in which they are engaged in order to prolong the obstacle race that these poor people must run?
§ Mr. Cunliffe
That is an important point. As I progress through my case, we shall see that the hon. Gentleman's comments are extremely relevant.
My first case is that of Keith Blackburn, who suffered brain damage as a result of a medical accident. His case 512 was finally resolved in August last year after a 12-year fight against the health authority responsible. His parents, who sued on his behalf, used three solicitors before finding a fourth firm capable of taking on the case. Another case was decided less than two weeks ago, when the judge described it as a "scandal" that a woman had had to wait nine years before receiving a reward for damages. He has asked the solicitors involved to return to the court to explain the delays.
There are cases that make obvious the acute need for specialisation in medical negligence and personal injury matters. I welcome the Lord Chancellor's recognition of the need to tackle the problem. Much more needs to be done to avoid delays.
Another problem that recently came to my attention is the huge delay caused by slow administration of the legal aid scheme. Last November a High Court judge criticised that "deplorable state of affairs". He said that the legal aid headquarters kept its doors locked to prevent any callers making inquiries because it was so badly underfunded. That is an outstanding disgrace and an indictment of our system and society. Delays can mean that an injured person must wait more than three months without knowing even whether he or she will have the means to start the tortuous process of suing. In addition, there are all the other delays that plague the system. It can take between three and six years for the average case to be completed.
I am pleased to be a supporter of the Citizen Action Compensation Campaign. As Lord Scarman said, it seeks to put the strength of popular demand behind learned and reasoned argument for law reform. We need to speed up the processes in a matter which has been neglected and in which expertise has been lamentably short. It is imperative that we concentrate on improving matters.
We remember Mr. Justice Hirst and the tragic cases involving the drug Opren. The figures are printed on my heart because some of my constituents, mainly elderly people, were involved. There were 1,354 proven claimants who received, on average, the paltry and insulting sum of £1,800 each and who had a hundred legal representatives involved in fighting the claims. Our American counterparts, who submitted 104 claims, received £25 million in total. There is no financial justice in that. It is ridiculous and a personal insult, especially in a country which talks of building from Parliament into our judicial system a form of compassion based on Christian ethics.
Mr. Justice Hirst said:As I have said more than once during the course of the Opren case, both the assessors and the courts have been obliged to base their awards on levels of damages established by precedent, which is binding in law. There is nothing wrong with critics questioning or condemning these levels, so long as they recognise that only Parliament can change them.That is the initiative that we are trying to take today. Mr. Justice Hirst continued:So long as the present levels remain in force, the Courts have no alternative but to apply them.There is a challenge to the House contained in those words. It is a challenge that I urge the House to take up by allowing the Bill a Second Reading.
I want to comment on some of the rather horrifying and emotional cases. Hon. Members may have read recently of the case of a young woman in the Greater Manchester area, in which my constituency is located. She underwent a horrific ordeal in an operation to deliver her second child by caesarian section. She woke up 10 minutes into the 513 operation and, although she was unable to move a single muscle, she was fully conscious throughout the next 40 minutes of an excruciatingly painful operation.
For the past nine years she has suffered deep psychological problems, ranging from insomnia and agoraphobia to a deep-seated fear of ever becoming pregnant again. She has also had to relive the experience time and time again in interviews with doctors and psychiatrists in pursuing her claim against the health authority. She says that she does not go one day without remembering the experience. Last year she received an out-of-court settlement of £7,500 for her pain, suffering and loss of quality of life. Her solicitor, who is handling 60 similar cases, said that settlements have been based on the first case, for which a woman was awarded £12,000 by a judge.
Few solicitors are likely to deal with more than one such case, so they have little information on which to base an assessment of compensation. That is unbefitting for a system that is intended to achieve justice for ordinary people.
There are problems in different parts of the country and in Scottish law. A woman from Stirlingshire, who had an operation to sever the nerves close to her kidneys, underwent a similar experience. The health authority offered her £2,400. Her solicitor told her that he had no experience of such injury cases and that she would have to make up her own mind about whether she accepted the offer. Fortunately, she fought on and finally settled for just over £5,000. I and many others are concerned that such levels are not realistic.
As an aside, I must tell the House that I read with alarm clause 18 of the Social Security Bill, which is currently in Committee. In effect, clause 18 will claw back some of the awards given in cases of pain, suffering and loss of quality of life. Under the clause, any form of benefit payments will be offset against awards and will be clawed back and put in the Government's coffers. Such a provision would apply to sickness benefit, invalidity and any other benefits paid as a result of injuries from an accident or incident.
There are few specialised legal firms with expertise in such compensation, but there are some that are quite expert. The firm of Robert Thomson in Glasgow has just handled the case of a man who lost 50 per cent. of the use of his right hand through an accident at work. He was offered £13,000 which he was recommended to accept. Meanwhile, he had received Department of Social Security benefits totalling £18,000. Under the proposed system, he would receive nothing because any compensation would be swallowed up by payments back to the Department of Social Security.
§ Mr. Kevin Barron (Rother Valley)
I have a case on my desk upstairs in which a constituent was given £2,600 for an injury she had received while working for the National Health Service. The Department of Social Security is currently claiming back £1,500 to cover a period back to June 1985 because she was on supplementary benefit and income support during that time. I am fighting that matter with the Department.
§ Mr. Cunliffe
It is detestable for the system to operate in that way. The logic of contributing national insurance payments is that they are an investment for times when things go wrong or for specific benefits such as pensions. We cannot allow such a provision. To say that in 514 supporting my Bill one would be allowing the payment of double compensation is nonsense. If one has contributed into a fund, one has the right, when the time arrives, to receive payments from the fund. Such benefits and compensation awards are wholly separate.
§ Mr. Stanley Orme (Salford, East)
It is a question of natural justice. A person receives benefit from the state while pursuing the case, and if the courts decide that compensation should be given to the person, that has nothing to do with state benefit.
§ Mr. Cunliffe
My right hon. Friend is right. We are dealing with a non-political issue. All hon. Members today want to give their maximum attention to the debate and did not envisage that such an anomaly might be created by the Government in the Social Security Bill. The Bill will have a direct and adverse effect on the matters that we are discussing today and on the benefit system.
Judgments seem to be made on the basis of size and importance in many respects. Let us consider the disasters recently experienced on land, at sea and in the air. The details are too numerous to describe and I regret that I have to quote these cases, but we should consider the spectacular cases, which are highlighted in terms of the numbers involved and their significance to the people of this country. Such incidents receive greater attention and the victims receive far better financial treatment from the courts. Following the Piper Alpha and, to some extent, the King's Cross and Clapham disasters, large settlements were reached under the full glare of publicity. The fact remains, however, that in everyday cases compensation is still based on Kemp and Kemp, and Kemp and Kemp is about precedent and the sums awarded have been all too low.
Mr. Justice Hirst claimed that the problem was one of precedent awards dictating the level of compensation for the cases that followed. I hope that the Lord Chancellor and the Solicitor-General will take note: the only answer is to break the vicious circle, and my Bill would do much to achieve that.
There seems to be some confusion surrounding the establishment of the Compensation Advisory Board. The board will recommend levels of compensation to be awarded to injured persons for pain, suffering and loss of quality of life. It will be an advisory body. The judiciary is crying out for a lead in this matter, because it realises that sums paid in bereavement damages and in compensation for pain and suffering are derisory. But the judges' hands are tied because they work within the guidelines laid down by the House. The Compensation Advisory Board will draw up more highly sensitive and up-to-date guidelines, which will offer judges flexibility and the option of making awards of the kind that they would like to make now.
The board will consist of no fewer than eight and no more than 11 members appointed by the Lord Chancellor after consultation with relevant organisations. For obvious reasons, it will include one medically qualified person specialising in the rehabilitation of injured persons. It will include one clinical psychologist specialising in the counselling of injured persons. It will include two persons with experience of personal injury litigation—a practising solicitor and a practising barrister or advocate. Finally, it will include four persons appointed after consultation with 515 voluntary organisations that provide advice or services to injured or disabled persons. There will be three spare places on the board.
Let me stress the importance of voluntary organisations being represented on the board. Our whole legal system benefits from public input in the form of the jury system. The Bill seeks to strike a balance on the board between experts and the public. Perhaps there is no such thing as a perfect balance, but we have tried to attain the happy medium in determining the composition of the board to advise the Lord Chancellor. We shall be quite happy to consider any improvements in that composition which may be suggested in Committee, but the principles must first be established that the board must consist of individuals who are aware of the effects of disability and that it must include strong lay and public representation.
We could perhaps have speeded the process, but as the Bill stands, the board will be expected to recommend compensation levels appropriate to injuries in a number of classes listed in schedule 2 within a year. Its recommendations will be published by the Lord Chancellor. Those recommendations will come into force and be used by the courts one year after publication. We have allowed for a one-year gap for a reason. Some have criticised the Bill on behalf of the insurance companies, but the one-year gap has been included to allow the insurance business time to adjust its premiums accordingly.
§ Mr. Orme
Does my hon. Friend agree that the brief that the insurance companies have distributed to hon. Members is outrageous? After all the money that people have paid into insurance companies, those companies are not prepared even to consider my hon. Friend's suggestion, even though he is going out of his way to allow them to adjust over the first 12 months. I am sure that all hon. Members will find the insurance companies' brief unacceptable.
§ Mr. Cunliffe
My right hon. Friend has made a valid point. I was astonished by some of the things that the insurance companies said in their brief. I do not know why they are so afraid of the Bill. Anyone would think that the directors of the insurance companies would be paying the money out of their own pockets. I am sure that there will be no deduction from their salaries if they accept the reasonable compromise that is proposed. I do not seek deliberately to hack up insurance companies or to threaten their viability. As I have said from the beginning, the Bill is non-political in character. We want financial justice for injured persons, and we want them to have easy access to financial justice. The insurance companies' fears that pay-outs will go through the roof are unfounded.
§ Ms. Jo Richardson (Barking)
I hesitate to interrupt my hon. Friend's train of thought, but I am not clear whether the Bill would apply to people who have worked in firms using asbestos, some of whom die from asbestosis. I see that hon. Members are nodding; I am very relieved to hear that the Bill will apply in such cases. An asbestos firm in my constituency has left a trail of death behind it. There has been some limited compensation in the form of benefits from the Department of Social Security, but I am interested to know whether the Bill will also help those affected.
§ Mr. Cunliffe
My Bill would certainly help them, although we must see what happens to clause 18 of the Social Security Bill. The asbestos industry has been suspect for many years and the trade unions have fought hard to gain recognition of the problem by the industry and to obtain for their members benefits and awards for industrial disablement. Some awards have been made, and I intend to ensure that the Bill protects and shelters those described by my hon. Friend the Member for Barking (Ms. Richardson).
We intend that the review of recommendations should be made as quickly as possible. The Lord Chancellor will be placed under a duty to increase levels of compensation in line with increases in the retail prices index. That is important. Damages are awarded on the basis of the assessment of a working life span, and the courts have always expected the recipients of fairly substantial awards prudently to invest the money to guard against the effects of inflation. I do not want to comment on inflation today; that would be too political. The Bill will, however, contain a built-in protection against it which is reasonable and fair. I am sure that the House will be happy to accept such protection.
I do not pretend that the Bill will solve all the problems of those who seek compensation, but it is a reasonable step in the right direction. The board will represent a balance of interests. Its members will have a deep knowledge of what disability means and it will be able to provide an input from the public in the process of deciding what compensation people should receive. People find it disconcerting and confusing that juries should award compensation in defamation cases but not in the far more important matter of personal injury. Recently, we have all had classic illustrations of that. We have seen awards of between £300,000 and £1 million basically for injured reputations. Compared with those awards there have been mean, niggardly and miserly amounts awarded for injuries and bereavements. That is illogical. We need compassion in our system of awarding money for personal injuries.
Just a few weeks ago, Mr. Justice Otton, a well respected High Court judge, spoke to an international conference of lawyers. He said that he would like to import from the American system the power occasionally to order a civil case to be heard by a jury in order to see what damages it would award. I would not go too far about imports from America, but that one seems useful. Judge Otton said that thiswould probably mean an uplift of all our damages which many people feel are far too low.
§ Mr. Menzies Campbell (Fife, North-East)
Is the hon. Gentleman aware—it is not commonly known in England—that in Scotland a person seeking damages for personal injuries is entitled to a civil jury trial?
§ Mr. Cunliffe
I am aware of that, and later in my speech I shall deal briefly with the Scottish law because its damages awards are far better than ours. I thank the hon. and learned Gentleman for drawing that to the attention of the House.
My belief that juries would award higher levels of compensation is borne out by awards made by juries in Northern Ireland. Before their abolition in August 1987, in the Welsh v. Union Installation case, an asbestosis case, the defendant's and the claimant's lawyers fixed a 517 settlement of approximately £50,000 based on their calculation of previous judge-based decisions. The case went before a jury and the claimant was awarded £76,000.
The trend of high jury awards is not only to be found in Northern Ireland because recently a Scottish jury awarded an injured woman £15,000 even though the appeal court ruled that a judge would have awarded only £10,000. There is some merit in the public input being part of a jury system. Both of the cases that I have quoted showed an increase of 50 per cent. on what a judge would have awarded. It should be remembered that a jury knows that if it awards too much its decision can be overturned by an appeal court. The more public input into the process the better, and my proposed board will provide that without running the risk of greater uncertainty in the system that would occur if civil juries were reintroduced.
§ Mr. Geoffrey Lofthouse (Pontefract and Castleford)
My hon. Friend has spoken about insurance. The insurance companies say:The higher level of welfare provision in the United Kingdom also needs to be borne in mindand supplementary benefits should be taken into account. Does that mean that supplementary benefits equate to pain and suffering?
§ Mr. Cunliffe
That is the yardstick that they seem to be using and obviously they have no scruples because some of the letters that I have received from insurance companies are precisely in line with what my hon. Friend has just said.
As I have said, in both the cases that I quoted there was a 50 per cent. increase in the awards. I have no desire to see in Britain the high awards that are often made in the United States. The responsibility for compensation guidelines would be in the hands of the well balanced and independent board that the Bill seeks to set up. The board would decide on compensation.
Unlike the United States, we do not have a system of contingency fees or punitive damages, both of which can result in a jury making huge awards to victims. Any fears that the introduction of the board would lead to grossly inflated awards will prove to be unfounded. I say to our friends in the insurance industry that that appears to be the case. The board's recommendations would provide courts and solicitors with a sensitive, up-to-date and comprehensive guide to compensation levels.
I emphasise that the board's recommendations would be advisory and that the final award would still be left for the judges to decide in the light of the facts of each case. The board would lead to a better match of injury to compensation, greater consistency in awards and speedier settlements, which is what we all need. At present, people have to endure four, seven or 11 years of going through the system, and that is atrocious. We need speedier settlements and lower costs. Some hon. Members, and possibly the Government, are worried about costs, and we can have a look at that issue.
The Bill will also tackle another problem that has troubled many people for years. It is the calculation of an injured person's compensation for loss of earnings and the cost of any medical care that may be required. In order to make such a calculation, the courts need to know about such matters as the average life expectation of a person having the same characteristics as the claimant and how long he might have been likely to remain in work had he 518 not been injured. They also need to assess the prospects of a claimant remaining in good health. Many people think that the present system is about the best that we can get.
The first and most important matter to be decided is average life expectancy, and that judgment is made by the experts in the actuaries' profession. Once that has been calculated, the basis for the compensation to an injured person is established. Other factors, such as the possibility of ill health, can be dealt with as secondary issues, but the basis must be right. The courts have insisted on applying an alternative method of assessment which involves a judge making an informed guess about the likely working life of a claimant and then deducting an amount for the possibility of ill health or unemployment. A judge has the right to reduce the award on the basis of high unemployment in a claimant's area. A 20 per cent. level of unemployment can lead to the risk of a deduction in the award and the judge can consider that.
The estimation of a person's life expectancy is carried out by actuaries. The existing method of assessing damages simply does that which actuarial methods do but does it less scientifically and accurately.
§ Mr. John Garrett (Norwich, South)
Is my hon. Friend aware of the humiliation that victims suffer in court when they hear barristers debating their life expectancy?
§ Mr. Cunliffe
That is obviously an emotional issue, and people who have to endure that sort of searching out and assessment suffer psychologically. In some cases, a claimant's health has deteriorated simply because of that type of assessment. My hon. Friend makes a valid point.
We all agree that the actuarial method is not foolproof. However, it is more likely to be accurate than the method that has been evolved by the courts. Under the actuarial method, claimants would be less likely to be under-compensated and therefore find themselves running out of money with several years left to live. Such things happen. If the life expectancy has been wrongly assessed, the victim can be left to struggle for perhaps the last 10 years of his life.
I emphasise that the present system has been criticised by the Law Commission and the Pearson Royal Commission, which reported that in the majority of cases no method of lump sum calculation could achieve mathematical perfection. Of course, we accept that, but use should be made of the practical assistance that mathematics can provide. The Law Commission recommended that the courts should have regard to actuarial evidence and drafted a clause for inclusion in a Bill. The provisions of my Bill are based on that clause. There is no division on this point.
Even more importantly, a set of actuarial tables was produced in 1984 by a working party of lawyers and actuaries, chaired by Sir Michael Ogden QC. The working party was composed of representatives of the Law Society, the Law Society of Scotland, the Bar Council, the Faculty of Advocates, the Institute of Actuaries and the Faculty of Actuaries in Scotland. It unanimously recommended that the tables should be used in personal injury cases. However, almost immediately a judge held that the tables could not be used.
I accept that actuarial evidence will not ensure complete financial security for an injured person, but it is more likely to do so than the present system. Furthermore, it would not greatly increase the cost of litigation. In more complex 519 cases it may be necessary to call an actuary in person, but in the majority of cases the actuarial tables will be all that is necessary. If a more sophisticated and accurate method is available for judges to use in such cases, I believe that it should be used. My supporters and I claim that my Bill could be the basis for achieving that.
