§ 3.2 p.m.
§ LORD DENHAM
My Lords, I beg to move that this Scheme be approved. Since each of the three schemes that I am to move this afternoon stems from the Family Allowances and National Insurance Act, 1961, I think it would be for the convenience of the House if I spoke on the three together. With your Lordships' permission I will do so.
These three Schemes deal with a group of workers disabled as a result of injuries or diseases sustained at work before July 5, 1948, when the Industrial Injuries Scheme came into force. Let me refer first to the old cases. The Schemes are made, as I have said, under the Family Allowances and National Insurance Act, which was recently before your Lordships and received the Royal Assent on December 20 last. That Act made substantial improvements in the allowances payable to these old cases from the Industrial Injuries Fund.
My Lords, this first Scheme and the following one are concerned with a special group of old cases. These are the partially disabled as a result of certain industrial diseases who fall between two stools; on the one side, the Workmen's Compensation Act, because when the disease manifested itself, they were time-barred from making a claim; on the other side, the Industrial Injuries Acts, because when they worked in the causative process the Industrial Injuries Acts had not come into being. To deal with these men, a special allowance was introduced under the Industrial Diseases Benefits Acts, 1951 and 1954, under which two distinct schemes were made to administer the allowances.
The Pneumoconiosis and Byssinosis Benefit Amendment Scheme was set up for men suffering from these diseases. Pneumoconiosis is the disease caused in miners by coal dust, and which used to be known as silicosis. Byssinosis is a disease in the textile industry, believed to be caused by vegetable matter in the lungs. The Industrial Diseases (Miscellaneous) Benefit Scheme was set up for others suffering from certain malignant but fortunately rare diseases, principally 14 forms of cancer induced by coal tar. This allowance was increased by the Family Allowances and National Insurance Act, 1961, by the sum of 7s. 6d. The main part of these two amending Schemes, which was drafted in like terms, is consequential on the complex of allowances introduced for all these old cases, and is necessary to avoid possible duplication of the new allowances.
The Workmen's Compensation (Supplementation) Amendment Scheme, which will shortly come before your Lordships, is concerned with certain men entitled to workmen's compensation, and may appear to be a little complicated. The principal Scheme, which the new Scheme amends, lays down the conditions to, and the method of administration of, supplementary allowances made to men injured before 1924. The amending Scheme increases the amount of supplementation by 10s. and introduces a new allowance of up to 10s. for an entirely new group of men. These are men in receipt of workmen's compensation in respect of injuries sustained after January, 1924, and before the operation of industrial injuries schemes, and who are not totally disabled by their injuries. Until now these men have not been entitled to a supplementary allowance.
The changes necessary to do this account for the greater part of the amending Scheme, of which the remaining articles are either consequential to Section 1 of the Family Allowances and National Insurance Act, 1961, or are of a tidying-up nature. The penultimate article in each of these three Schemes merely brings them into line with the main insurance schemes, as amended by Section 9, subsection (1), of the recent 1961 Act. These changes are beneficial, and I hope that your Lordships will approve them. I beg to move the first Scheme.
§ Moved, That the Pneumoconiosis and Byssinosis Benefit Amendment Scheme, 1962, be approved.—(Lord Denham.)
§ 3.7 p.m.
§ LORD STONHAM
My Lords, I am grateful to the noble Lord for his clear exposition of these Orders, and for explaining the difference between pneumoconiosis and byssinosis. To most of us, they are words, but to some industrial 15 workers they are dreaded diseases. We have no quarrel with these Orders, but I had hoped that the noble Lord would deal with the words "due care and diligence", which appear in the Orders, having been substituted in the original 1961 Act, on which these Orders are based, for the words "good faith" which were previously used.
I appreciate and accept the fact that it was not thought desirable, when the Orders had been made about the recipients of pensions, in effect, immediately to accuse them of bad faith. What I should very much like to know is how these words "due care and diligence" are to be applied in practice. As I understand it, these Orders apply to men who contracted these diseases before 1948 or, in certain cases, as far back as 1924. Therefore, they are not only very sick men; they are mostly elderly men who have possibly been bed-ridden, and almost certainly homebound. Any of these men who is partially disabled is, as I understand it, soon to get an extra 7s. 6d. a week under the 1961 Insurance Act. But if they are totally disabled these people will not get this extra 7s. 6d. or they are not entitled to it, because they are already to get 15s. extra under the 1961 Act. That is fair enough—at least I hope so.
