§ 'The Secretary of State shall lay before each House of Parliament an annual report on the level of damages awarded in cases brought by virtue of the amendments made to the 1976 Act by this Act.'.—[Mr. Lidington.]
§ Brought up, and read the First time.
§ Mr. LidingtonI beg to move, That the clause be read a Second time.
In Committee we had a thorough debate about compensation, in which I expressed fears that have been expressed in various quarters outside the House about the growth of a culture of litigation and compensation mirroring some of the worst examples that we have seen across the Atlantic. However, I welcome the opportunity to draw attention in this afternoon's short debate to the continuing view of Conservative Members that it is important for the Government, and all agencies that will be connected with the enforcement of the Bill once it is law, to have regard to the impact of compensation awards on the public authorities to which the Bill will apply.
Under the Bill, public authorities could be at risk from two directions. First, there would be the risk of litigation in regard to alleged discrimination on grounds of race. Secondly, following the introduction of a positive duty for scheduled public authorities to promote good race relations, there would be the possibility of judicial review of the actions of those authorities, to challenge whether they had exercised their statutory duty in a correct manner.
We should all be concerned about the risk of vexatious litigation, or of compensation awards—or, indeed, out-of-court settlements—to avoid oppressive legal costs that could lead to real difficulties for some public authorities. On 13 April, the Parliamentary Secretary, Privy Council Office, said in Committee—this can be found at column 48 of the report of the proceedings—that the current level of awards in non-employment cases was about £1,000, and that the level of out-of-court settlements in advance of proceedings was about £6,000 per case.
Those figures sound relatively small, but, given that later this afternoon we are to debate the inclusion in schedule 2 of schools and their governing bodies, we must bear in mind that, to a small primary school and its governing body, a sum of £6,000, or even £1,000, is significant. We must carefully consider potential litigation and compensation awards that might face small public authorities, such as schools, which are governed by volunteers, not by professional executives. Even if the Ministers do not concede a formal annual report, I hope that they will agree to keep the matter under close scrutiny and be prepared to return to Parliament to amend the legislation, if the scale of compensation that is required to be paid out under the Bill proves to be oppressive on our public institutions.
§ Mr. Simon HughesI have only three brief points. First, the hon. Member for Aylesbury (Mr. Lidington) has made a perfectly reasonable point.
Secondly, new clause 5, which was not selected for debate—I make no criticism of the selection—goes wider than new clause 4, by addressing a point that is often 523 made during the passage of new legislation, which is that there should be an opportunity for a report to be made to Parliament on the working of the legislation in general. I would welcome such a report as one way of ensuring parliamentary accountability.
My third point relates broadly to damages and emerges from the argument made by the hon. Gentleman. The inconsistency of damages is a national issue: constituents have pointed out to me that if a relative or dependant dies as a result of criminal injury and if one chooses to make a claim under the criminal injuries compensation scheme, one is entitled to a sum of—if memory serves—no more than £10,000, and possibly as little as £5,000.
§ Mr. Gerald Bermingham (St. Helens, South)It is £3,750.
§ Mr. HughesIt is certainly an extremely small sum. The problem is that, at the same time, we read in our newspapers about damages of hundreds of thousands of pounds that are awarded in the civil courts and elsewhere for comments that have caused offence or for constructive dismissal.
The matter may be one for the Cabinet Office or the joined-up government people—whoever they are—because a cross-departmental approach is needed to ensure some degree of fairness in the award of damages. I know that the courts are given guidelines, but damages can be awarded by other agencies. I simply want to draw attention to public unhappiness about the increasing gap between awards made in compensation for serious matters and the huge damages awarded for matters that, in the scheme of things, are relatively minor.
There is a general public policy interest to be addressed and I should be grateful if Ministers gave it their consideration. I hope that someone will write to me and the hon. Member for Aylesbury about how Government Departments intend to approach the matter.
§ Mr. Mike O'BrienI have listened to the comments made about the need to reflect on the nature of payments made to victims of racial discrimination and others. I agree that we do not want to enter into a compensation culture, but missing from the arguments made so far—uncharacteristically so, in the case of the hon. Member for Aylesbury (Mr. Lidington)—has been the expression of any concern about victims. Should victims not be compensated if they have been discriminated against? Of course they should; they should have the right to some type of remedy.
It is quite right that we do not want to get into a situation in which vexatious litigants, who are a pest in the legal system, are able to bring frivolous cases before the courts. To some extent, we have to rely on our judges to be robust in dealing with vexatious litigants, and on the Legal Aid Board to ensure that people do not receive legal aid if they are seen to be merely vexatious. I think that most hon. Members are aware of people, in their constituencies or elsewhere, who have sought to abuse entry to the courts.