The Bill would also reform the present law on bereavement damages which cries out for a more realistic assessment. In my view, the present system of awarding damages is wholly unrealistic. Bereavement damages in England and Wales are governed by the Fatal Accidents Act 1976. The maximum limit on the amount of damages recoverable is £3,500 per death. Can anyone say in all fairness that such a niggardly figure should apply today to compensate for the pain, suffering and the quality of life of a bereaved person?
Some people argue that, because the loss that a bereaved person suffers is beyond all assessment, there should be no award or compensation for bereavement. I cannot see the logic of that. No one wants to gain from bereavement. It is not calculated by people. The bereaved are not motivated to try to gain the maximum amount of money. However, society must recognise that the victims must not be denied recognition in our judicial system. We must say, "Society has inflicted this on you and you have the right to claim compensation."
It is true that damages can never adequately compensate for the loss of a member of one's family, but just because it is difficult to compensate does not mean that we should not try. That is the point that my Bill recognises. If the bereaved believe that financial compensation will help them to recover from a tragedy, they should be allowed that compensation as a right. They should not have to choose whether to claim that compensation; their choice should be simply how to apply the compensation that they receive.
Although I can understand the argument that, because it is difficult to compensate for such a loss, the award should be nominal, many ordinary people find it incomprehensible that at present the sums awarded for fatal injuries are substantially less than awards for less serious injuries.
I have recently learned of the case of a father who lost his 11-year-old daughter as a result of the negligence of their local general practitioner. After a five-year fight, the father received £3,500 in compensation, plus £252 in interest and £616 for funeral expenses in an out-of-court settlement. He said that he fully appreciated that it would be difficult to put a price on his daughter's life, but that he felt that the statutory amount was insulting and derisory. I am sure that the House recognises that there is a valid case for increasing bereavement damages.
What can we say to the woman who lost several members of her family in the Bradford fire tragedy? She is bitter and angry that the law is so ludicrously inadequate. What can we say to the man who stands to receive only £1,500 for the loss of his wife who was one of the 153 people who received overdoses of radiation in the radiotherapy dept of the Royal Devon and Exeter hospital in 1987?
Evidence shows that the public feel that the current levels of compensation are unacceptably low. That was borne out in the recent out-of-court settlements for the 520 Zeebrugge, King's Cross and Clapham disasters, when the defendants felt that it would be unconscionable to pay the statutory maximum and paid instead almost three times that amount to the bereaved. As I said earlier, the amounts awarded seem to depend on the size of the tragedy, the number of people involved and the sensational reports given in the press and media. The awards seem to be based on subjective views rather than logic.
The sums awarded should not be unreasonable and they should certainly not be derisory. The Bill therefore seeks to increase the minimum figure to £10,000 for each claimant with a ceiling of £50,000 for each death. I know that there is an argument that damages for bereavement should be unlimited, but that would make the size of an award dependent on the bereaved person having to prove the extent of his or her grief, or the closeness of the relationship with the deceased. As I said earlier, such investigations would increase people's grief and run counter to the aim of the award.
The Bill will also place a minimum award on "loss" damages, which are known as the "loss to society" damages in Scotland. In addition to increasing the amount of damages that could be awarded, the Bill will extend the categories of people who could claim such damages from the narrow categories of spouses and the parents of children who are unmarried and under 18 to spouses, parents and children and to any other person whose relationship with the deceased was substantially the same as that of a spouse, parent or child.
Again, it is a matter of judgment, and not necessarily of logic. However, many people are distressed when they realise that children are prevented from claiming for the bereavement of a parent under existing law. Why should not a claim be made for a child's bereavement? Does a child not feel bereavement? A child can feel as much loss as anyone else and the parents are the whole world to the child.
Only this morning I received a letter from a mother who said:Its 1.30 in the morning; the price we pay for the loss of a child is loss of normal responses to life; sleep being one of them. Since my 23-year-old son was killed in a road accident 2 years 7 months ago my life has changed completely.She goes on to describe the emotional feelings and response to grief which bite into the family's way of life. It is a long letter in which she also says:The loss to me and my husband of this only son is not calculable in monetary terms but to get nothing, not one penny, not even funeral expenses, because he was over 18 is an intolerable insult.It is absurd that Scottish law provides a wider scope for claiming such damages. Under the Damages (Scotland) Act 1976, spouses, parents, children, a person accepted by the deceased as a child and any person who was immediately before the deceased's death living with the deceased as husband or wife can claim damages. It is unacceptable that if an English or Welsh family travels over the border to Scotland and has a fatal accident claims can be made by people who would be prevented from doing so in England and Wales. I commend the Scottish system. I would not want to devalue it in any way. It is a far better and more justifiable law than we have in England and Wales.
I accept that these proposals will require detailed examination in Committee. Today I wish to establish the principle that there must be uniformity between English and Scottish law. My Bill will provide the impetus in an 521 area where there has been a woeful lack of action. I do not pretend that it is anything but a start in improving the quality of justice for those seeking personal injury compensation. It addresses several of those problems. I feel sure that it will start much wider reforms in this area. I understand that a civil justice review is taking place under the auspices of the Lord Chancellor. I am sure that when he replies the Solicitor-General will enlighten the House on that and say that it will embrace some of the elements that I seek to introduce by the Bill.
My Bill and today's debate pursue a clear negotiable course towards bringing a far better system of justice in terms of compensation and access to justice. One must concede that individual access to our system of justice is prohibitively expensive. It is difficult to obtain justice, and the result hardly warrants the risk and worry because of the derisory sums involved. In that respect we have a rich man's law. We cannot allow that to continue. There are better ways which must be our ways. The House must find a better way of solving this burning, emotional and passionate problem.
§ Mr. Roger Gale (Thanet, North)
It gives me great pleasure to support the hon. Member for Leigh (Mr. Cunliffe) in what he rightly describes as a wholly non-party political measure. I congratulate him on using his luck in the ballot to introduce a Bill is long overdue. It has the support of more than 200 hon. Members who have backed Citizen Action and come from all political parties. I should like to thank my noble and learned constituent, Lord Scarman, who is the president of Citizen Action, for his advice and for the benefit of his considerable wisdom in helping me to form my views on these reforms.
The Bill is only the beginning, certainly not the end, of a package of reforms. It will pave the way for the nationally underwritten, no-fault compensation scheme which many hon. Members wish to see. The establishment of a Compensation Advisory Board and a nationally recognised scale of compensation are prerequisites for a no-fault scheme. Only that will finally remove the sort of injustices to which the hon. Member referred in cases such as the tragedy of Keith Blackburn.
The hon. Member for Leigh referred to some major disasters and tragedies that we have witnessed recently and to the scale of compensation that is often paid in the glare of publicity. He highlighted individual and personal tragedies in other cases. As a journalist, I once wrote a headline describing an accident as the world's worst air disaster. An editor who was much more experienced and much wiser than I said, "You cannot say that because the world's worst air disaster is the one in which somebody you know dies. The world's worst car crash is the one in which your wife, child, brother, sister, mother or someone dear dies. All car crashes are dreadful and all such deaths are dreadful. In the scale of human suffering, it is the one which affects you as an individual that matters." It is the individual who needs compensation. The fact that one's grief happens to be shared by 100 or 200 other people and that a spotlight of publicity is put on that grief should be no cause for a different level of settlement.
I have a declared interest in the pharmaceutical industry. Many of my constituents are employed by Pfizers, the pharmaceutical company, at Sandwich. Their views have been borne in on me. Anyone connected with 522 the pharmaceutical industry is aware of the cost of introducing new drugs, the painstaking research, the care taken—not just occasionally, but in every case—the examination of evidence and effect and the licensing processes that are gone through before any new drug hits the United Kingdom market. We also know that drugs may have a side effect that affects one, two or 10 people only. For those people, that is just as dreadful a, if the drug affected 10,000.
I am certain that it is in the interests of the industry and of those who find it necessary to claim that when such cases occur—as they inevitably will if we are to make progress in research—that they are compensated swiftly and without recourse to long and agonising court cases. In that context, the thalidomide case is often mentioned. Prior to the thalidomide case, it was not the general practice of pharmaceutical companies to test drugs for their effects on pregnancy. It was largely because of that omission that the tragedy occurred. Since then the practice has been changed, but we know with dreadful reality that there will be others. Those cases must be settled quickly, fairly and, I would suggest, on a no-fault basis.
It was, in fact, a more prosaic case that finally drew my attention to the Bill and attracted my fervent support for this and further measures. It was the case of an elderly lady constituent who had gone out shopping, tripped on a broken paving stone, damaged herself physically and broken a fairly expensive pair of glasses. She reported the incident to her local authority, who quite correctly passed her claim to its insurers, Royal Insurance (UK) Limited.
My constituent engaged a solicitor to write the letter which she felt unqualified to write herself. In due course the Royal Insurance considered her claim and decided that, because the local authority had apparently inspected that piece of pavement within recent months, it had not been negligent and, therefore, there was no liability. The concluding paragraph of its letter to my constituent said:Unfortunately, therefore, whilst we have every sympathy with the injuries that you sustained"—we can almost hear the crocodile tears hitting the ground—as a result of your fall, as the legal Liability Insurers of the Kent County Council, we are unable to assist you furtherMy constituent went back to her solicitor, who very properly advised her that she most certainly could pursue her claim if she chose—it was her decision—and he would represent her, but the costs of that would be considerable and the likely result would be extremely uncertain. It will not surprise any hon. Member to learn that she did what any one of us would have done—she decided to cut her losses and not pursue her claim.
There are probably tens of thousands of such simple cases every year that require natural justice to be applied. It has been said that a no-fault compensation scheme would be expensive; certainly it would cost money. We may have to move towards a mandatory third party insurance for personal risk. Such insurance already exists. Every person who drives a car must take out third party cover and, perhaps, that will have to be extended. Such schemes work in other countries, and I believe that they can work here. I offer my hon. Friend the Member for Leigh my wholehearted support.
§ Mr. John Evans (St. Helens, North)
I congratulate my hon. Friend the Member for Leigh (Mr. Cunliffe) on his good fortune in winning a place in the ballot. In my 15 years in the House, despite entering every ballot for private Members' Bills at the beginning of every Session, I have never featured in the first 20.
More importantly and more significantly, I congratulate my hon. Friend on his Bill. I am certain that almost every hon. Member—especially, I hope, the Minister—will welcome my hon. Friend's initiative and his Bill. I am certain, too, that almost every hon. Member will recognise that, if my hon. Friend is successful in placing his Bill on the statute book, he will alleviate much of the misery that has occurred for many years.
I agreed with my hon. Friend when he said in his significant speech that most people are outraged by the spectacle of wealthy celebrities being awarded up to £million, because it was alleged that their feelings or their reputation had been damaged. I do not suggest that they should not be entitled to such damages, but, on the other hand, we read of people who have lost limbs, their eyesight or in some cases their lives, being awarded sums which can often be described as derisory.
I shall concentrate on a relatively small number of women who have suffered injury, pain and in some instances considerable heartache as a result of being fitted with a faulty intra-uterine contraceptive device, and who will benefit greatly if the Bill is passed.
My personal involvement in the issue started in October last year when a constituent brought the problem to my attention. The device I am referring to is called the Dalkon Shield. Members of Parliament are often not especially aware of issues until they are advised by a constituent through one of our advice bureaux. The Dalkon Shield is a contraceptive device manufactured by an American company called Robbins. When I investigated its background, I discovered that it had been in use from 1970, but was withdrawn from the market in 1974 because of the problems that it was beginning to cause women who were fitted with it. However, because of an appalling set of circumstances in which the problem was not brought properly to the attention of women everywhere, it is believed that some women continued using the device until well into the 1980s.
The device was found to cause injuries in women, such as inflammation, toxic shock, infertility, septic abortions and miscarriages. The device was not only injurious to women, but was a faulty contraceptive—it could not even do the job that it had allegedly been designed to do. It was recognised in the United States that it had caused the deaths of a number of women.
It is estimated that some 3.8 million of these devices were fitted in 80 countries around the world. Obviously, there is a great need for such a device. Women thought that it was the solution to an age-old problem, but, in fact, it caused them even worse problems. It is estimated that in Great Britain some 10,000 women have been fitted with the shield and many of them are now suffering. Indeed, worldwide it is estimated that more than 200,000 women were affected by the use of the Dalkon Shield.
When the matter was brought to my attention in October, the point was made that the manufacturers in the United States had admitted liability, but had placed a deadline by which claims could be lodged with them. That 524 deadline of 31 December 1988 was rapidly drawing nearer, and thousands of potential victims in Britain had failed to register their claims. The problem was that not enough women had been made aware that possible compensation existed. In many cases, in fact, women were not aware that the intra-uterine device was the cause of their problems and of their injuries. It was still being left to chance that women would become fully aware of the position. After all, many women did not even know that they had been fitted with a Dalkon Shield. They knew that they had had fitted an intra-uterine device, but they were not aware that it was the Dalkon Shield. In many cases, of course, it was not possible to find out because the medical records had been destroyed.
It was obvious to me that women had to be alerted to the existence of the compensation fund set up in the United States by the shield's manufacturers. It was simply not good enough that such an important matter affecting the health of several thousand women should be left to the chance that the initiatives of individual Members of Parliament would ensure that they received justice. Through parliamentary questions I pressed the Department of Health to alert women to their compensation rights. On 31 October I tabled a question asking the Secretary of State for Health:if his Department will initiate a public information campaign to inform women of any rights they may have in regard to any injuries caused by the Dalkon Shield contraceptive device."The then junior Minister, the hon. Member for Derbyshire, South (Mrs. Currie) replied:No. The Dalkon Shield contraceptive device, which was manufactured in the United States, is currently the subject of compensation litigation in the United States courts. I understand that those courts directed the manufacturer to publicise the procedures and the court subsequently expressed satisfaction with the way the company complied."—[Official Report, 31 October 1988; Vol. 139, c. 489–90.]The fact that the matter had been publicised in the United States and met with the satisfaction of the American courts does not necessarily mean that it would be satisfactory to the British courts or that the matter has been sufficiently publicised in Great Britain.
I urged the Department to reconsider its decision not to launch a public information campaign, but the Department refused to do so. I then asked the Department to instruct regional health authorities to launch publicity campaigns in their local media, but again the Government refused to issue any such instructions.
§ Mrs. Alice Mahon (Halifax)
To add to the list of things that I know my hon. Friend tried to do to help those women who have suffered as a result of the Dalkon Shield episode, may I say that many of us, including myself, asked our local health authorities to issue information, but the answer was just as negative. Presumably they were acting on instructions from the Government.
§ Mr. Evans
I am grateful to my hon. Friend for making clear the negative attitude of so many regional health authorities and the fact that a number of hon. Members attempted to obtain justice for women and publicity for the cause.
To its eternal credit, one regional health authority, the West Midlands, launched a public information campaign, which was extremely successful. It traced all women in its area who had been fitted with that shield and I am sure that hon. Members will appreciate that it was no coincidence that one third of the claims submitted to the 525 manufacturers from Britain by December last year came from the west midlands. The publicity campaign worked and women in that area who had been affected and injured had the compensation fund brought to their attention.
Just before Christmas there was a programme on London Weekend Television which featured the Dalkon Shield. That programme elicited a massive response from the region. Hundreds of women rang in and jammed LWT's switchboard. They asked for help, but the matter has still not been taken up nationally.
As my hon. Friend the Member for Halifax (Mrs. Mahon) has said, no other health authority chose to follow the example of the West Midlands regional health authority. I wrote to my regional health authority, Mersey, and asked it to run an advertising campaign for the benefit of my constituents and others within the region. The regional authority twice refused my request. Sir Donald Wilson, regional chairman of the health authority, wrote to me on 16 November and said:In Mersey Region we have issued a press release that we hope"—I stress "hope"—will be taken up by newspapers and radio giving this information and also announcing a telephone hot line to the Medical Department in the Region for personal enquiries.I could not help wondering whether if the families of those who run our health authorities had suffered pain and suffering and heartache from the device, members of those authorities would have been so content for the future of their loved ones to rest on the chance that the media would be interested enough to pick up a press release.
I carried on my campaign in the region and I received a fair amount of publicity. I wrote to Sir Donald Wilson again on 22 November and I made it clear to him that:I am informed by the West Midlands Regional Health Authority that as long ago as 1986, a local advertising campaign was initiated, at a cost to the Authority of some £5,000.Surely all of us recognise that £5,000 is absolute chickenfeed compared with the budget of a health authority. That money had made the facts about the Dalkon Shield clear to women who might have been fitted with the device and requested them to write to the authority for further information. In my letter I suggested that the Mersey regional health authority should contact the West Midlands RHA to find out the details of the campaign and the response to it because I knew that more than 1,000 women in that region had responded to its initiative. I received an interesting letter in reply from the regional medical officer who said:Sir Donald has asked me to thank you for your letter of 22nd November and to compliment you on bringing the Dalkon Shield deadline to attention on the radio.The authority thanked me for my initiative, but how much better it would have been if that authority had launched an initiative and brought the matter to the attention of women everywhere.
It is estimated that about 10,000 British women have suffered from the Dalkon Shield and it is obvious that a substantial proportion of those women live on Merseyside. In many cases terrible injuries have been suffered by women, and many physical and psychological problems have been created by the device.
I am happy to say that the deadline for claims has now been extended to 1 July this year. I am sure that everyone will welcome that development, but the fundamental issue has still not been addressed. It is difficult to contemplate how those women who have not discovered up till now 526 that they are entitled to claim will subsequently discover it by 1 July, unless a campaign is launched by the Government and by regional health authorities.
Even at this late hour I appeal to the Minister to respond and, if not launch a national campaign, to instruct the regional health authorities to conduct such a campaign so that every woman can be alerted to the likelihood that she may be able to claim from the fund that has been established by the manufacturers of the device. I hope that some publicity will flow from this debate, and if it does my hon. Friend the Member for Leigh will have performed a public service.
