FATAL ACCIDENTS (DAMAGES)BILL [H.L.] (Hansard, 6 August 1907)

§ LORD COURTNEY OF PENWITH
My Lords, in view of the important and interesting Bill which awaits your Lordships' consideration this evening, I shall be as brief as possible in explaining the purport of the measure to which I ask the House to give a Second Reading. Your Lordships are aware that before the passing of what is commonly called Lord Campbell's Act the relatives of a person who met with a fatal accident in England through the negligence of another had no right of action against the negligent person. The law of England differs in that respect from the law of Scotland, which in such a case gave a right of action to the next of kin, not only for damages but also for what is described in Scottish law as a solatium for the loss incurred. The law of England being thus altered by Lord Campbell's Act the question of the construction of that statute arose in a case where a person who was killed had insured his 1691 life, and the negligent defendants contended that the amount recoverable under the insurance policy ought to be deducted from the damages which might be assessed by the jury; and the jury were directed to deduct the amount so received. That is held to be the law of England to this day in respect to compensation arising in cases of fatal accident through negligence.
The law is different in respect to claims arising from accidents which are not fatal. In the case of an accident which was not fatal an attempt was made, in an action for damages, to get the amount of the insurance policy deducted from the amount of damages otherwise recoverable. That case went to the Court of Exchequer Chamber in 1874, and Lord Bramwell delivered a reasoned judgment against the deduction of the policy money from the damages otherwise recoverable. He argued that the policy was a thing which the person who had entered into it had paid for by his premiums, and that the money he was entitled to receive under it ought in no case to be taken into account in the diminution of damages. It was held that to allow the amount to be so deducted was in fact giving the wrongful person an advantage for which he had no kind of claim. Therefore, the law in England up to this time is that where a person is killed the amount of the insurance money may be deducted from the damages recoverable under Lord Campbell's Act, but that where he is not killed no such deduction is permissible. I think there is a strong argument in favour of making the law of England in respect of fatal accidents the same as in the case of non-fatal accidents, and therefore similar to the law of Scotland.
Parliament has already, in fact, decided in this sense, for as far back as 1864 a railway passengers' insurance company passed a private Bill under which it was provided that in the case of a fatal accident arising in connection with any policy of insurance effected by that company, the damages recoverable by the representatives of the deceased person should not be liable to any deduction on account of any money received under that policy. Two other companies have come to Parliament this year and have obtained Acts of Parliament giving them the same privilege. It is difficult to imagine under what principle the negligent person could 1692 claim the advantage of the policy. I might refer your Lordships to a case which arose in Canada, under an Act which, I believe, is identical with Lord Campbell's Act, where an attempt was made to obtain the reduction of money receivable under a policy of insurance from the total amount of damages re coverable in fatal accident. That case came, on appeal, before the Privy Council, who, through the mouth of Lord Watson, practically overruled the construction put upon Lord Campbell's Act; and in the case of Canada, at all events, the sum payable on the death of the deceased under any contract of insurance cannot be deducted. In these circumstances I hope your Lordships will assent to the Second Beading of this Bill, which makes general that which your Lordships' branch of the Legislature sanctioned this session in the case of two private companies.
This anomaly has been brought before my notice as a director of an insurance company, but it appeared to me to be a matter of public interest, and I have not hesitated to bring it to the notice of your Lordships. I observe that the noble Lord opposite, Lord Balfour of Burleigh, has placed on the Paper a dilatory Motion with respect to this Bill, but after what I have said I hope he will not press it. If, however, there is any serious desire for further opportunity for the consideration of the measure I shall have no objection to postpone it. But the matter is so simple that I can recommend it to your Lordships with confidence. I beg to move.