We need, however, to get the balance right. There is every reason for Parliament to be concerned about getting the balance right between the victim's right to receive some form of compensation and the need to ensure that money from the public purse is spent properly.
524 Mechanisms already exist to provide annually the type of information dealt with in new clause 4. The new clause would lead to duplication, bureaucracy and costs, particularly if police had to provide extensive information on the reasons why particular types of damages were allocated by a court in a particular case, which may involve issues in addition to racial discrimination. I am reluctant unnecessarily to impose such a burden on police, who are already required to do much of that work under section 95 reports.
Section 46 of the Race Relations Act 1976 already requires the Commission for Racial Equality to produce an annual report that includes a general survey of developments in the issues that fall within the scope of the commission's functions. The commission's reports usually contain details of awards of damages in cases that it represents. Additionally, those reports are laid before the House; indeed, I have just approved the laying of the most recent report.
As explained in the Bill's explanatory notes, in cases represented by the commission in 1997–98, awards averaged approximately £1,000, settlements averaged approximately £2,000, and pre-litigation settlements settled by commission officials averaged approximately £6,000. We would expect the commission to continue to report on damages awarded in cases that it represents, including cases brought under new provisions outlawing race discrimination under the Bill.
Although the Bill does not provide financial remedies in respect of the positive duty in clause 2 to promote race equality, again we would expect the commission's annual report to cover any enforcement action that it has taken in the year in question under the new provisions. The Government therefore feel that the current reporting requirements in section 46 of the 1976 Act already provide for what is necessary and appropriate.
§ Mr. David Winnick (Walsall, North)Is it not alarming—far more alarming than the issue of compensation payments to which the hon. Member for Aylesbury (Mr. Lidington) referred—that public bodies continue to be found to be discriminating, and, therefore, that there continue to be genuine cases of discrimination? Surely the whole emphasis of the Bill should be that, in this day and age, race discrimination and gender discrimination—which we are not debating today—simply should not occur in public bodies.
§ Mr. O'BrienAlthough, by and large, our public authorities do not discriminate, there have been cases in which they have been found to have done so. That is regrettable. The Bill's underlying basis, as my hon. Friend rightly said, is the attempt to end unacceptable discrimination in our public authorities, and to ensure that we have public authorities that treat people with the respect that they deserve and to which they are entitled.
§ Mr. HughesThe Minister mentioned the commission's annual report, which many hon. Members are familiar with and many of us receive. Will it list all the awards of damages or only a summary of those awards? If it contains only a summary, will information be provided to enable people to locate information on the full awards?
§ Mr. O'BrienAs I understand it, there is a summary in the report. It does not list all the awards, because I suspect that some of them are the subject of legal confidentiality. Some may be out-of-court settlements that contain certain clauses in the contracts. I do not know the extent to which the Commission for Racial Equality provides information on the awards, but if the hon. Gentleman wishes me to find out, I can certainly do so. However, I have always found the CRE to be very open in providing information and background briefings on individual and general issues to Members of Parliament.
§ Mr. LidingtonI was somewhat disappointed that the Minister underrated the deterrent impact on public authorities and private organisations of the costs of litigation. One of the most unsatisfactory aspects of several recent highly publicised cases has been that some public bodies have made public statements that they would agree to an out-of-court settlement involving the payments of many thousands of pounds of taxpayers' money, not because they have conceded that they have discriminated—they continue to assert that they have not—but because they could not afford the time and the money that would have to be spent on contesting litigation if matters were to proceed to law. That is not satisfactory for anyone.
I do not dissent from the view of the hon. Member for Walsall, North (Mr. Winnick) that public authorities in particular should set the lead and resist racial discrimination. As far as they can, they should ensure that all their conduct and practices are designed to prevent such discrimination taking place. However, it is also true that different judgments in the court cases involving the definition of indirect discrimination that have taken place since 1976 have determined the scope of such discrimination in different ways. Therefore, it is possible for an organisation—or an individual—to believe that it has acted in a way that complies with the law only to find that, after legal argument, the judgment is that certain practices are tantamount to indirect discrimination under the Race Relations Act 1976 and need to be changed. There is some uncertainty in the current statute.
I was grateful to the Minister for reminding us that the Commission for Racial Equality has a duty to publish a report each year and that that report includes at least some information on the level of compensation awards. I hope that it is a matter to which the chairman of the commission and his team will continue to give their attention. As a result of this debate and those that took place in Committee, I hope that Ministers will also continue to keep the matter under review. I beg to ask leave to withdraw the motion.
§ Motion and clause, by leave, withdrawn.