I stress, however, that even if women are alerted and register their claims they still face the prospect of legal battles in courts several thousand miles away. It does not follow that because they register their claims all their problems are over—another set of problems might arise. I am sure that everyone agrees that money alone cannot genuinely compensate for the constant pain and psychological trauma caused by miscarriages, which many women have suffered as a result of the shield. I submit that it falls on the Government to do all in their power to alleviate such suffering by ensuring that women are alerted to the likelihood of compensation.
The Bill is an obvious response to the dilemma faced by the women who have been caught up in the Dalkon Shield scandal. Once the deadline of 1 July is passed and women subsequently discover that they have suffered their injuries and problems because of the Dalkon Shield, they will have lost their rights to claim because they did not register by that deadline.
As I said earlier, the records of some of the women affected will never be traced. The arguments for a no-fault system have been put eloquently by my hon. Friend the Member for Leigh. They have been put on previous occasions and, no doubt, most hon. Members support that argument. It seems only right that women who have been injured by contraceptive coils—the Dalkon Shield is not the only offender—should receive automatic compensation once the device has been found to be the cause of the injury.
I am grateful to have had an opportunity to present this case on behalf of women who have suffered grievous injury. I commend my hon. Friend on the measure. I wish him well in Committee and I hope that the Bill passes on to the statute book. It will certainly receive a great welcome from thousands of women who have suffered grievously from the device.
§ 11 am
§ Mr. James Arbuthnot (Wanstead and Woodford)
It is impossible to listen to the accounts of the horrible injuries suffered by so many people in so many different circumstances and not feel moved. It is also impossible to hear that damages of £3,500 have been paid for the death of a child without asking how that sum could possibly compensate for it. However, we are here to legislate and the legislation that we produce must not be a gut reaction to tragedies. It must attempt to analyse the problems and to provide answers to them.
The hon. Member for Leigh (Mr. Cunliffe) talked about the appalling case of the woman who was awake for 40 minutes and suffered great pain while undergoing art operation and who has since suffered appalling 527 psychological consequences. However, it is not enough for him to talk about that without showing how his Bill would assist in such cases.
As I have just said, £3,500 cannot compensate for the death of a child, but how can £10,000 be sufficient compensation for it? No figure would be high enough. Any figure that compensates purely for death has to be an arbitrary figure. The hon. Member for Leigh called for a realistic assessment, but there can be no realistic assessment of bereavement damages.
§ Mr. Arbuthnot
I have a two-year-old son. If he were to die, £3,500 could not compensate for it; but nor could £10,000 or £10,000 million. The higher the figure of bereavement damages, the more I would be likely to have the uneasy and unhappy feeling that I had profited from his death. For that reason, bereavement damages have to be not only arbitrary but token.
§ Mr. Lofthouse
Surely the hon. Gentleman's argument means that he believes there should be no payments for damages.
§ Mr. Arbuthnot
I accept that point and my argument could mean that. However, there is a place for nominal, arbitrary and token damages to recognise, as nominal damages do in other cases, that damage has been suffered.
I accept that the House may disagree with me and feel that the damages figure is too low. However, if it does feel that, there is no need for new legislation to increase the figure. Under the Administration of Justice Act 1982 the Lord Chancellor already has the power to increase the figure. I recognise that he has not used that power and I think that he is right not to do so. However, there is no need for new primary legislation.
Another point that arises is whether bereavement damages should be payable to a wider class of people than at present. I think not. The death of a close relation is not the time to conduct an inquiry into the closeness of that relationship which, in one case, the contents of the Bill would necessitate. That is even more so if, as I believe, bereavement damages should be arbitrary, nominal and token.
We have heard about the insurance consequences. We cannot consider legislation in isolation from the consequences of it. If the consequence of the Bill is that damages will be increased—however laudable that may be—inevitably insurance premiums will increase. The hon. Member for Leigh rightly and openly accepted that in his speech. The consequence of an increase in insurance premiums would be that fewer people would take insurance.
§ Mr. John Evans (St. Helens, North)
On a point of order, Mr. Deputy Speaker. I understand that the hon. Member for Wanstead and Woodford (Mr. Arbuthnot) is a member of Lloyd's. Can he inform the House whether he has an interest in this matter?
§ Mr. Arbuthnot
I have an interest, and I was about to mention it.
Another consequence of increasing damages is that insurance might become less available to certain types of profession or product. That would mean that people who were injured——
§ Mr. John Garrett
On a point of order, Mr. Deputy Speaker. If the hon. Gentleman has an interest in this matter, should he not have declared it at the beginning of his remarks?
§ Mr. Deputy Speaker (Mr. Harold Walker)
The requirement is that if an hon. Member has an interest, direct or indirect, in a debate or proceedings before the House he should declare it. The hon. Member for Wanstead and Woodford (Mr. Arbuthnot) has said that he intends to do so.
§ Mr. Arbuthnot
If the consequence of an increase in insurance premiums and damages is that insurance becomes less available for certain types of profession or product, it will decrease the protection available to the consumer.
The hon. Member for St. Helens, North (Mr. Evans) rightly said that I have an interest in insurance. I do have an interest in that I am a member of Lloyd's. However, the hon. Gentleman suggested that it was ridiculous to suppose that it would be the directors of insurance companies who would suffer. It will not be insurance companies or their directors who will suffer and their profits will not be affected. If insurance premiums increase and insurance becomes less available, the consumers—the people in the street—will suffer as they will not be protected by insurance.
§ Mr. Cunliffe
The hon. Gentleman has made a point which comes from a vested interest. He emphasised that the profits of insurance companies will not decrease. Opposition Members understand that. I have been fair in offering time for an adjustment by the insurance companies of their premiums. I do not believe that it will deter people from taking insurance. We are simply trying to legislate for reasoned financial justice. I accept that it is an arbitrary figure. How does one assess, and society recognise, the right sum for the loss of a child? The claimant, if he feels inclined, can choose to do something that places a premium on death or suffering. Although compensation is not in some ways compatible with death, people have rights and they can make the claim even if they give the compensation to a drink-drive charity fund or set up some form of trust to avoid the very matters that form the crux of the Bill—any form of personal injury, accident or loss of quality of life.
§ Mr. Arbuthnot
The hon. Gentleman's intervention was obviously made from the heart, and it covered several different points. I shall deal with insurance rather than bereavement damages, from which I have moved on.
The hon. Gentleman suggested that I spoke from a vested interest. In fact, if he analysed what I said he would see that I was speaking against my interest when I said that the profits of insurance companies would not be affected by the Bill. Since I was speaking against my interest, it was not right to suggest that I spoke from a vested interest.
529 As I have maintained, under a regime in which insurance premiums went up and insurance was less available, it would be the consumers who suffered.
§ Mr. Arbuthnot
I said that I would give way twice. I have no interest in delaying this debate as there are other debates to follow.
The question of insurance relies very heavily on the assumption that damages will rise as a result of the Bill, which was its apparent aim. However, that aim will not be achieved by the Bill because it is hard to see how merely establishing a board will affect the level of damages. The Bill does not instruct the board to increase damages and, unless the House gives the board that instruction, in theory damages will be calculated on exactly the same basis as they are now. Therefore, if the Bill will not necessarily increase damages, will it, as is hoped by those who sponsor it, increase and improve the consistency of awards of damages?
§ Mr. Arbuthnot
As I have said that I will give way twice, that is what I must do.
Will the Bill increase or improve the consistency of damages? The present system achieves consistency in damages in two ways: the application of established principles by experienced judges in the courts; and if that goes wrong, by the supervisory role of judges on appeal. I ask the hon. Member for Leigh how the establishment of a board would improve the present position.
The trouble with schedule 2 of the Bill is that it aims for standardisation, which creates two difficulties. First, no two cases are the same—each case involves pain, suffering, loss of future and past earnings, loss of amenity, cost of treatment and many other matters. The court already takes into account all those factors when assessing damages.
The second difficulty is that, frankly, the Bill's attempt to standardise certain forms of injury is not a success. For example" it is impossible to discover a suitable figure for injuries involving visual impairment of both eyes without the scope of a figure being so wide as to be meaningless.
On page 9, paragraph 12, on the subject of "Mental and Behavioural Disorders," the Bill's drafters have simply given up. If one turns the page to find out what is meant by mental and behavioural disorders and to see how the Bill analyses those matters, one finds a blank page. There is no breakdown of the categories.
It has been suggested that the Bill will save time and costs—a figure of up to £100 million a year has been suggested. I am sorry, but it will not do so. When the courts consider the level of damages, they will have to take into account not only the points raised by the Bill but all the other points to which I have referred. The Bill cannot remove the relevance of personal circumstances or medical evidence, however much it might wish to do so. It will not save costs or time.
Although entitled to take into account actuarial evidence, the courts choose not to do so because they have their own system of multipliers. It has been suggested that actuarial evidence is correct, or more accurate, but it cannot be said that either system is correct or accurate. Both have to rely on relatively arbitrary guesses. However, 530 one point in favour of the present multiplier system is that it is simple and, in general, more consistent than actuarial evidence.
The hon. Member for Leigh suggested that actuarial evidence would be better and more accurate. If that is so—which I doubt—it would be at the expense of simplicity and consistency, which would not be an improvement. It would certainly increase the costs of litigation—something that the hon. Gentleman wants to avoid.
The Bill is full—one might almost say fraught—with good intentions. However, it does not achieve even its limited aims and should not be given a Second Reading.
§ Mr. Robert Litherland (Manchester, Central)
I congratulate my hon. Friend the Member for Leigh (Mr. Cunliffe) on introducing the Bill. I also congratulate him on the way in which he presented the Bill with deeply felt passion. When he referred to individual cases it was with deep and genuine emotion and we could not help but be moved—especially by the constituency cases to which he referred.
My hon. Friend said that the present system was designed for the rich, not for the people whom the Bill is intended to assist. I wish to refer to the case of one of my constituents—a young man called Martin Foy. He was nineteen and a half years old, mentally disabled and being cared for at Calderstones hospital near Blackburn. His father received a telephone call telling him that Martin had suffered an accident when falling off an armchair. He was told that it was nothing to worry about, but Mr. Foy was worried and went into Manchester, where he missed the last bus to Blackburn. First thing the next morning he shot off to Calderstones hospital hoping to see his son.
When Mr. Foy arrived at the hospital he found that his son had been moved to Blackburn infirmary. He then discovered that his son had not hurt his neck, as had been suggested, but had a fractured spine and a complete severance of the nerve connection at the point of fracture. The specialist informed Martin's parents that the fracture was the result of a violent injury.
For several months Mr. Foy was under the impression that Martin had fallen off a chair, but after he had made numerous inquiries it was revealed that Martin's spine had been fractured while he was being restrained. Nurses and officials at Calderstones hospital gave conflicting versions of what had happened. It was never established how many nurses were involved: some reports said that one nurse, who had been under domestic stress, had dealt with Martin that night. I have asked why Martin was not sedated if his behaviour was violent, but have received no adequate reply. Why were the parents kept in the dark?
We have the word of medical personnel against that of a mentally disabled young man, now completely paralysed. That young man cannot speak for himself, and the solicitors are therefore having a very hard time in trying to equate possible compensation with his injury—if there is ever to be such compensation.
We can only try to understand what a traumatic experience this has been for Martin's parents. As they now have no faith in the hospital. they took Martin home o care for him themselves. The result was a massive strain on their financial and physical resources. Mr. Foy lost his job and suffered heart attacks; Mrs. Foy's health also suffered. 531 They bore the burden, however, with a dedication and determination that won admiration from all who knew them.
Mrs. Foy wrote me a letter, saying:I am writing to you because you have been so kind and helpful to my family since our son had this terrible accident in Calderstones Hospital.I am sure you know that my husband has had a very severe heart attack and is in Manchester Royal Infirmary, having been transferred there from North Manchester General Hospital.He is to have a pacemaker fitted and the Consultant has told me that he will never be able to be an active man again.I am sure that all the worry about Martin and about the Court case has helped to make my husband ill and contributed to his heart attack. The terrible thing that has happened to Martin has now affected all our lives.We pose the question: how do you compensate for that?
I contacted the Secretary of State for Health and received a reply from the then Parliamentary Under-Secretary of State, the gist of which was that the case should be dealt with through the legal channels. The Under-Secretary would not intervene. He apologised, however, for what he described as an unsatisfactory reply.
I wrote to the Prime Minister, who replied that words were inadequate to those who had suffered so much, and offered her deepest sympathy. She wrote:I do appreciate the agonies which Mr. and Mrs. Foy must have gone through since their son, Martin, was so badly hurt and I can well understand their concern to discover the circumstances in which this tragedy happened. I know that words are of little value to those who have suffered so much but I hope that you will pass on to Mr. and Mrs. Foy my deepest sympathy.Understanding and sympathy, however well intentioned, could not alter the circumstances of Mr. and Mrs. Foy. They are not rich people, and their son's irreversible injury has made them so much the poorer. The Bill aims to allow an independent board to give judges an idea of public feeling—and there was considerable public feeling in the Foy case. I am sure that public feeling about the level of compensation forsuffering and loss of quality of lifewould have been welcomed by the Foys.
The definition in clause 3 of loss of quality of life would have been both interesting and testing in the case of Martin Foy. What was his quality of life, as a mentally disabled person, before the injury that caused him to become paralysed while in hospital? What of the damaging effect on the whole family's quality of life?
If the Bill can alleviate the pain and assist the lives of my constituents, the Foys, I congratulate my hon. Friend the Member for Leigh on having the foresight to present it. It is worthy of support from both sides of the House. The Foys do not want compensation; they want money only to give their son some comfort. We have heard the voice of compassion from my hon. Friend, and we have listened to the voice of vested interest in profit from the hon. Member for Wanstead and Woodford (Mr. Arbuthnot). I know which side I shall be voting for.
§ Mr. Menzies Campbell (Fife, North-East)
I, too, begin by congratulating the hon. Member for Leigh (Mr. Cunliffe) on winning his place in the ballot, and—perhaps more significantly—on the reasoned, moderate and 532 sensible way in which he introduced the Bill. It is notable that he has attracted if not unanimous support, none the less support from both sides of the House.
If this were a Third Reading debate, I confess that I might have some difficulty in supporting the hon. Gentleman, but he has been so receptive in his response to questions about elements of the Bill as drafted that I feel confident that any imperfections that I may see in the measure are entirely capable of being removed as it proceeds through the House.
Such criticisms and observations as I am about to offer are not theoretical. I declare an interest, in the sense that I have appeared both for and against persons seeking damages whose right to claim damages, and the amounts that they would be entitled to claim, would have been affected by the Bill. I have also appeared both for and against insurance companies. That takes me naturally to what was said by the hon. Member for Wanstead and Woodford (Mr. Arbuthnot).
I understood the hon. Gentleman to be saying that the Bill, if passed, would affect insurance costs. When a court awards damages, it does not take account of the fact that insurance is available. It takes no account of the consequences for insurance costs of a particular level of damages. If it did there would always be compelling arguments for never raising the level of damages, as to do so would be to raise the level of insurance costs.
One of the more significant features of the development of the law on compensation in recent years has been the recognition that it must take account of the level of inflation. For some time, even after inflation had begun to assume dramatic proportions, the courts declined to take it into account, but eventually they were persuaded that that was inappropriate and indeed unjust. There is now an obligation for damages, while not reflecting exactly the retail prices index, to take account of inflation. Clause 7 recognises the position in Scotland since the passing of the Damages (Scotland) Act 1976 and, by implication, approves of that change. I understood the hon. Member for Leigh expressly to approve of that change and its consequences for Scotland.
Prior to that change, a relation of a deceased person claimed solatium, which was no more than pain and suffering. Now, an award is made for loss of society, which, as its terms clearly show, embraces wider considerations than the grief that a spouse might feel about the death of a husband or wife. It embraces issues such as companionship, and, for children, the absence of guidance and stability in the formative stages of development.
The expression "bereavement damages" is more restricted in itself and the concept that it must necessarily encompass. It is much more restrictive than "loss of society", and on one view may be said to give little colour to what is intended. As hon. Members have made clear, giving damages at a certain level does not bring a deceased person back to life. Nor, in the case of personal injuries, does it restore one's condition before the accident.
If the hon. Member for Leigh is satisfied that loss of society has proved a successful concept in the law of damages in Scotland, is there not justification for considering whether it should be adopted in English law? It has worked well in Scotland. Initially, there was a hiccup, because when awarding damages judges interpreted loss of society as being approximately equivalent to solatium. Dingwall v. Alexander established that loss of 533 society means more than an award for pain and suffering. Since that decision, the concept has been sufficiently flexible to allow a gradual and legitimate increase in awards made under this head.
I accept that clause 6(4) should try to fix a minimum award, but I ask the hon. Member for Leigh to consider why it is necessary to impose a maximum. No matter how many people may be sufficiently closely related to be entitled to bereavement damages or loss of society, the value of a death is being fixed at a maximum of £50,000. That is unattractive in principle and many families would find it repugnant because it would fix an arbitrary ceiling on the value of a death.
The hon. Member for Leigh referred in detail to the constitution of the board and the introduction of lay representation. The hon. Gentleman accepts and understands that in Scotland civil jury trial is available to people seeking damages for personal injury. It is with some regret that those familiar with practice north of the border have observed the terms of the consultative document issued by the Lord Advocate and Secretary of State, which seems to suggest that the right to civil jury trial should be withdrawn. I hope that those who will consider responses to that document will read today's proceedings. Many of the speeches and observations that have been made bear directly on the issue that will have to be canvassed if that right is withdrawn.
Under the Bill, there can be one solicitor and one barrister from England on the board, and the separate Scottish legal jurisdiction may be unrepresented. Given that the hon. Member for Leigh has recognised the merits of the Scottish system, he may think it advantageous to allow a legal practitioner from Scotland to be on the board.
§ Mr. Campbell
As the hon. Gentleman says, there may be scope for a Scottish board.
Clauses 3 and 5, which deal with amounts of compensation and actuarial evidence, are more than overdue.
§ Mr. Robert Hughes (Aberdeen, North)
Does the hon. and learned Gentleman accept that, instead of having a separate Scottish board, it would be better to have a United Kingdom board? It would be nonsense if different compensation were paid north and south of the border, whichever side was advantaged or disadvantaged.