LORD BALFOUR OF BURLEIGH,.
who had given notice, on the Motion for the Second Reading, to move to resolve:— That it is not expedient to proceed further with the Bill without more time for the consideration of the subject than is provided between July 31 and August 6. said: My Lords, as the noble Lord has said, an Amendment with regard to this Bill stands in my name on the Paper. The noble Lord has been good enough to characterise it as a dilatory Motion. The position I desire to adopt is that of an anxious inquirer, and I think that a humble layman like myself has some reason to complain of the length of time which we have been given to consider 1693 this Bill. It appeared in print for the first time last Friday; it has not been through the other House of Parliament, and has not, therefore, been discussed, and we have not yet had an opportunity of informing ourselves about it through the usual channels of information. Yesterday was Bank Holiday, and it has been impossible since Friday to get any legal advice from those who generally advise me on such a subject as this, and therefore, as I say, I assume the position of an anxious inquirer. The phraseology of the Bill seems to be very distinct, but it may not tell all its own tale. The Bill provides that — In assessing damages in any action, whether commenced before or after the passing of this Act, under the Fatal Accidents Act, 1846, as amended by any subsequent enactment, there shall not be taken into account any sum paid or payable on the death of the deceased under any contract of assurance or insurance, whether made before or after the passing of this Act. I confess at once that I am absolutely unable to say what the legal effect of this will be when considered with the long series of Statutes with which it is incorporated. We know quite well that Parliament last year passed a Compensation Act which has involved a great many people in the insurance of their domestic servants. I daresay that was a right thing to do. But is the effect of this Bill to make us not only liable for the insurance which we undertake as a matter of precaution to prevent being cast suddenly in damages under the Act, but also personally liable, and is the insurance not to be taken into account in the compensation to be awarded? The noble Lord, I see, dissents from that view. I can only say, if I am wrong, that I raise the point because, owing to the extreme shortness of the time, I have not had an opportunity of ascertaining what the precise legal effect of the Bill would be. I am entirely in the hands of the legal Members of your Lordships' House. If they say that under all the circumstances this is a proper Bill to pass, I will, with the leave of the House, withdraw my notice. But the noble Lord in his speech revealed to the House the fact that in more than one case the provision sought to be enacted by this Bill has been given to certain insurance companies by private Bill. That seems to me a sufficiently astonishing thing. I thought it was one of the canons of private Bill legislation that private Bills were not 1694 to override general Acts of Parliament. I am informed that not only has that been done this year, but that there is at least one precedent in previous years. I believe it was done this year by a Committee over which Lord Ribblesdale presided. I am informed that, in allowing the clause, the Committee stated that it had been impressed upon them that an alteration of this character in the general law should be made. If they knew that this was altering the general law I submit that they committed an error of procedure and should not have allowed the clause: and I am surprised that the guardians of the House should have permitted that clause to pass without calling attention to it. The insurance law on a point of this kind should be universal. This Bill effects a grave alteration in the general law, and I do not know, of course, what chance it may have in another place. It is ostensibly a private Member's Bill here, but there are facilities for what are called "starring" a measure in another place; and if your Lordships, without due consideration, give your consent to the Bill, it would not be safe to do so relying upon its being carefully examined in the other House, because, under the conditions one sees prevailing there, it may slip through in the small hours of the morning without any adequate notice, or, at any rate, discussion.

§ THE EARL OF HALSBURY
My Lords, I confess I regard this Bill with very great suspicion, and I think it requires considerable discussion at the hands of your Lordships. If the noble Lord will allow me I will point out to him the reason for the law as it was laid down, and show how entirely inapplicable it is to the question we are at present discussing. There was a collision between two vessels, the injured vessel being insured, and it was laid down that the amount receivable in respect of the policy of insurance could not properly be deducted, but upon this ground—that it was an act of negligence which caused the damage. The point was that the negligent owner had no right to the deduction of money received under a private 1695 contract. Accordingly, the insurance money could not be deducted from the amount of damages recoverable by the owner of the injured ship. I am rather startled to find that decision put forward to justify a Bill applying the principle to a person who, for instance, has effected an insurance at his own expense for the express purpose of protecting himself against damages which his servant might recover. As I read this Bill, you will not be able to deduct the fund you have yourself created when you are sued by your servant in respect of injury suffered by him.

§ LORD COURTNEY OF PENWITH
It only applies to proceedings under Lord Campbell's Act.

§ THE EARL OF HALSBURY
This is not a contract made by the injured man himself, but by the employer for his own protection. With what justice can it be said that that sum is not to be deducted from the damages recoverable? It seems to me to be a very unjust proceeding, and, so far as I can see, there is no ground whatever for it.

§ THE LORD CHANCELLOR (Lord LOREBURN)
My Lords, I think there has been a misunderstanding. In 1846 an Act, called Lord Campbell's Act, was passed, under which the relatives of a person who had been killed by the negligence of another were for the first time entitled to recover damages. It was then held that if the person who was killed had been insured, say, for £1,000, when the jury were disposed to give, say, £2,000 damages, they were bound to deduct the £1,000 for which he was insured, giving thus a verdict for £1,000. That seemed to me unfair, because the person who had committed the wrong was receiving the benefit of the providence of the person injured. The purpose of this Bill is to provide that in such a case as I have instanced, the insurance should not be taken into account by the jury. Moreover, the privilege of non-deduction has been given by private Acts to several insurance companies, and it is desirable that there should be uniformity. His Majesty's Government are in favour of the Bill and will support it, and I sincerely hope there will be no division on the Second Reading.

THE CHAIRMAN OF COMMITTEES (The Earl of ONSLOW)
My Lords, I only rise in view of the statement which was made by Lord Balfour of Burleigh, that he was surprised that a Committee of your Lordships' House had allowed a private Bill to make an alteration in the general law. Private Bills frequently have this effect; and to lay it down that private Bills should not make alterations in the general law is a new doctrine, and one that could not be substantiated without giving rise to great inconvenience.

LORD BALFOUR OF BURLEIGH
My Lords, I think it better, after what has been said, not to occupy the time of the House by dividing; but the Bill will require further consideration at a subsequent stage. I therefore withdraw my Motion.