§ Mr. Campbell
I fear that that is the current position. The hon. Member for Leigh is arguing not that compensation on either side of the border should be exactly the same, but that there should be more consistency, which is precisely the effect of clauses 3 and 5.
The hon. Gentleman is urging not that courts should be bound by compensation established by the board or evidence from actuarial sources but that they should have regard to compensation established by the board and the actuarial evidence. That is a matter with which the courts are familiar, and they fulfil such obligations on many occasions. The clauses say to the court, "You will continue to have wide discretion, but in exercising it you will have to satisfy an appellate court, if necessary, that you have taken due account of the compensation that the board has 534 established or the actuarial evidence." There is nothing unattractive in principle in that suggestion. Indeed, it would lead to more equitable settlements.
Observations have been made about the level of awards in the United States. Particular reference was made to awards following the Piper Alpha tragedy. The awards were said to be based on what was rather archly described as a mid-Atlantic settlement. The idea being conveyed was that jurisdictions were competing for damages actions. Actions could have been taken in Scotland, England and Wales or the United States. For reasons that have already been explained, damages awards are frequently higher in the United States. A compromise was reached because those responsible for payment were anxious to make payment against the risk of being taken to court in the United States and having to make higher payments. There is injustice in the idea that the damages to which one may be entitled will depend on the good fortune of whether a decision on whether a person or company has been negligent can be made in the United States rather than Britain. That problem will exist so long as there are competing jurisdictions. We can at least ensure that greater consistency in the competing jurisdictions is found in levels of damages within the United Kingdom.
Notwithstanding my criticisms, which may easily be resolved in Committee, the Bill deserves the support of the House. The calculation of damages for death or personal injury has for a long time followed a restricted path. The use of the multiplier and the multiplicand has frequently been seen to be arbitrary and insensitive. It is necessary that the House should take unto itself the responsibility of reviewing from time to time the way in which damages are awarded to persons entitled to them. The Bill provides a valuable and effective opportunity to do so, and I hope that it will get the Second Reading that it undoubtedly deserves.
§ Mr. John Garrett (Norwich, South)
I support the Bill and congratulate my hon. Friend the Member for Leigh (Mr. Cunliffe) on bringing it forward. Further reforms are needed, and I agree with the hon. Member for Thanet, North (Mr. Gale), who spoke about no-fault schemes. The Bill paves the way effectively and is about as far as we can go at present.
I feel entitled to speak on this subject because of my fairly extensive experience of personal injury litigation—although, I am pleased to say. in a technical, not personal sense, as I carried out a substantial research project. A few years ago, in a professional capacity, I participated in an exceptionally thorough examination of hundreds of personal injury cases, from accident through to conclusion. I found it a saddening experience and was made aware of many human tragedies. I wish to make it clear that the evidence that I shall quote is from published or personal sources and does not draw in any way on the report to my client.
Every year there are 3 million accidents involving injury in Britain. Within a three-year time limit of an accident, there are some 300,000 formal claims. Each year there are about 30,000 writs or summonses issued in the High Court and 25,000 in the county courts. Fewer than 10 per cent. of formal claims ever reach court. In the High Court 9,000 actions are set down each year, and 1,300 trials go all the way to judgment.
535 The two salient features of personal injury litigation are delay and cost. High Court cases take an average of four to six years from accident to conclusion. Even in the county courts, where the amount in dispute is usually under £3,000, the delay is, on average, three years from accident to completion. Amazingly, legal costs in the High Court amount to £70 per £100 damages and in the county courts £175 per £100 of damages. Those delays and costs cause anguish to the plaintiff. They show massive inefficiency in the system and mean that compensation is not available until long after it is most needed, which is soon after the accident.
§ Mr. James Lamond (Oldham, Central and Royton)
Is it not a fact that if there are considerable delays before claims come to court and those claims turn on the evidence of witnesses of the accident, the witnesses' memory will be clouded, understandably, by the passage of time, so sometimes claims may fail on those grounds?
§ Mr. Garrett
My hon. Friend is right. The Pearson study some years ago on personal injury litigation made that point about the consequence of inordinate delay.
All this inefficiency is paid for by insurance companies, trade unions and legal aid funds, which means that ultimately the costs fall on us who are insured, members of trade unions or taxpayers. The Lord Chancellor's review concluded that the system was inefficient, dilatory and disproportionately expensive.
In personal terms, it is much worse than that. We have heard some very disturbing personal cases described in the debate. I know a young woman who was terribly crippled and ended up with almost total physical incapacity following a road accident. The fault was clear so her case took three years to settle in the High Court. That was pretty quick—at the bottom end of the time span taken by these cases. She had to sit in court while her barrister, who knew nothing of the case, described at length her poor marriage prospects in order to talk up the level of compensation. The barrister for the insurance company played down the consequences of her injuries by saying what a wonderful carer her mother was, so the compensation that she might need would be that much less, and saying that she could always be carried upstairs if she needed to get around the house. There was a talking down of the benefits. In the end, thanks to her legal advice, the young woman got less in compensation than she was offered before the court hearing, because her barrister urged her to pursue the matter all the way to and through the courts, and took £3,000 a day for his advice.
That is not an untypical example of the delays, hassle and humiliation that people suffer when they have to sit in court and hear, for example, their marriage and career prospects and life expectancy discussed. Fifteen years ago, the Pearson commission showed that of those who did not make a claim 20 per cent. did not know how to do so, or did not know that they could claim—that happened in many Dalkon Shield cases—11 per cent. were too upset or found the whole process too daunting and 5 per cent. were just glad to be alive and could not think about the accident, so did not make a case against those who had injured them. At least 100,000 people a year are not getting their rights where fault can be established under our tort system.
536 The delay and cost are often unavoidable, because one must wait for the plaintiffs medical condition to stabilise. People's condition deteriorates—for example, arthritis in broken limbs sets in. Doctors take an inordinate time to produce reports on these cases. In the published study to which I referred much is made of the inordinate wait for doctors to produce medical evidence.
Waiting for a trial is another thing altogether. It takes two years in the High Court in London before a defendant is supplied with the details of the plaintiff's case and a year in the High Court before a judge can be made available, so there is a queue to get before the court. There are also long delays for a person who has an inexpert solicitor, and there are many of them in this game. Usually, fast progress is made in an industrial injury case when the matter is handled by those groups of solicitors who are known in the trade as trade union firms. They take up industrial injury matters and know how to speed them along. A solicitor in a small town in a rural area may get these cases years apart and be daunted by the prospect of working out how to carry the case forward.
The proposed Compensation Advisory Board should accelerate the process of deciding the quantum of an award and increase the present derisory bereavement award, but there would still have to be proven negligence or fault. I and many others have long maintained that the only long-term solution to the problem is a comprehensive no-fault national compensation scheme. We need such a scheme, under which an injured person is simply compensated for his injuries. There is a fair amount of international experience on this with which I shall deal after I have given way.
§ Mr. Menzies Campbell
Does the hon. Gentleman agree that the argument in favour of no-fault compensation is at its strongest in what is described as medical negligence cases, where the establishing of negligence is frequently difficult and frequently depends on being able to summon to the assistance of a plaintiff in England, or the pursuer in Scotland, another medical expert who is willing to be critical of the action, or inaction, of the person responsible for the damage to the patient?
§ Mr. Garrett
Such cases are extraordinarily protracted because of the unwillingness of the medical profession to give evidence against itself. I hoped to work the word iatrogenic, which refers to injuries caused by doctors, into my speech.
No-fault compensation was discussed thoroughly over a decade ago by the Pearson commission, but it ran away from the issue. The best-known scheme for no-fault compensation is in New Zealand and it simply pays compensation for injury by accident, including medical, surgical, dental or first-aid misadventure. The Pearson commission concluded that such a scheme would not be applicable to Britain because New Zealand was an agricultural country. The commission meant the New Zealand did not have many personal injuries—unless somebody was hit by a runaway sheep, for example.
However, although the commission could not buy the deal of a complete no-fault compensation scheme, it proposed a variant of the no-fault arrangement for road injuries. Of the overall figure of 300,000 injuries for which a claim is made, 40 per cent. occur on the roads, 40 per cent. are industrial and the rest, increasingly, are medical or similar injuries. The Pearson commission proposed a 537 variant for road injuries, in addition to the continuance of the industrial injuries compensation scheme. The Lord Chancellor's review, the most recent work on the matter, never even considered a no-fault scheme. Although a no-fault scheme was discussable a decade ago, it cannot be mentioned today. The Lord Chancellor proposed a scheme for speeding up litigation.
We all know why nobody refers to no-fault compensation schemes any more. The reason is the alliance between the pecuniary interests of lawyers and their coincidence with the trade unions, which provide a legal service to their members. I have here a typical trade union journal, published by the National Union of the Footwear, Leather and Allied Trades in my constituency. Quite rightly, the trade union can boast to its members about a series of excellent settlements of industrial injuries, such as a member receiving £100,000 in compensation, or a defective track causing injury and the union getting £920 for the man. A member of the Preston, Glossop and district branch contracted dermatitis and the union got £6,000 for her. Even the back of the journal says that the legal department handled 709 cases and raised in compensation £946,000.
This is a difficult issue because trade unions have done a first-class job for their members for a long time in such matters, and it is a key service. However, many people injured at work are not members of trade unions. Perhaps some of them cannot be members. There are many people injured on the roads who have no access to the expertise of a trade union firm that could push through such a claim.
§ Mr. James Lamond
When discussing no-fault compensation, does my hon. Friend recall that the last act of the Callaghan Government was to introduce the Pneumoconiosis etc. (Workers Compensation) Act 1979 of which I have some experience because it covered byssinosis in the textile industry? It divided those who suffered from byssinosis into two categories. One category covered those who had no former employer left in business. They received fairly reasonable lump sum compensation without any questions being asked. The second category were those who still had employers in business. They were required to carry out the normal procedures. The trade union, of course, supported them in their claims, but those people felt that they had been dealt with harshly because one group received compensation without being required to prove fault and the others did not. However, the scheme was at least a concession towards the goal that my hon. Friend and I hope will be achieved.
§ Mr. Garrett
I thank my hon. Friend for his intervention, because I did not know about that case. It illustrates the point that a number of us have been trying to make for some time.
In addition to the excellent proposals of my hon. Friend the Member for Leigh, we now need an updated Pearson commission and a study of the scope for a no-fault compensation scheme. Of course, people would immediately call attention to the cost on public funds. I imagine that claims under such a scheme would probably treble and that there would be 200,000 or 300,000 claims a year carried to the point where they would have gone to court under the present system. The Chancellor of the Exchequer continually boasts of having a £17 billion surplus and one would have thought that even £1 billion or £2 billion would be worth spending on such a system. It 538 would not be wholly new money involved because many of the people who receive awards would receive them from public sources anyway.
We must return to the question of a comprehensive, national, no-fault compensation scheme. I realise that that may ruffle a few feathers and that the legal profession will not care for it too much, but the case for it is so clear that the least that the Government can do is to set up a commission on it. There have been at least 30 commissions since the war dealing with such litigation, but we need an updated examination of the case for no-fault compensation. Meanwhile, my hon. Friend's Bill deserves a Second Reading because it represents a major advance and can be built on in the future.
§ Mr. Kevin Barron (Rother Valley)
First, I want to take up a point raised by my hon. Friend the Member for Norwich, South (Mr. Garrett) about what is not in the Bill. I must say, however, that if the Bill is given a Second Reading and completes its passage through the House, it will be a major step in moving to a fairer system.
Many solicitors and barristers may not agree, but no-fault compensation should become law. I say that because I worked in the coal mining industry before coming to the House in 1983 and that industry has a history of injuries. There have been some unfortunate arid sometimes fatal injuries and a history of accidents over many generations. The unfairness of the present system is highlighted in almost every mining community where similar accidents have led to major differences in the benefits paid, because people have been unable to prove negligence on the part of the employer.
My trade union has always argued that no one ever sets out to get injured at work, although it is always difficult to prove negligence on the part of the employer and the payment of compensation is by no means certain.
It is especially difficult to prove negligence in the administering of anaesthetics, for example. It is almost as though a cloak of official secrecy protects those who work in hospitals. It is very difficult to get hospitals to acknowledge that mistakes have been made. As an MP, I have experience of this matter; there are one or two cases under consideration in my health authority area at the moment. It is difficult to obtain a formal admission of negligence on the part of a hospital employee.
Just as no one sets out to get injured at work, no one goes into hospital intending to come out feeling worse. One can hardly say, "I went into hospital knowing that I would come out worse than when I went in. It was my fault. I was to blame, I could choose whether to go into hospital or not." That is nonsensical. I hope that, before too long, legislation providing for no-fault compensation will reach the statute book so that we can get rid of such anomalies.
I support the Bill because it represents an important stepping stone. My hon. Friend the Member for Leigh (Mr. Cunliffe) rightly said that many of its provisions will help people to get round existing problems. He rightly referred to "the obstacle course" that lies in the way of those who seek compensation. Both he and my hon. Friend the Member for Norwich, South referred to one or two of those obstacles. It is important to highlight as often as possible the problems that people face with the legal system, one of which involves finance. Even if someone 539 knows how to gain access to the legal system it may be difficult for him to find the necessary finance. In addition, it can take a very long time for a case to reach the court and hence for compensation to be awarded.
It has been pointed out that in some instances the legal process is deliberately held back to try to dissuade people from seeking to obtain the compensation that they deserve. We cannot rely on a legal system that allows such things to happen to provide justice for people seeking the compensation that is rightly theirs once negligence has been proved.
Right hon. and hon. Members will be aware that there is much public disquiet about the present system for determining the amount of compensation to be paid once negligence has been proved. That has been said on many occasions—not least by the commissions set up to look into such matters. One of the best comments that I have seen in recent weeks appeared in The Observer on 26 February. It puts into perspective ordinary people's feelings about how sums of money are paid out under the current system:But most claims for personal injury compensation are set by the precedent as recorded in the lawyers' Bible, 'Kemp and Kemp on Damages". A sum of money, plucked out of the air by a High Court Judge becomes the standard award for specific personal injury. Huge awards for damages reported in the papers are the exceptions. Long before they ever reach the courts most cases are settled for small sums based on the precedents recorded by Kemp and Kemp.People are very worried that a so-called lawyers' bible should determine the amount of compensation to be awarded in injury cases. The Bill goes a long way towards taking such decisions away from Kemp and Kemp. Those on the Compensation Advisory Board will have expert knowledge in all relevant matters, including the knowledge of how the victims of pain and suffering caused by injury feel, and of the degree to which those feelings should be compensatable. The Bill provides for a more broad-brush approach to the problem than we have under the present system, which uses precedent set by High Court Judges.
My hon. Friend should be complimented on clause 1, which would establish the Compensation Advisory board. We have received a briefing from the Association of British Insurers whose members complain that they have been left off the board. As my hon. Friend says, there are three spare places, and there is room for additional experts. The Bill is not carved in tablets of stone—a fact on which I complimented my hon. Friend. If the insurers felt that they could make a good case for being represented on the panel, they could put that argument. I suspect that some other bodies may feel that they should be represented, and they, too, can argue that they should take up one of the three spare places. I hope that we shall be in a position to satisfy all those who feel that they have been left out the drafting of the Bill.
Under from clauses 3 and 5, the evidence collected will have to be broader than in the past. I have an example of what happens under the present system. In some cases negligence may have been proved; there may be no dispute and it may have been established that an individual's negligence has contributed to an accident. But, as my hon. Friend the Member for Leigh said, even in such cases compensation is decided on the basis of a host of factors, such as the person's age, his possible loss of earnings and so on. Recently, I read in the press about one of the victims 540 of the Brighton bombing, who was in his seventies. He was running a business—he was still in work—but the compensation awarded did not take that into account because of his age. There is something gravely wrong with a system that allows the non-payment of compensation to the victim of a gruesome attack even when negligence has been proved. That person was not compensated because of his age. There are many other respects in which the system for awarding fair compensation for the terrible things that happen is defective.
One of the main aims of the Bill relates to the actuarial evidence that will be collected. Pecuniary losses such as loss of earnings and medical costs must be addressed in the Bill, and it must also address non-pecuniary losses such as pain, suffering and loss of quality of life.
My hon. Friend the Member for Leigh spoke about a clause in the Social Security Bill that is going through Parliament which says that various social security payments are affected by court awards. I have checked a case that came to my notice in my constituency last week. A person who worked for the National Health Service was recently awarded a lump sum of £2,600 from the National Health Service injury board. She received that award because she was injured at work and eventually had to leave work. She is now a single parent and has been living on state income since 1983. In 1985 she went on to supplementary benefit, which is now called income support. She has been told that she will have to forfeit £1,500 because she was on state means-tested benefit from 1985.
Income support is payment by the state for pain and suffering to somebody who has had an industrial accident and where negligence has been proved. That woman was the victim of an industrial injury and is now seeking repayment of the £1,500. Pain and suffering should be defined in a more formal way and people cannot be blamed for thinking that it is defined on a whim by a judge.
The Bill aims to ensure that as far as possible a person receives compensation commensurate with what he has lost. Some people fear that the way in which the system works means that some people are being under-compensated. I have an example that highlights this problem. A briefing that I have received on the Bill says:If a twenty year old was injured and suffered an annual loss of £10,000 for the rest of his life, the largest amount of compensation he could receive would be approximately £190,000 for that loss. Although he would probably have forty five to fifty years left to live.The loss is assessed by taking the injured person's annual loss and multiplying it by a figure. The figure that is chosen is not the life expectancy of the person. The reason being that if the annual loss was multiplied by the life expectancy the claimant would be overcompensated because he would receive a lump sum and the income he would earn on it.That is obviously true and some people could well argue that somebody had been over-compensated. The briefing goes on to say:If the twenty year old received a lump sum of £500,000 as compensation for his lost income, he would also have the income he could earn on it.The courts attempt to calculate the compensation to take into account the fact that income will be earned on the lump sum. The aim is therefore to multiply the claimant's annual loss by a figure which will produce a lump sum which when added to the income it will earn each year amounts to the claimant's loss. The result is that the figure chosen is much lower than the person's life expectancy.The problem occurs because as the Pearson Royal Commission stated the figure chosen is never higher than 18 or 19. The courts arrive at this figure because they assume that 541 an injured person will invest the lump sum in stocks and shares. This is because in the past the only way of guarding against the possible erosion of the lump sum by inflation has been to make such an investment, (the price of stocks supposedly takes into account current inflation rates)."—that is not always done—Pearson stated that such a method was clearly inadequate and was based on an assumption that the income earned on the stocks will be 4 to 5 per cent. This has led to the maximum being 18 or 19 which can be too low.Someone in his teens or 20s has good prospects of earnings and in certain cases could be under-compensated. The briefing goes on:The introduction of inflation proof government stocks in 1981 has meant that the effects of inflation can be dealt with without having to invest in normal stocks and shares. In fact the courts assume that a person will choose the most prudent investment available, working on the basis that it would be wrong to force a claimant to put the money which will be used to provide his medical care or income into riskier ventures. The security given by inflation proof stocks means however that less income is earned on them. The present income rate is (net of tax) approximately 3 per cent.That is not a high rate of interest. The briefing says:The difference between 4–5 per cent. (which is the assumption that the courts make) and 3 per cent. does not appear to be that great in terms of percentages. But using the actuarial tables formulated by a working party of lawyers and actuaries the resulting difference in the amount of damages can immediately be seen.Using the example of the man aged 20 who suffered an annual loss of £10,000 for life, using a discount rate of 4–5 per cent. multiplier is 19.8 years, and damages for pecuniary loss would he £198,000. Using a discount rate of 3 per cent (as the net of tax rate of return on index-linked stocks) gives a multiplier of 25.7. The award would be £257,000. In either case, some further deduction might be made to allow for contingencies other than death, e.g. temporary loss of earnings resulting from ill-health or unemployment.There is therefore a substantial financial difference between the two ways of calculating the person's losses. We feel that because of this people may run out of money with many years of their lives left to run.If the courts persist in using current methods there is no doubt that people will be under-compensated and they may not find that out until later in life. I shall not go into detail about what would happen if there was another stock market crash, but people could not be given a guaranteed return on stocks and shares. Somebody living beyond his 60th year might find that he had been under compensated 30 or 40 years before and that would be disastrous. There are not enough guidelines and the system of using precedents for compensation may not be adequate to cover a person's needs for the rest of his life.
I hope that the Bill will reach the statute book. If my hon. Friend wins another high place in the lottery for private Member's Bills I hope that he will introduce a Bill about compensation for old people who have suffered industrial or medical accidents. We need to bring real justice into the law of compensation because we must treat people as they should be treated and get rid of the lottery in the High Court.
§ Mr. Alfred Morris (Manchester, Wythenshawe)
I warmly congratulate my hon. Friend the Member for Leigh (Mr. Cunliffe) on his good fortune in the private Members' ballot. After winning his high place in the ballot, he quickly decided to make some of the most needful people the beneficiaries of his good fortune. He has worked very hard since then in winning parliamentary and public approval for his Bill, which enjoys all-party support and has been welcomed by a very wide range of 542 non-political interests: legal, medical and voluntary organisations, both large and small, not least those which work in the interests of disabled people and their families.
On this special day for him, I congratulate my hon. Friend also on both the content and manner of the speech with which he opened this. important debate. He was strong on issues of principle and flexible on procedure. That combination will have won him further support in all parts of the House and we on these Benches give him our full backing in seeking a Second Reading for his Bill.
This is a private Member's Bill fully deserving of that description. As I quickly discovered when winning the opportunity to legislate as a private Member myself, in the ballot of November 1969, many who win high places in the ballot introduce Bills that are, in fact, Government measures masquerading as private Members' Bills. The private Member's reward for helping Governments in this way is to receive the whole range of help given to Ministers in promoting legislation. Their Bills and speeches are drafted for them. They are briefed on every aspect and detail of the legislation and its effects. Among many other favours, they enjoy not just the benevolence but also the practical assistance of the Government Whips' Office.
That easy road was not chosen by my hon. Friend. In association with Citcom—and I join my hon. Friend in acknowledging the special help of Henry Witcomb—my hon. Friend has put forward a private Member's Bill, properly so-called, which richly deserves the reward of a Second Reading today.
There will be many technical and drafting points to consider in Committee and we on the Opposition Benches will play a full and constructive part in the discussion of any and all suggestions for improving the Bill upstairs. The central issue now is whether the Bill should be allowed to proceed there and I hope both sides of the House will be decisively in favour of its going into Committee.
It is now more than 10 years since Lord Pearson published his report on compensation for personal injuries. Since then there has been scant progress towards giving the report any meaningful effect. We are all only too aware of the anger felt by many people about the failure to address the issues raised by the report. They include many issues of great complexity, but one is of fundamental importance, namely, that there must be some action to improve the quality of justice for the individual.
The main thrust of Lord Pearson's recommendations was that there should be radical improvements to the tort system with a gradual extension of no-fault compensation schemes. While the whole question of no-fault schemes merits urgent attention, there is plainly no likelihood of wide-ranging change in the foreseeable future. Meanwhile, many people must still face the need to confront the daunting obstacles that obstruct the path to justice. Even if there is any move towards a no-fault scheme in the short term, it will be of only a limited nature.
There is little prospect of a no-fault scheme that would cover more than medical or minor road traffic accidents and, therefore, the tort system will still have to be used for people who are injured or bereaved by other accidents.
First among the problems they face is that of access to justice. Ability to afford it is often beyond the means of ordinary citizens. Secondly, even if they are able to afford to pursue their case, there is the difficulty of finding a lawyer who is suitably qualified in personal injury and medical negligence.
543 Thirdly, there is the problem of delay in achieving a legal settlement, of which the Lord Chancellor said on 4 July 1988:Delay, especially in personal injury cases, emerges as perhaps the most serious problem of all.Fourthly, there is the difficulty of proving one's case when the burden of proof so often seems unfairly loaded in favour of the defendant. Fifthly, if all these problems are overcome, the levels of compensation in this country are, as we have heard in the debate, deplorably low.
Again, the handling and financing of multi-claimant cases present particular problems. Right hon. and hon. Members on both sides of the House will remember the struggle that many of the victims of Opren had to obtain the money to sue the drug's manufacturers. Many had to rely on the generosity of a business man to ensure that their voice was heard. Fortunately, their claims were resolved although, as we have heard this morning, they were resolved in an atmosphere of bitter controversy.
One year on from Opren, there are now at least four other major cases involving thousands of people looming on the horizon: tranquilliser users, British nuclear test veterans, women who allege that they have been injured by the Copper 7 IUD device and haemophiliacs who have contracted the HIV virus. Many of these unfortunate people are caught in the trap of inability to sue because they lack the means to do so. They have no prospect even of stating their case in a court of law.
One of the women involved in the Copper 7 case recently spoke out about her own plight and that of the hundreds of other women like her. She has had to have four operations to remove her uterus, ovaries, fallopian tubes and cervix. She will be on hormone therapy for the rest of her life. She believes her childlessness resulted from pelvic inflammatory disease caused by a Copper 7 device. Yet she has been told that she and her husband earn too much for her to qualify for legal aid. She says:… it seems that there is no justice for the likes of us.Even if they sold their house they would not raise anywhere near enough to meet potential legal costs of £250,000.
I have also had put to me the case of a woman whose life was turned into misery after becoming dependent on tranquillisers after 22 years. She and her husband have life savings of £20,000 and they are not entitled to legal aid. Her husband says that they were devastated to learn of the sums that might be involved and could not even begin to consider taking legal action against a huge multinational drug company, whose resources are enormous compared with their own.
§ Mr. Morris
I shall give way to my hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse).
§ Mr. Lofthouse
My hon. Friend rightly referred to haemophiliacs. Is he aware that of the 5,000 haemophiliacs in this country, 1,200 are already HIV positive following the use of contaminated factor 8 by the Health Service? Is he also aware that 835 people with haemophilia have developed AIDs and that 87 have already died, leaving many widows and fatherless children?
§ Mr. Morris
I am deeply aware of those grievous statistics from my work among disabled people. My hon. Friend is eminently right to emphasise their significance in this debate. He and I are talking about very human problems which this House cannot ignore. They underline the importance of my hon. Friend the Member for Leigh's initiative in dealing in his Bill with the low levels of compensation for bereavement and injury and in putting some political heat into this issue.
All of us know from our postbags that the problem the Bill addresses is of deep concern to many people. The Bill has attracted widespread support from over 50 national legal, medical and voluntary organisations. These latter include the Haemophilia Society, the Royal Association for Disability and Rehabilitation, MIND, the National League of the Blind and Disabled and the Spinal Injuries Association.
The Bill deals with the deep sense of injustice and insult which is felt by people who suffer the loss of a member of their family and then find that the value put on his or her life is £3,500 or even less.
I know of a mother and father who lost their son, who was in his mid-20s, in the Herald of Free Enterprise tragedy. They were told that, under the present law, only parents of children who are under 18 could claim. The father is now heavily involved in the Herald Families Association and speaks bitterly about the restrictiveness and narrowness of the law.
The further restriction on the ability of children to claim is even harder to understand. Admittedly a line must be drawn, but few will accept that it should be drawn as tightly as it is. It is also difficult to see any logic in the distinctions which have been drawn between those able to claim under Scottish law and those who can do so under English law. It really ought not to matter whether a fatal accident occurs in Gretna Green or in Berwick-on-Tweed. I believe that, in this delicate area, people should be allowed the choice to decide how they come to terms with a death caused by someone else's negligence. Some may wish to claim compensation; others may not. The choice should be theirs alone. That is why my hon. Friend has my support in seeking to extend the categories of people entitled to claim and to ensure that there is uniformity beween English and Scottish law.
I also support the Bill's intention to increase the amount available as bereavement damages. Some may argue that there is provision in the Fatal Accidents Act 1976 for the sum to be raised, but the fact is that as yet it has not been increased. On the contrary, it has been eroded by inflation and I am told that its real value has fallen by approximately 40 per cent. to £2,500 since it was introduced. Not only must further erosion be prevented; the amount must be increased in real terms above its present derisory level.
What do we say to the solicitor who complains that one of his most difficult tasks is telling bereaved parents that their child's life has been valued at £3,500? How do we comfort a mother whose daughter was killed by a reckless coach driver and who is told that her daughter's life was worth such a small sum of money? Surely any sum chosen will be seen as reflecting the significance that society attaches to a death caused by the negligence of another person. So my hon. Friend's Bill is an important, albeit limited, first step in the right direction.
My hon. Friend's Bill also tackles a problem that affects people injured in all forms of accident. They range from 545 those on the roads to those that occur in the workplace and to accidents caused by a defective product or a criminal incident. The Bill is a response to the challenge from Mr. Justice Hirst which my hon. Friend spoke of with some emphasis when he opened the debate. I make no apology for repeating Mr. Justice Hirst's challenge to the House. He said in reference to the Opren case that both the assessors and the court had been obliged to base their awards on the levels of damages established by legal precedent, which is binding in law, and he went on to say:There is nothing wrong with critics questioning or condemning these levels, so long as they recognise that only Parliament can change them … So long as the present levels remain in force, the Courts have no alternative but to apply them.That was widely read as a challenge to Parliament to untie the hands of judges. The Bill seeks to deal with the challenge, and it may be our last chance for a long time to alleviate the distress that wholly inadequate compensation can cause.
The Bill would make cases of obviously inadequate compensation less likely, but there is an urgent problem that we must have clarified today when the Minister rises to speak. My hon. Friend the Member for Leigh drew attention, rightly, to the effect that clause 18 of the Social Security Bill, now before the House, will have on reducing damages for pain and suffering. Is the Minister aware how seriously this will exacerbate the problems of people who have been injured? Will he now give a definitive response to the concern which has been expressed about clause 18 in its present form? In doing so, let him reflect on cases like that of the elderly woman, who was left deeply shocked and injured after the Brighton bomb explosion. That may have been the case briefly referred to by my hon. Friend the Member for Rother Valley (Mr. Barron). She spent over a year recovering from the incident. Unable to work, she lost her business. Over four years later the injuries to her leg still cause her intense pain. She frequently falls over and is unable to walk without a stick. The Criminal Injuries Compensation Board, which has to award compensation in line with awards in the civil courts, has offered her £5,000.
I have also had raised with me the case of a 40-year-old woman who was involved in a road accident. She was badly injured when a lorry knocked her down and ran over her left leg. She suffered very severe fractures and her leg was also extensively scarred. She fought a two-year battle to save the leg from amputation that involved six operations, one of which was 10 and a half hours long. Ten years later she is still troubled by soreness and discomfort. She walks with a limp. She cannot walk more than one and a half miles without having to rest for the remainder of the day. Her leg is grossly scarred. The judge in her case described its appearance as "grotesque", a fact of which she is all too painfully aware.
She has no sensation in the leg, so that she is not aware when the scars ulcerate. The leg injury has resulted in a degeneration in her spine and she suffers from a dull but persistent ache in her back. She has been forced to give up work. Her outdoor hobbies have been reduced, more particularly those which involve playing with her two children.
She was awarded £30,000: first, for the pain she suffered at the time of the accident and during the operations she underwent; secondly, for the pain she still has to endure both physically and through the knowledge that her life 546 has been so badly devastated; and thirdly, for the loss she has suffered in being unable to do many of the things which she did before—the loss in her quality of life. Yet her compensation must also cover the extra costs of disabled living. For example, she now has to drive an automatic car which cost her £2,000 more than the standard version. She cannot obtain life insurance. She will have to bear the increased cost of buying a bungalow should she move from where she now lives. When those and the other hidden costs of disability are taken together and costed out over the rest of her life, how adequate is her compensation?
It just cannot be right that individuals can obtain libel damages of £500,000 or more for injury to reputation, but only a few thousand—or even a few hundred pounds—for a physical injury that may handicap them for life.
When I heard my hon. Friend the Member for Leigh talk about the woman who received £7,500 for her terrifying ordeal during the birth of her second child, I was reminded of the libel award made to an actress who was referred to by a well-known television critic as beingan ugly middle-aged rock star whose bum is too big.The actress received an award of £10,000. I am not, of course, saying that damage to reputation is unimportant, but to most people the discrepancies between libel and physical injury awards are absurd.
Some people will argue that awards in defamation cases cannot be compared with those involving personal injury, because their aim, quite clearly, is to punish the defendants. While this may be true, no one has suggested that juries should be abolished in defamation actions, although there has been the proposal that a jury's power should be limited to stating whether the award should be nominal, middling or substantial. If a public input is to be retained in defamation cases, it should be allowed in what many people regard as the far more serious matter of personal injury.
The Compensation Advisory Board will provide that public input and will include people with in-depth knowledge of the effects of disability and injury. It will provide much needed guidance for the courts. All of us can recall cases where there has been a public outcry over a sentence imposed by a judge. Clearly, there is need for judges to pay attention to public feeling over sentences; but equally, there is need for some guidance over the level of awards to compensate for loss in an injured person's quality of life.
One way of involving public opinion would be to reintroduce juries for public injury cases. The Bill does not take that course. It would only lead to uncertainty in the system with differing awards up and down the country. The board proposed in the Bill provides an element of public guidance as to levels of compensation while avoiding the problem of uncertainty. It should do much to reduce the inconsistencies in awards and settlements, which are a major factor in the sense of injustice many people feel. Far from tying the hands of the courts, it will provide them with comprehensive and up-to-date guidance on levels of compensation. Perhaps more importantly, it will be a valuable tool for the thousands of small firms of solicitors up and down the country who are unable to specialise in personal injury work, in guiding them towards the kind of levels of compensation they should be achieving for their clients.
I turn now to the question of actuarial evidence, the introduction of which I support. In this regard, I must 547 remind the House that a working party chaired by Sir Michael Ogden QC, who is also chairman of the Criminal Injuries Compensation Board, and which included representatives of the English and Scottish Law Societies, the Faculty of Advocates and the Bar, as well as of the Institute and Faculty of Actuaries, unanimously recommended that the actuarial tables it produced be used in personal injury cases. I should add that the cost of those tables would be between £3 and £4 from Her Majesty's Stationery Office.
For those unfamiliar with the present procedure for calculating a person's loss of income or the cost of medical care it may seem surprising that actuarial evidence is not widely used by the courts. One would have expected the courts to have taken such evidence into account without being told.
Actuaries spend their lives compiling detailed analyses of people's life expectancy. The insurance industry bases itself on their calculations and many people feel that judges should do the same.
There is another area in which Lord Pearson's report—much praised but, as I have said, almost totally ignored—criticised the present system. The report advocated the greater use of mathematics where it could be useful and called for the introduction of periodic payments instead of lump sum awards. Whether or not periodic payments were introduced, there would still be a need, however, to ensure that the existing system of lump sum payments was improved as proposed in the Bill.
Lord Scarman, whose work with Citcom is so widely applauded, has said:For more than ten years since a Royal Commission reported on the issue, we have known that we need to act on compensation for personal injuries … but we have not done so. I hope this campaign will effectively express the public's impatience.My hon. Friend's Bill represents action and is the most important outcome so far of that campaign. This is a day of action—positive and humane action—and it is our duty now to show that we share the public's impatience by approving the Bill. I commend it most warmly to the House.
§ The Solicitor-General (Sir Nicholas Lyell)
I must begin in the sad but understandable absence of the hon. Member for Leigh (Mr. Cunliffe), by congratulating him warmly first, on his success in the ballot and, secondly and with much more substance, on the clear and balanced way in which he presented the Bill to the House.
It is fair to say that the Bill raises a matter that is in no sense party political. It has cross-party interest and support, and thoughtful cross-party concern and criticism have been expressed on both sides of the House. There will be universal agreement in seeking to attain the objective, which the hon. Member for Leigh said was high in the aims of the Citizen Action Compensation Campaign, of fair and prompt compensation for sufferers of injuries when compensation is available at reasonable cost.
I congratulate the members of the Citizen Action Compensation Campaign on the energy and enthusiasm they have devoted to the worthwhile cause of trying to help people who have suffered misfortunes and the tragedy that is often associated with personal injury. The Government 548 share and welcome the expressions of real concern by members of that campaign and their many supporters inside and outside the House.
The plight of those who have been injured and the distress of those bereaved in large-scale disasters has been highlighted in all our minds in recent times by the apparent amazing series of tragedies and unexpected events. There was the sinking of the Herald of Free Enterprise—where, happily, there was a prompt admission of liability and a prompt offer of settlement—and the fire on the Piper Alpha rig where that was also the case. There was the tragic disaster over Lockerbie, the M1 plane crash, the fire at King's Cross, the explosion at Abbeystead and the train crash at Clapham. What we hear, read and know from experience about such tragedies has brought the subject of the Bill very much to the forefront.
The main distinction between those events, tragic as they are, and the less-publicised, more everyday cases of the pedestrian or motorist injured in a road accident or the pensioner knocked down on the road, is one not of principle but of scale. No hon. Member would suggest that the pain suffered by an individual knocked down on a lonely road at night is any less real than the injuries and tragedy suffered by those who were present on the Herald of Free Enterprise or the relatives of those who died in that disaster; nor are their injuries any less disabling.
In no case—we appreciate this and it has been recognised by the hon. Member for Leigh—can money compensation undo the harm, but its compensatory effect is naturally of great significance to victims and their dependants when a question of dependency arises.
The Bill deals almost exclusively with the levels of damages payable in respect of personal injuries. However, in considering the subject, hon. Members have ranged more widely and sensibly in order to put the Bill in context. The motives behind the Bill can be applauded and its objective—fair and prompt compensation at reasonable costs—has the Government's support.
However, I have some words of reservation. The Government have not yet been convinced that the aids to assessment proposed in the Bill would necessarily provide any substantial improvement in the present system. The Government do not oppose the Second Reading. If it is the wish of the House, we are prepared for the Bill to be considered in detail in Committee. The hon. Gentleman has said that there are many sensible matters which could be discussed in Committee.
At this stage, it is right—if for no other reason than to focus the minds of Committee members—to mention the Government's reservations on the Bill, and the methods that it proposes to try to provide extra assistance and support for the assessment process.
§ Mr. Orme
I welcome what the Solicitor-General said about the Government's attitude and his support for a full examination of the Bill. But where do the Government stand in relation to clause 18 of the Social Security Bill, which relates directly to this problem?
§ The Solicitor-General
I understand the right hon. Gentleman's question and although, understandably, he was not in the Chamber at the time, he will know that his right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) also asked that question. As 549 soon as I have made my general comments to the hon. Member for Leigh, I shall respond to that question, recognising that the Social Security Bill is in Committee.
The award of damages that may be made in a personal injuries action is intended to compensate the claimant for any losses that he has suffered as a result of his injuries. It is not a single sum plucked out of the air or a book, but is usually—particularly in the more complex cases such as those mentioned by several hon. Members—a sum made up of a number of different components or heads of damage, each of which will be carefully assessed by the judge according to the individual circumstances of each case. Only the judge, who knows all the circumstances, can make the proper assessment.
The heads of damage that will be recoverable are well established and fall into two broad categories. The losses suffered may be pecuniary and capable of valuation in monetary terms or they may be non-pecuniary, which are obviously incapable of precise valuation, but on which some value must be placed.
Obvious examples of pecuniary losses include the claimant's consequential loss of earnings or—if he works in private business—loss of the profits that he would have made had he not been injured. Such losses include medical and other expenses that he has incurred.
The most obvious non-pecuniary loss or solatium—as I have learnt from Scottish Members to call it—is pain, suffering and loss of amenity of life caused by injury. If the accident has resulted in death, the deceased's estate may recover the pecuniary losses suffered by the deceased, such as medical expenses incurred before his death, and his dependants are entitled, through the estate, to claim for their loss of dependency.
It is fair to say, and I think that it is acknowledged on both sides of the House, that judges have built up a wealth of experience and expertise in the assessment of damages under these heads, though there is an understandable tendency to say that these matters are plucked out of the air or out of the lawyer's bible, "Kemp and Kemp"; and that there is no good rhyme or reason for the assessment of damages.
The speech of the hon. Member for Rother Valley (Mr. Barron) indicated in its construction—albeit not in the conclusions he wished to draw from it—the great detail that goes into trying to achieve a fair assessment of damages in an individual case. If one considers the tools of the trade such as "Kemp and Kemp"—of which the large book I have here is just one volume—in the context of the very detailed schedule attached to this Bill, which runs to more than 100 items on several pages, one realises the sophistication of the process on which one has embarked. The House will want to reflect on how far a board standing back to consider the matter in, inevitably, general terms can give much assistance to a court which is doing its work properly against a background of existing material.
§ Mr. Barron
I quoted from a newspaper to show the public perception of how the damages are awarded at present. Kemp and Kemp may be a good authority in legal circles, but the public feeling is that the present criteria should be laid to rest. Public dissatisfaction relates to wider issues than those reflected in legal judgments such as Kemp and Kemp.
§ The Solicitor-General
The hon. Gentleman makes a fair point. I trust that this debate, and any further debates 550 on the subject, will assist public perception and help people to realise that when cases are brought to court they are considered against a background of deep knowledge and understanding. I shall deal shortly with the process of bringing cases to court, which has much to do with promptness and, therefore, with fairness and effectiveness. The sufferer will thus be encouraged to come forward and make a claim.
§ Mr. Menzies Campbell
Does the Solicitor-General agree that the Bill does nothing to inhibit the judge's ability to exercise his or her discretion? It merely seeks to add two elements—first, a level of compensation determined by the Board, and, secondly, actuarial evidence. Under the Bill, the judge and the sophisticated exercises that have been referred to would have to have regard for those factors. Far from their discretion being limited, it is, if anything, underlined by the Bill, apart from the requirement to have regard to two important elements which seem to demand substantial support in the House today.
§ The Solicitor-General
I understand what the hon. and learned Gentleman is saying, and I think that, as far as it goes, it is fair and accurate. I think, however, that we must wait and see how the Bill is fleshed out before we can establish to what extent it inhibits the courts. I hope to deal more fully with that aspect in the body of my speech.
§ The Solicitor-General
Will the hon. Gentleman allow me a moment? I shall give him another opportunity to speak, and I certainly wish to address the points that he has made.
The task of assessing the correct damages in individual cases is far from easy, especially the assessment of elements that are to represent losses not intrinsically capable of expression in money terms. It would be unacceptable to all of us, and to the public at large, for a major disparity to exist between essentially similar injuries that have caused similar degrees of pain. On the other hand, the awards must reflect the severity of the injuries and the degree of actual suffering undergone by the individual.
The necessary balance is achieved through the application of a fund of judicial experience. Although I have not done so recently, I practised for a time in this area of law and had to acquaint myself with that fund of judicial experience. I think that the hon. and learned member for Fife, North-East (Mr. Campbell) would support me in saying that it is profound and detailed, and has been built up and subsequently reinforced by the supervisory safeguard of the appeal court.
The complaints heard most often from accident victims do not usually relate to the amount of damages. The usual ground for complaint is the length of time that it can take after the accident to recover the award and the resulting worry and uncertainty during the wait, as well as—here I pick up the sedentary, and accurate, comment of the hon. Member for Rother Valley—the disproportionate expense and complexity that may be involved.
§ Mr. Dave Nellist (Coventry, South-East)
Does the hon. and learned Gentleman accept that for many years compensation has been a major factor for families whose youngsters have been killed on YTS schemes? Until last April, under a scheme analogous to the industrial injuries scheme, industrial death benefit of £52 a week was paid to 551 a single parent and £78 a week to parents for the death of a youngster. The scheme finished last April and compensation is not available to parents whose youngsters are killed on the scheme. The abysmally low level of compensation has been a major factor for that group.
§ The Solicitor-General
I have heard the hon. Gentleman raise that point in the House before, and I am sure that he will continue to pursue it as he thinks appropriate. He will recognise that it is not central to the subjects that we are debating. The hon. Gentleman is dealing with benefits, not damages for pain, suffering and loss of amenity.
§ Mr. John Garrett
The Solicitor-General made heavy weather of the creation of the board, which will be only an advisory board. I know why he did so—the Prime Minister is wholly opposed to the creation of quangos. If my hon. Friend the Member for Leigh (Mr. Cunliffe) alters the Bill and calls the board an agency, the Prime Minister will be in favour of it. She is in favour of breaking up Government Departments so that they consist of agencies. I guarantee that my hon. Friend will receive the Prime Minister's acceptance of a citizens' compensation agency.
So far, the Solicitor-General has referred to people as male.
§ The Solicitor-General
There were more profound aspects to the hon. Gentleman's speech. Males and females suffer injury, and if I said only "male" or "female" rather than "people" I stand rebuked.
I was dealing with how one brings a case before the courts. The report of the civil justice review, which was published in June 1988, is highly pertinent. Its implementation is being carefully considered by the Lord Chancellor. It made a number of recommendations for the reform of litigation in general and personal injuries litigation in particular. The overall aim of the reform, as set out in the terms of reference assigned to the review body by Lord Chancellor Hailsham, isto improve the machinery of civil justice in England and Wales by means of reforms in jurisdiction, procedure and court administration and in particular to reduce delay, cost and complexity.I do not wish to take an unreasonably long time detailing the reforms proposed by the review from which personal injuries litigants can hope to benefit. The form and order of their implementation is yet to be determined. Nevertheless, it is worth outlining—it is highly pertinent to the Bill's intentions, albeit not to the form in which it is put in the Bill—one or two of the proposals that are likely to interest personal injuries litigants.
The review recommended that a number of steps should be taken to ensure that evidence is prepared and exchanged at as early a stage in the litigation as possible. These steps are to include arrangements for prompt release of accident reports by the police and medical reports by hospitals. Changes to the rules of court are recommended, as a result of which medical reports would be served as soon as possible after the issue of a writ, with the possibility of applying to the court for an order for their production within a specified period. The reports are to be supported by up-to-date statements of special damages and loss of future earnings estimates. The objectives of the review's proposals are to encourage greater openness between the parties at an earlier stage, with the aim of 552 encouraging settlements wherever possible and ensuring that each side comes to trial, should trial prove necessary, properly prepared to meet the legal and factual issues which the other side will raise.
§ Mr. Peter Thurnham (Bolton, North-East)
My hon. and learned Friend talked about delay. Is he aware of the long delays that can occur if a child is damaged at birth and the parents do not qualify for legal aid? The parents may be told that they have to wait 16 years until the child has reached an age when it qualifies for legal aid and can bring a case. Is that not absurd?
§ The Solicitor-General
Yes. My hon. Friend makes it sound absolutely absurd. However, this focuses on the problem of legal aid which always arises and with which I shall deal later—the margin between the level at which legal aid is available and the level of wealth necessary to pursue a particularly difficult case. I recognise my hon. Friend's point, but I am not sure that the matter under discussion really relates to waiting 16 years for a child to get legal aid for himself or herself.
Another principal aim of the review's recommendations which may be of interest is the simplification of court procedures to render litigation more accessible to the general public. The review therefore recommended the substitution of one method of commencing proceedings for the various methods currently in use—only one line of entry to the courts, without having to choose between a complex variety. The review also recommended increased use of automatic directions by the court, the adoption, where appropriate, of an increasingly interventionist role by the court, the standardisation and modernisation of court forms and the increased availability of advice from advice agencies and lay persons, among a number of other similarly aimed innovations.
The last block of recommendations that I shall mention were aimed at handling cases at the appropriate level in the court system, remedying the present system whereby they are too often handled at too high a level, at unnecessary cost to the parties and causing unneccessary delays in the handling of other business. The jurisdictional reforms are too complicated to outline here in any detail, but it is clear that much thought has been given in the review to reducing court delays and to providing the right sort of forum for each case. It is interesting to those who have looked into the civil justice review—the hon. Member for Norwich, South (Mr. Garrett) had clearly been reading it—that one of the review's proposals was that cases involving up to £25,000 should be capable of being dealt with in the county courts. The figures for 1986 and 1987 suggest that about two thirds of all personal injury cases would be capable of being comprehended in the county courts. There would be easy cross-access to the High Court if the circumstances of the case made it appear more valuable. People would not, therefore, be stuck in too low a court in the probably unlikely event of it being necessary to move up.
I hope that my brief outline of some principal features of the review show that litigants in general—although it is for my right hon. Friend the Lord Chancellor to make an announcement in due course—can hope for significant advances in the speed and accessibility of justice in the near future.
I should like to come to the heart of the Bill—the Compensation Advisory Board. Clause 1 would set up a fairly large new body, to be publicly funded, for the 553 purpose of recommending the levels of compensation payable in respect of the pain and suffering and loss of quality of life—solatium in Scotland—attributable to particular classes of injury. The list in the schedule runs to nearly four pages, and is obviously not exhaustive even as regards type of injury, as is recognised in clause 2(1)(b), which allows the Board to make recommendations in respect of other classes of injury. There is also provision in clause 2(1)(c) for recommendations to be made for plaintiffs of different ages, or in different categories. Those recommendations, reviews of them and adjustments based on increases in the retail prices index would be published.
Clause 3 would place the court under a duty to have regard to the published compensation levels. Clauses 2 and 3 will rightly focus the attention of the House—and the attention of the Committee, if the Bill proceeds—on some of the pertinent points made by my hon. Friend the Member for Wanstead and Woodford (Mr. Arbuthnot), who gave an example about eye injuries of a continuing nature. The Bill proposes that the board should cover a great range of suffering and, therefore, of compensation. It would be difficult for the board, with the best will in the world, to give close guidance on all of them.
§ Mr. Cunliffe
As I have described the board, it would represent a balance and a mixture of interests. It would be right to include in that mixture expert advice from people close to the scene who have considerable experience of personal injury problems and who know how the injured have suffered. That is an imperative in arriving at what we consider to be the just financial awards. The Solicitor-General talks about a large board, but I remind him that the board is not a quango that will go in perpetuity. It will run for the first year on recommendations and in the second year it will tie up the loose ends.
Let us consider the cost of what the Solicitor-General said was a large board. The Criminal Injuries Compensation Board in its last accounting year cost just short of £5.5 million. The fees to board members alone amounted to £916,000, apart from the costs of the administrative staff. I must emphasise that my board, if set up, would not cost even 15 or 20 per cent. of the cost of the Criminal Injuries Compensation Board.
§ The Solicitor-General
That is a helpful intervention. My comments are intended to focus attention on the real problems on which the board—however expensively or economically set up—will have to focus. The House will want to he satisfied that the board would be able to provide the judiciary with advice that would advance the cause of the litigant. That is why I picked up the example of visual impairment in both eyes or mental and behavioural disorders, which are broad concepts.
The House will be conscious of the independence of the judiciary, which is one of our country's constitutional principles which has always been jealously guarded. There is common ground that it must continue to be protected, for that protection is vital in upholding high standards in the administration of justice. We must be careful not to proceed in a way that might erode that principle.
Apart from the issues of principle raised, the establishing of a new, non-departmental public body is not a measure to be lightly undertaken, as the hon. Gentleman will recognise. It should certainly not be undertaken without strong evidence of need. The many variables that one sees in the four-page schedule, on which the board's 554 recommendations would be based, are among the even more numerous variables that the judges already take into account in assessing damage under these heads.
No two cases raise identical sets of factors, and the judge would always have to consider the individual circumstances of each case, however detailed the breakdown of the recommendations might be. The more detailed the recommendations were, the more difficult they would be for the board to achieve and, in a sense, the more of a straitjacket they might be to the courts.
We have yet to be convinced—although we have minds that are capable of being convinced—that an advisory board would serve a useful purpose and that its recommendations would affect the amounts awarded in individual cases or lead to a saving in time or expense. We should focus our attention on that question because the lawyers among us can envisage that the procedures proposed might in some cases even be used as delaying tactics. I have in mind clause 4, under which parties would be able to apply to have an injury, or particular class of injury, which has not been the subject of a recommendation, referred for a recommendation. It is possible that the reluctant defendant on the look-out for delay might not find it too difficult to present special features of an injury that distinguished it from those already subject to recommendations and thus use the board, in some degree at least, as a means of putting off judgment day or perhaps to make more complex rather than more simple the process of discussion and consideration by the courts.
It would be a pity—unless we are satisfied that what we are doing is correct—to introduce another vehicle for delay-minded defendants in the face of our current endeavours to find ways of reducing the possibility of unnecessary delay.
I know that the hon. Member for Leigh will understand if I answer some of the points raised by others who have spoken in the debate. The right hon. Member for Wythenshawe asked about the recovery of social security benefits from tort damage awards. As the House knows, the matter is being discussed in Committee and hon. Members will not expect me to go into all the detailed arguments that will properly be raised there. The proposal arises first from the 1981 White Paper. Then, in a report of August 1986, the National Audit Office proposed that social security benefits should be recovered by the then Department of Health and Social Security from awards of tort damages.
The National Audit Office criticised the existing system of offsetting a tortfeasor's—a wrongdoer's—liability to pay damages to an injured person by deducting from an award a proportion of the social security benefit that the injured person has received. The National Audit Office said that the defendant should be required to pay to the DHSS the amount deducted from the awards. The position is that when a defendant or his insurer pays compensation for personal injury—whether pursuant to a judgment or an out-of-court settlement—the payer must account to the Department of Social Security for the amount of benefit, as certified by the Department, already received by the plaintiff. This will not apply to small compensation payments of less than £5,000, to which existing rules will apply, or for any period of benefits exceeding five years. I hope that that has clarified the subject of the clause that is being discussed in Committee
The hon. Member for St. Helens, North (Mr. Evans) asked about the Dalkon Shield. In the years following the 555 voluntary withdrawal of the Dalkon Shield from the United Kingdom market, the manufacturers, Messrs. A. H. Robins, have written to doctors on a number of occasions and placed advertisements in the women's press. That information given appeared in an answer given to the House by my hon. Friend the then Parliamentary Under-Secretary of State for Social Security. The decision about funding for local advertising campaigns—for which the hon. Member for St. Helens, North, is pressing—is a matter for individual health authorities, and no doubt the hon. Gentleman will take the matter up with them.
Hon. Members have referred to Opren and the comments of Mr. Justice Hirst. As the House will recall, there were claims against the manufacturers Messrs Eli Lilly and others by about 1,400 or 1,500 plaintiffs who were said to be affected by Opren. The important point about that is that there was no admission of liability by the company, and as a result one was not dealing with a sum of money that affected total compensation. Overlooking that point can lead to a rather misleading impression in the context of the Bill.
The company had offered a global sum of about £7 million, including £2.5 million for costs, and the plaintiffs' solicitors had set up an informal apportionment scheme to distribute the settlement among the 1,400 applicants who considered that they had been affected by Opren. Apparently, most of the plaintiffs accepted the award under the scheme, but about 30 of them challenged the amount of their awards on a summons to Mr. Justice Hirst and the judge remarked that the assessments had been made in accordance with awards by the courts in such cases. I understand that he set up his own arbitration scheme for the 30 objectors and that not all of them have been disposed of.
As I have said, there was no admission of liability in that case and the global figure of £7 million recognised some discount, although we do not know how much, for the hazards of litigation and the acceleration of payment. In the context of the debate, to some extent the case highlights the fact that it is rather difficult to focus one's mind on individual figures.
The next matter that I shall deal with was raised by my hon. Friend the Member for Thanet, North (Mr. Gale), in some detail by the hon. Member for Norwich, South by the hon. Member for Rother Valley (Mr. Barron), and by some other Members who talked about no-fault schemes. Those schemes have been debated in the House on other occasions and I do not want to go too far into the matter, except to say that it seems to have taken up about one third of the debate. No-fault schemes always seem extremely attractive in prospect until one looks into them in detail. That is not to say that they should not be further looked at in detail, and hon. Members will want to look closely at them.
The principal attraction of no-fault schemes is that they are seen as providing standard compensation more promptly and at lower cost than fault-based systems. They have been shown to have—certainly in Sweden and New Zealand—rather serious disadvantages, not least that they can prove more instead of less expensive to administer. They also tend to provide inadequate levels of 556 compensation and sometimes cause undesirable relaxation in the duty of care—a problem has arisen in New Zealand about which people there have publicly expressed disquiet.
While fault may no longer be the criterion by which claims must qualify, there remain some important distinctions that lead to a great sense of unfairness between sufferers who are entitled under the schemes and those whose sufferings may be no less painful but who are not entitled under the schemes. There are new distinctions between, for instance, those suffering as a result of medical accident and those who are congenitally ill or ill because of some infection, or those suffering from the ill effects of treatment which has not fully succeeded but where there is no question of negligence.
There can still be long and detailed arguments in court or at an appropriate tribunal that are very agonising to the sufferer and that will lead to his being denied compensation. As I recall, when this was last raised in an Adjournment debate which I answered, the end question was, "Do we compensate everybody for everything?" The answer that is usually given is that we try to do that by way of a comprehensive social security scheme, which, together with earlier ideas of workmen's compensation, are aspects of the no-fault system.
§ Mr. Lofthouse
Does the Solicitor-General agree that we do not always give compensation even when there is evidence of injuries, for example, to coal miners who are suffering from emphysema? Other countries give compensation, but we ignore such people even when the illness is caused by the industry in which they work.
§ The Solicitor-General
I must defer to the hon. Gentleman whose knowledge of the coalmining industry is much greater than mine although my father-in-law had a great deal to do with emphysema and the compensations to be given because of it——
§ The Solicitor-General
No, he did not—he just worked as a doctor. I cannot give a detailed answer to the hon. Gentleman's question and although I could talk much more about no-fault compensation schemes, I do not want to take too long.
I turn now to the issue of actuarial evidence. Clause 5 is expressed to entitle parties to personal injuries litigation to adduce and rely on actuarial evidence for the purpose of establishing the capital value of any future pecuniary loss. The clause also requires the court to have regard to that evidence. Both limbs of this clause are unnecessary, for reasons which I shall explain.
In personal injury actions, it is often necessary to assess loss of earning capacity and to arrive at a sum which a plaintiff has been prevented by the injury from earning in the future. Essentially, the same assessment is needed where the injury has resulted in death and the claim is for loss of dependency. The established method of calculating that lump sum is to take the "multiplicand"—the plaintiff's present annual earnings—less the amount, if any, that he can still earn, and multiply it by the "multiplier". The multiplier represents the number of years during which the loss of earning capacity will last. The total is then subject to a discount to reflect the immediacy of a lump sum payment in place of the annual or other staged receipt of earnings which the plaintiff would otherwise have expected. The concept of the 557 multiplier and the way in which it is to be estimated is a matter of considerable sophistication in the jurisprudence of the court.
Expert actuarial evidence, which is what we are discussing, including actuarial tables, can be of some assistance in arriving at the right multiplier. They are often used as a tool by the courts, but their usefulness should not be overstated. Actuarial tables appear in Kemp and Kemp, which has been bandied about so much this morning, and can provide indications of probabilities based on a limited number of contingencies, such as average life expectancies. However, the facts that the courts have to deal with in many individual cases involve so many contingencies in the life of the individual whose case is being considered that actuarial evidence, which is general and overall, can make only a relatively small contribution to the overall picture.
On a wider scale, a whole variety of policies may affect the correctness of the multiplier. On a more domestic scale, economic contingencies such as loss of employment may need to be taken into account. This was discussed in great detail between the Institute of Actuaries and my right hon. Friend the Lord Chancellor. It is accepted by the actuarial profession that these matters are not capable of scientific evaluation, that there is no sound statistical basis for them and that they cannot, therefore, fall within the scope of an actuary's or accountant's expertise.
§ Mr. Robert Hughes
The Solicitor-General is making—probably rightly—a case for the difficulties of arriving at value judgments. Does he accept that while one does not begrudge the awards to those who receive large sums in compensation, the attitude that the Government take is negatively neutral, if not hostile, and that that contrasts with the way in which they have suddenly produced £1 million for the Zeebrugge disaster fund, £1 million for the Piper Alpha disaster fund, £250,000 for the Clapham disaster fund and £150,000 for the Lockerbie disaster fund? I assume that the Government make those judgments purely on the ground of emotion, so why cannot they show some emotion for the many hundreds of widows who have received a mere pittance after years of struggling through the courts?
§ The Solicitor-General
I have listened carefully to what the hon. Gentleman has said to see to what extent it is focused on the heart of the Bill and, although I understand the sincerity of his observation, his point does not bear directly on the Bill. In so far as I am directing my remarks, they are a careful analysis of the Bill to try to assess whether the setting up of a new body, which is the primary function of the Bill, will assist the common cause of prompt and fair conclusions to litigation, which is what we are dealing in.
I am not aware of any rule that prevents actuarial evidence from being called. The present position is that the judges may have regard to actuarial evidence, and indeed they do. It is one of the tools of the trade. They will have regard to properly adduced evidence when to do so is of assistance to them. It would be wrong to insist that they should have regard to any particular piece of evidence, actuarial or otherwise, whether or not it was relevant or helpful in the case, simply on the basis that a party had adduced it and sought to rely on it. The judges will understand when it is helpful and when it is unhelpful, and their objective is to do justice.
§ Mr. Cunliffe
We have never claimed and neither do we in the Bill that actuarial evidence is the answer to everything. What we have said is that Pearson and the recommendations of the Law Commission said that a set of actuarial tables had been specifically drawn up for use in personal injury litigation. That is the heart of the Bill. Pearson said that the tables were drawn up by a committee that included every conceivable actuarial and legal professional body. We cannot get any closer to some rational assessment of the terms under which awards should be made and how we should consider the criteria for making them. It must be understood that actuarial evidence is not the complete answer. We believe that under the chairmanship of Sir Michael Ogden, who investigated this formidably, that is the nearest and best that we can use in the present circumstances.
§ The Solicitor-General
I fully understand the hon. Gentleman's point. I commend again the balanced way in which he argues for the Bill. We must decide whether it is necessary to have an Act on the statute book to achieve what can and does already happen. That is the issue on which we must focus our minds.
Clause 6 would modify the statutory provisions dealing with bereavement damages. There has been a good deal of misunderstanding about the nature of a bereavement damages award. The suggestion which is often made is that when there has been a fatal accident the maximum damages award that can be made, regardless of any of the circumstances, is limited to £3,500. That is in no sense the case. It is mistaken to imply that anybody puts that value on a life or that that is the maximum recoverable in a claim. That is not the ca se and never has been. Bereavement damages is a head of damages standing independently of other heads of damages which may be recoverable after a fatal accident. In particular, it should not be confused with a loss of dependency claim which a bereaved dependant may have following the death of a family breadwinner. Bereavement damages was a new head of damages introduced by the Administration of Justice Act 1982 at the fixed level of £3,500, which is criticised.
I appreciate and have listened carefully to that criticism. Everybody recognises that that sum is not intended to represent the value of anything tangible, let alone the value of the life which has been lost. It is offered as some attempt to give solace to close relatives who are left grieving.
The level was fixed at a small conventional sum for all cases—when I began practice, it used to be a much smaller sum, about £450—following the recommendation of the Law Commission, so that there need not be a judicial inquiry into the consequences of bereavement. That would be painful to the families. The Lord Chancellor has power under what is now section 1A(5) of the Fatal Accidents Act 1976, as amended, to vary the sum by order made by statutory instrument subject to annulment. Several hon. Members have made that point. It is not, therefore, necessary to use primary legislation to vary the amount of the award.
§ Mr. Cunliffe
It is now 13 years since that amount was fixed. Does the Solicitor-General not think that section 1A(5) should be rewritten to include a figure which we consider fitting when taking account of inflation and increasing costs during that period?
§ The Solicitor-General
The hon. Gentleman makes a case which I know will be listened to carefully. I do not think I can say more about it than that.
Under the present law, the relations entitled to receive this head of damages are the deceased's wife or husband, and—where he or she was a minor who had never married—the parents. Clause 6 of the Bill would extend the claim to the deceased's parents and children, and any other person who, in the opinion of the court, by virtue of his special relationship with the deceased, had suffered bereavement loss. That is qualified by clause 6(3) to mean relationships which were, in all the circumstances, substantially the same as relationships with spouse, parents and children.
The class of relations entitled under the present Act to claim this head of damages was defined according to the recommendation made by the Law Commission, whose recommendations were made following wide consultation and consideration of other systems of law which allowed similar awards to different classes of relations. It concluded that husband and wife should be treated in the same way as parent and child, but did not feel justified in recommending any further extension.
The Government are demonstrating their real concern in the whole area by introducing carefully considered reforms directed to produce substantial improvements in the position of claimants. Our aim is to achieve worthwhile reform by practical steps which are realistically obtainable and which can be carried forward and implemented effectively.
§ Mr. Alfred Morris
Several anxieties have been put to the Solicitor-General about clause 18 of the Social Security Bill. That Bill, if unamended, will clearly have a seriously adverse effect on what this Bill is seeking to achieve. Will the Solicitor-General urgently inform the Secretary of State for Social Security of those many anxieties?
§ The Solicitor-General
Most certainly. I shall ensure that my right hon. Friend is made aware of what has been said in this debate.
The Government are determined to ensure that legal aid is provided efficiently and effectively and, as part of the Legal Aid Act 1988——
§ The Solicitor-General
I shall not give way, because I have given way very often to the hon. Gentleman.
§ The Solicitor-General
The hon. Gentleman always finds his speeches very short.
The Lord Chancellor has appointed a Legal Aid Board whose task is to improve the administration of legal aid and to consider the arrangements for the delivery of legal services under the Act. The board will formally take up its role on 1 April this year.
The Government are also addressing themselves to other issues concerning the funding of claims. The House will have in mind the Green Paper on contingency fees that was published in January, in which the Government have invited views on whether some of the existing restrictions 560 on contingency fees might be removed, thus allowing the introduction in England and Wales of speculative actions based on, or perhaps going beyond, the Scottish model. Also, in accordance with the suggestion made by the civil justice review body, the Government are exploring the case for extending the availability of representative or class action. That is of great importance for such cases as Opren. I have already mentioned that a large number of recommendations resulting from that review are designed to help all litigants, with a special commitment to personal injury claimants.
The Lord Chancellor hopes to consider the feasibility of a no-fault scheme that could be set up to cover claims—I believe that that is important because small claims also cause much suffering—arising from less serious road accidents. The Lord Chancellor hopes to make an announcement concerning the implementation of the civil justice review recommendations in the near future.
The Government's belief is that the primary need is to enable the courts to work smoothly and efficiently, rather than risk any impediment to their progress by imposing a new superstructure to tell them how to do any specific part of their business. The courts should not be constrained as to the use which they should make of the evidence adduced before them. The civil justice review has recommended the loosening up of the evidence rules in civil cases, and that process would in fact be partly undone by the proposals of the Bill. One of the main purposes of setting up the civil justice review was to speed up civil justice cases and we believe that that purpose might run a real risk of being impeded by the creation of the new superstructure examining compensation levels.
It is evident from our assessment of the proposals put forward in the Bill that the provisions relating to bereavement damages are partly covered already by the existing powers given by the legislation that introduced bereavement damages. Neither the remaining provisions on bereavement damages nor the provisions relating to actuarial damages would, by themselves, justify specific statutory measures.
The leading proposal is, of course, the setting up of the Compensation Advisory Board which would be intended to affect all personal injury cases. The Government are listening and the hon. Gentleman has put his case clearly, but we remain to be persuaded that the board, imposed as a superstructure on the court system, would amount to a significant improvement on the present system or a significant step forward towards the greater aim—it is a common aim—of improving the position of those who have the misfortune to be involved in accidents and to suffer injury.
§ Ms. Joan Walley (Stoke-on-Trent, North)
I shall be brief as we have already had a lengthy debate, to which I have listened carefully, and I know that many of my hon. Friends want to participate.
I congratulate my hon. Friend the Member for Leigh (Mr. Cunliffe) who introduced the Bill. I hope that the Solicitor-General's speech means that the Bill will command the support of the Government if, as I hope, it goes into Committee.
When we are dealing with personal injury cases we should not ignore the huge tragedies with which families must live. It is bad enough that people must cope with the 561 personal hardship and tragedy caused as the result of injuries and accidents, but they must also fight hard to receive compensation at the same time. People's ability to fight so hard in such dreadful circumstances always amazes me. I hope that the Bill commands the support of both sides of the House.
I have two specific comments, one of which relates to legal aid. We have heard a lot about that today and how it is able to support those families who need to make claims. From my constituency work experience, however, I know that legal aid is not always easily available. In one case with which I have dealt it has taken three years to ensure that my constituent has access to legal aid to pursue a specific claim for compensation. I urge the Government to consider the declining availability of legal aid for such claims and to act in the best possible way.
I know that the Bill is a marker and the first stage in the process. I do not think that anyone believes that it will solve all the problems relating to compensation, although I know that many of my colleagues would like it to do that. I realise that if the Bill goes into Committee our discussion will be restricted to it, rather than to the wider issues. It is important to consider, however, people's ability to make claims for compensation. There are many families, including some in my constituency, who want to make claims for compensation but who will be unable to benefit from the Bill should it become law because it is so difficult to prove negligence. That difficulty must be addressed.
I am particularly perturbed about a constituency case involving a woman who was badly injured in a serious gas explosion. Because of the delaying tactics used by British Gas, it was almost impossible even to get the matter to court. I have campaigned for three years to get something done about that case and I would dearly have loved to come to the House claiming that my constituent would benefit from the Bill, which I hope will become law in the not-too-distant future. Sadly and tragically, that lady has now died.
I know that there are many similar cases throughout the country in which, because of delaying tactics, people do not obtain the compensation that they are seeking. Such matters are connected to the Bill and I hope that in future legislation the Government will give serious consideration to speeding up the way in which we deal with compensation claims. I hope that they will look at ways of making it clear to companies—British Gas or whoever—that we are not prepared to accept years of delaying tactics to prevent compensation cases from going to the courts.
§ Miss Ann Widdecombe (Maidstone)
I am grateful to have an opportunity to speak in this debate since it is now obvious that I shall not have an opportunity to speak in another debate. I congratulate the hon. Member for Leigh (Mr. Cunliffe) on the way in which he introduced the Bill. I wish to clarify certain matters which will affect the support given to the Bill by many people and I hope that the hon. Member for Leigh will intervene during my speech.
I am particularly disturbed by the inadequate provision under our existing law for women who suffer after unwanted abortions to which they consented as a result of an incorrect diagnosis of handicap.
562 There is a case before the courts now involving a woman who had to wait six years before being able to bring an action in respect of an abortion she did not want. She agreed to the abortion because she was told that her unborn child was severely handicapped. There is also the case, very much in the public eye, of the Carlisle baby. That mother wanted her child but was also told that it would be severely handicapped. The handicap turned out to be an inherited skin disease that would not have been life threatening and nor would it have impaired greatly the quality of life. She was told, in the alleged parlance of the consultant involved, that her child would be a monster. Therefore, she reluctantly consented to an abortion.
The abortion was carried out at 21 weeks gestation and the child was born alive.
§ Miss Widdecombe
No. I said that in the first case the woman had only just managed to obtain a decision after six years and that the second case was in the public eye. I understand that the mother is still considering action but it is not yet before the courts.I understand what the hon. Gentleman would have said.
The Carlisle baby lived for three hours during which time the NHS personnel did not know what to do and there was no ventilation equipment available. Also, the child did not have the handicap for which it was aborted.
That mother is having substantial difficulties. Is there anything in the Bill that will make it easier and swifter for mothers in such circumstances—those I have mentioned will not be the only cases—to obtain compensation, even though, in the words of one of my hon. Friends, there is no compensation for the loss of a child and even £10,000 million would be too little? I can find nothing in its provisions—unless the mother suffers from a severe nervous disorder—but if the Bill could be extended to cover such cases it would generate a tremendous amount of support and would be welcome. Will the hon. Member for Leigh clarify that point?
§ Mr. Cunliffe
I shall make two points to the hon. Lady. First, the cardinal principle of my Bill is not to deal with fault or liability, which is the job of the courts, but to raise the level of compensation. I have extreme sympathy with the two cases that the hon. Lady quoted, but it is not for me to judge where responsibility lies. If possible, I should like my Bill to embrace all types of personal injuries. If, after judgment has been made and liability accepted, the cases mentioned by the hon. Lady appear to fall within the framework of the Bill, I would relish the idea of supporting her aims.
§ Miss Widdecombe
I am grateful to the hon. Gentleman for clarifying that.
Another large group of women who might benefit from compensation for an injury which is not generally recognised and receives too little attention from the medical profession are those who suffer from what is now recognised as post-abortion syndrome. This affects women who have undergone abortions and received too little counselling.
Often—particularly where young girls are involved—pressure is imposed. Sometimes parents want their daughters to take a particular course of action. Often the 563 options are not fully set out and—as in the two cases that I described—women are panicked into having abortions by being told that their babies will be grossly handicapped.
The physical and psychological effects of post-abortion syndrome are considerable. However, at present they are too little recognised by the medical profession, and it is difficult for such women to come before the courts and ask for compensation.
Those are important considerations that I would have raised later had I been given the opportunity. I should be grateful if the hon. Member for Leigh would address them in more detail. I believe that more explicit provision could be made. If so, it would be very welcome. I am grateful to the hon. Gentleman for introducing the Bill.
§ Mr. Frank Doran (Aberdeen, South)
I join hon. Members on both sides of the House in congratulating my hon. Friend the Member for Leigh (Mr. Cunliffe) on introducing the Bill. As someone who has been heavily involved professionally in the pursuit of damages and accident claims for personal injuries, I recognise that the Bill is a modest measure. However, it reflects the difficulties we face when the Government are not prepared to consider no-fault compensation—at least, I thought that was the case until I heard the Solicitor-General's comments. I was pleased to hear that the Lord Chancellor is considering such a scheme, albeit a limited one.
While the Solicitor-General's comments are fresh in my mind—although he is no longer present—let me make a couple of comments about what he said which are important and reflect the Government's attitude to the Bill. He rightly spelt out the principle that is applied when a court considers damages. He said that the court had to consider different compensation and heads of damages depending on the particular circumstances of each case. He suggested that the Bill attacked that principle in some way. I find it difficult to see how that can be read into a Bill that tries to assist the court in determining the levels of compensation which should apply. The Bill in no way takes away from the court's position.
The Solicitor-General waved about a large tome, Kemp and Kemp, and often referred to it. As a Scottish solicitor, I frequently—though perhaps not as frequently as the Solicitor-General—used that tome when assessing the worth of particular claims.
The Solicitor-General seemed to be contrasting the weight of Kemp and Kemp with the fairly lightweight provisions—as he seemed to consider them—in the schedule specifying the injuries covered by the board's deliberation. I do not accept that criticism. I come from a legal system based on principle rather than precedent. That English common law is based mainly on precedent is clear from Kemp and Kemp, which is a catalogue of court decisions on the level of damages in different kinds of case. The weight of the volume is to do less with principle than with precendent, and I welcome the way in which the Bill attempts to establish the principles on which compensation will be determined, rather than employing the present convoluted, complicated but nevertheless haphazard method, which allows judges to bring their personal views and prejudices to bear.
564 I had intended to say more about no-fault compensation, but I think that every hon. Member who has spoken, except for the hon. Member for Maidstone (Miss Widdecombe), has mentioned it already. The Solicitor-General suggested that there could be no move away from the complexity, difficulty and stress involved in making claims. I consider the most important principle in no-fault liability to be the shift away from the establishment of fault to the establishment of injury. That is the issue that causes the most difficulty and legal argument. Questions such as whether there was negligence and whether there was a duty of care are what consume the time of lawyers and courts. Once the issue of fault has been dealt with, it is not too difficult to deal with compensation. In the vast majority of cases it is negotiated without too many problems.
I have a considerable interest in the North sea. At present 30,000 men are working in one of the most dangerous environments not only in Britain, but in the world, and at times that number has been much greater. I have been closely involved with the Piper Alpha disaster, to which a number of hon. Members have referred. Out of the 167 men who died in that tragedy about 38 were employed by Occidental, the platform operators.
There is a class structure in the North sea. The men employed by the operators—few women work in the North sea—have premium terms and conditions of employment. Their salaries and wages are far higher than those of men employed by contractors; their terms and conditions, holidays, facilities and fringe benefits are far superior. The 38 men employed by Occidental who died in the Piper Alpha tragedy had one significant fringe benefit—an insurance scheme, paid for by the employers, which provided a death-in-service benefit without any question of the establishment of blame. The simple fact of a man's dying in service meant that his relatives were entitled to immediate compensation, in this case £100,000.
The 130 or so other men had no such scheme, being employed by a multiplicity of contractors. That opens up a major issue of principle. All of the relatives of those poor, unfortunate men are now involved in pursuing legal claims. They have been fortunate in that Occidental has been desperate to settle the claims as quickly as possible: eight months after the tragedy I am delighted to learn that the majority of claims have been agreed, and only the details of the negotiations need to be concluded. In the majority of claims for personal injury or death, long, detailed, protracted and stressful legal arguments take place. I ask the Government to consider insurance and employment. The anomalies in the conditions that existed on Piper Alpha exist on every platform in the North sea, and that can be extended to all employment.
Successive Governments have insisted that employers, regardless of the nature of circumstances of employment, provide compulsory liability insurance for their employees. It is a criminal offence for an employer not to provide that insurance or not to publicise or publicly display a certificate of insurance. It is a short step to require employers to provide compulsory insurance, which would offer a death-in-service benefit and remove from the courts and legal system the bulk of cases that require the payment of damages for death or injury. There would be a number of spin-off benefits. I would hope that, under pressure from insurance companies, employers would 565 improve their practices. In addition to other benefits, pressure on the legal aid and court systems would be reduced.
I recommend that step reluctantly, because my main interest is a no-fault compensation scheme that would allow payment of benefit without the stress of legal action and proof of fault. Within the current structure, the proposal for compulsory death-in-service benefit is fairly modest and would lead to a vast improvement. I base that on my experience of the Piper Alpha disaster, but the same arguments would apply to all the recent disasters.
Many hon. Members have spoken about the actuarial clause. The Solicitor-General tried to belittle the Bill's proposals. He suggested that the courts frequently had recourse to actuarial evidence, which they do, but they rely on precedent. Scottish courts use the multiplier system, and the maximum considered is about 15 years. In England and Wales it is slightly higher—18 or 19 years. In the majority of cases, the multiplier bears no relation to reality. I agree with the Solicitor-General that the multiplier is not an exact science and that there are imperfections, but it is impossible to be precise, because many imponderables must be considered. Scientific evidence or the best estimate of lifespan must be considered. Actuarial evidence is the most scientific and best estimate available.
I shall give some examples of how courts have considered the multiplier. A ship's nightwatchman was injured in an accident in May 1982 that rendered him permanently unfit for employment. At the time of the accident he was aged 53, but was 58 at the time of proof, which emphasises the delay before the case reached court. His employer asked for a multiplier of six and a half years to take him up to retirement. The defence asked for a multiplier of two years. The court argued and applied a multiplier of three years. At the time of the accident, he was 12 years below proper retirement age, yet the multiplier applied was three years.
In another Scottish example, the 32-year-old father of a six-year-old and a two-year-old was killed in an accident in December 1978. The mother was not married to him. The court decided that the appropriate multiplier would be 13 years from the date of death. By the time the multiplier expired, the children would have been 19 and 15, one of them still undergoing compulsory education and requiring support. I am conscious of the late hour so shall not go into a mass of similar cases.
I support clause 5 because it brings a greater principle to the consideration of the courts, rather than what can be disparagingly called the hidebound, precedent-based system of common law, which unfortunately has crept north of the border. It is important that we look at the practicalities of the system and what it means for a person who needs compensation. The courts operate on the principle that they should attempt to assess monetary compensation at a level that would put the injured person as near as possible to the position he would have been in had the accident not occurred. The multiplier's application is not based on scientific evidence or principle, except that of precedent, so the courts are manifestly failing to provide adequate compensation.
I thank my hon. Friend the Member for Leigh for introducing the Bill. This has been a worthwhile and valuable debate. It has been enjoyable, too, especially for a Scottish solicitor who, like the hon. and learned Member for Fife, North-East (Mr. Campbell), has had to sit here 566 listening to praise being heaped on the Scottish legal system. That is happening increasingly. We feel confident that we in Scotland have got the system right over the past 500 years and that this part of the country is now just beginning to catch up.
§ 2.6 pm
§ Mrs. Teresa Gorman (Billericay)
Like many hon. Members, I have a strong basic sympathy with the intentions of the hon. Member for Leigh (Mr. Cunliffe) to remedy a shortcoming or wrong in society. I should have thought that it was a natural instinct for almost everyone to want to provide remedies far people who have to wait ages for compensation for injuries, bereavement or loss of earnings. I share that gut feeling.
I am worried that in measures such as this we shift the emphasis from the operation of the law—which should deal with these matters—towards other bodies which we set up, be they industrial tribunals, compensatory bodies or whatever, to plug gaps. I was interested to see my hon. and learned Friend the Solicitor-General in the Chamber and am sorry that he has left. The legal profession is responsible for much of the time that we must spend in the Chamber—not least on Friday mornings—trying to concoct measures to give ordinary citizens access to law that has been made difficult and complicated by the selfishness of the legal profession.
I applaud the Lord Chancellor's moves to simplify and open up the legal profession. I look forward to the day when there is a law shop on every street corner—along with the betting shop, the pub and so on—so that ordinary citizens can walk in off the street and obtain advice and access to an arbitration service that will solve problems quickly and simply. For that reason, I believe that the Bill is not desirable. Those who govern the least govern the best. Yet we are always adding to the body of law or Government orders, as I call them, with which our society is already overburdened.
There are three aspects to this business. The first is the role of the law itself and the Government have a strong responsibility to make the law accessible to ordinary citizens cheaply, quickly and simply. That is important. Secondly, there is the role of the individual and what he or she can do to take precautions against injury and the possibility of loss of earnings. There are many ways in which that can be tackled. Thirdly, there is the role of the market structure in providing the means whereby people can obtain suitable compensation. It is part of the seductive lure of this place that we think that we can ravel up all the ragged edges of society. Life is a messy business, yet there are many times when people of good intent think that they must step in and do something.
My hon. Friend the Member for Maidstone (Miss Widdecombe) made the point about people who go through pregnancy and are than affected by depression. Women can be depressed by a termination of pregnancy that they think was unwise but, equally, they can become depressed by being made to go through with a pregnancy that they do not want. My hon. Friend's long-term intentions would increase the incidence of that, especially for people who have to bear a child after rape, because such women would be forced to go through with the pregnancy. However, I shall not dwell on that.
There are many areas in which people feel that they have a legitimate cause for asking for compensation. Most 567 of the legal technicalities have been dwelt on at length and I do not want to go over them again, or over the fact that the Bill, in trying to lay down specific amounts, is bound to create many anomalies. When we start laying down crude sums, such as a mimimum of £10,000 or a maximum of £50,000, that can work both ways. The amounts suggested often become maxima and, may often not be appropriate. In normal circumstances, damages should possibly be much greater, but the courts tend to lean on the criteria set down by law and that may be to the detriment of people who feel that they have some claim against the system.
The Bill is flawed in trying to lay down actual amounts of money. That could work against people. As an example, let us consider the industrial tribunal, which was originally thought to be one of the protections for workers against employers, who are always reckoned to be the bad guys. In many cases, trade unions and employees believe that the tribunal system works against them. Such tribunals were set up with the best will in the world, but they do not have the long-term effect for which the people who instigated the legislation hoped. That in turn leads to calls for yet more legislation.
It is often forgotten that people have free will and can make arrangements for themselves. They could do more about taking up insurance. It is easy to say that people never do that. However, it is legitimate for the Government to ask for people to be insured against certain things so that the burden does not fall on society. Long before the Beveridge report, we had legislation that required people to carry insurance against sickness. As a result, there were hundreds of little friendly societies which provided that opportunity for people. The process was not difficult because people did not have to go to complicated insurance brokers, as they do today. Somebody came round to the house and collected the sum each week. The levels of compensation and assistance during sickness were often better than they are under the present legislative structure. Individuals could be asked now to carry insurance for injuries, for example. Employers are required to have liability insurance so that they have the financial back-up for possible damages claims against them when people are injured at work. There is a legitimate case for the Government to insist that people have insurance of their own. It need not be complicated or difficult. I am sure that the insurance industry would look for ways of meeting that need.
Similarly, one can insure oneself against the payment of legal fees. Much has been made of the cost of litigation, and I sympathise with those who have referred to it. I have legal expenses insurance; some may think that I need it more than most. It is not the most expensive thing in the world and it is very useful. It means that if one feels that someone is trying to rip one off or that one has a case one does not have to say, "I can't do anything about it." If I need to, I can phone someone up and say, "Look, old boy. You may think you can swing this one on me, but I am legally insured, and as far as you want to go, I'll go too." That sharpens up people's wits and may make them decide not to go ahead after all or persuade them to compensate me out of court. The individual should have insurance of his own.
568 The Government have a role to play in making the courts more open. I am sorry that the Solicitor-General has gone out again, because I wanted to tell him what I think about the legal profession making it difficult for the rest of us to get justice. The Government should make the courts more accessible, cheaper and quicker. All in all, there are better ways of trying to compensate people and get help for the helpless.
Last, but not least, we must remember the role of the welfare state. In addition to any compensation that one might receive the state will support one—albeit perhaps not in as grand a style as one would like. No one in this country goes without, even if injured. We have a tremendously well-developed system for helping people who are in some way unfortunate, whether because of physical injury or mental inability. That is an important part of the way in which we can help those needing compensation.
Although it is well meant, the Bill is not well thought out. We should pay far more attention—as I am sure the Solicitor-General and his colleagues now intend to do—to making the normal process of the law more accessible to individuals so that the courts can take each case individually and work out the compensation that should be arrived at. That is likely to be the best deal that the citizen can get.
§ Sir Hal Miller (Bromsgrove)
A common theme of the last two speeches has been the role that could be played by insurance in helping to solve some of the problems that the Bill rightly addresses. There is widespread concern not only about delay in gaining access to the courts and a decision in court on liability but about the amount of compensation awarded.
Before I go further, I must apologise to the House that I have not been present for the whole debate, although I have been here since half-past nine. I have been trying to deal with a very important constituency matter—the western orbital route. In case hon. Members think that that is rather far from the subject of the Bill, I refer them to a recent campaign and to the scientific agreement, which I think has now been reached, that much damage, injury, pain and suffering can be caused by lead poison. But that is not the purpose of my remarks.
I hope that I will not be subjective, as some hon. Members have been, in speaking about the claim by the supporters of the immediately following Bill that there is a deliberate attempt to filibuster. My record is clear. I have always voted in favour of a reduction in the period of termination and think that a much shorter period could have been achieved much earlier if the necessary good will had been shown by the sponsors of the appropriate Bills.
We are debating injury, pain and suffering. Much attention has been devoted to recent disasters and accidents, but I should like to speak about industrial, occupational and criminal injuries. There is a widespread feeling that the levels of compensation for people affected by such injuries simply do not match some of the awards recently handed down by the courts in libel cases. It has reached such a stage that many of us wonder how we could get a suitable libel against us so that we could bring a successful action and secure a considerable sum of money. 569 Some awards for libel far exceed the cost of the actual harm and bear no comparison at all to the pain and suffering caused by personal injury.
I have read the title, the interpretation and the clauses in the Bill and it seems that it is not confined to personal physical injury. That was why I alluded earlier to the pain and suffering caused to people who live adjacent to motorways or to motorway construction. Considerable pain and suffering are caused by the noise and the obstruction of light, quite apart from the lead poisoning about which I have already spoken. Is the Bill restricted to physical injury?
My hon. Friend the Member for Maidstone (Miss Widdecombe) talked about nervous depression induced by a mistaken medical judgment. In slight contradistinction to her argument I recall the case of a constituent from a poor family——
§ Sir Hal Miller
I have never had any intention of talking Bills out and I do not know which other hon. Members wish to speak. As the right hon. Gentleman well knows, it is open to him to move. That the Question be now put. I do not know how the Chair would respond to that. I have received letters from my constituents asking me to take part in this debate and that is what I am doing.
I am speaking about the different types of injury for which people genuinely and correctly feel they are given inadequate compensation a long time after liability has been established. That is why I welcome what my hon. and learned Friend the Solicitor-General said about some progress being considered towards the introduction of no-fault compensation, which could apply in a limited range of matters. Steps should also be taken to speed up the legal process.
I am thinking of people other than the lady about whom I was speaking when the right hon. Member for Salford, East (Mr. Orme) intervened, who tried to provide sensibly for her family. She had an operation to prevent her conceiving further children above the four that the family already had. However, despite that operation she conceived a fifth child. That was a serious matter for that family and the difficulty encountered by that lady in achieving compensation for that medical mistake drew my attention to the difficulties that people experience.
There is a great deal of argument in industrial occupations about the responsibility for industrial injury. I am thinking of a big firm in my constituency where there is an occupational disease called white finger. I have been trying to establish for several years that that disease should be treated as——
§ Mr. Cunliffe
rose in his place and claimed to move, That the Question he now put.
Question, That the Question be now put, put and agreed to.
§ Question put accordingly and agreed to.
§ Bill accordingly read a Second time, and committed to a Standing Committee pursuant to Standing Order No. 61 (Committal of Bills).