But we are now asked to pass three Orders which, in effect, will safeguard the Treasury against the possibility that some careless civil servant will pay this 7s. 6d. to these totally disabled men who are not entitled to and we are asking these bed-ridden, elderly men to exercise "due care and diligence" to see that they do not get it; otherwise, they will have to pay it back after they have spent it. I think that is a fair representation of what is in these Orders. That does not seem at all right to us. What do these old chaps know about Statutory Rules and Orders? They read in the paper that they are going to get an extra 15s. a week. But if, instead of 15s., they received 22s. 6d., they would probably regard it as a proper acknowledgement of the increase in the cost of living, and it means that their hard and poverty-ridden lives are made perhaps just a trifle easier.
I should like to ask the noble Lord to tell me whether my interpretation 16 of these Orders is fair and correct; and, if so, precisely what "due care and diligence" is required from these men to see that they are not overpaid. I should also be glad if, in the course of his exposition, he would give us precise examples of the kind of cases where repayment would be demanded.
§ 3.10 p.m.
§ LORD CHORLEY
My Lords, I am very glad that my noble friend has drawn attention to this point. It seems to me that the new Regulations lay down a very much severer standard for these people than do the old ones. After all, they include not only the actual allowance itself, but also death benefits, so that presumably a widow, or somebody like that, may have the burden of proof put upon her. Surely, it is not unreasonable that a man or woman of this kind, receiving this money, should be entitled to assume that the calculations have been accurately made by the responsible officer who has had the handling of the problem at an earlier stage. It was, I suggest, with that point in mind that the test was originally made a test of good faith, which it is obviously very much easier for the workman or the widow to satisfy.
I would remind Members of the House that, in the case of an inaccurate statement in a bank passbook or a bank statement, the customer of the bank is entitled to rely on the bank having done the calculations accurately. If he then proceeds to draw on the amount of the balance which is shown in his statement and to spend the money, in order to recover it from him the bank must satisfy the judge that the man acted in bad faith in spending the money. There, my Lords, you have a man who is a business man, and who has that advantage. Why, with this perhaps old and comparatively illiterate man, should the very much higher standard which is laid down in these Regulations be insisted upon? I suggest that my noble friend Lord Stonham is absolutely right when he indicates that there is a much higher and severer standard imposed by this Regulation than by the earlier one, which required only good faith, and, in effect, in asking for an assurance that it will not be rigidly enforced against these unfortunate men or their widows.
§ 3.12 p.m.
§ LORD GODDARD
My Lords, when this order was before the Special Orders Committee I, too, raised a question on this proviso; but it seems to me that, hidden in the proviso, there are one or two very important matters which may become matters of principle and appear in later Orders and cause a considerable amount of difficulty to the courts. In the first place, the position is that the amount of compensation to which a man is entitled is not a very simple matter of calculation. In the days when I used to practise in the county courts in workmen's compensation cases (I agree it is a very long time ago), there was very little difficulty in assessing the amount of compensation that a man should receive: it was half his weekly wages. Nowadays, it is necessary to take into account the Pneumoconiosis and Byssinosis Benefit Act, 1951, as extended by the Industrial Diseases (Benefit) Act, 1954, and as amended by Section 4 of the National Insurance (No. 2) Act, 1957, and by Section 1, subsection (3), of the Family Allowances and National Insurance Act, 1961.
I should therefore venture to say that no workman—for instance, the man who sweeps the floor in the factory, who is liable to get infected with this dust—has the least idea how much he is entitled to until he is told by an official. When he is told by an official, he naturally will assume that the official is right. If the official has unfortunately misunderstood one or two of these Orders in here, he is in exactly the same position as the bankers were in the case to which my noble and learned friend Lord Chorley has referred—a case called Holt v. Markham, where a bank paid an officer more than he was entitled to, and a gratuity. The court there held that the bankers were not entitled to recover it, first, because they misconstrued the Orders—and it is a well-known principle of English law that money paid under a mistake of law is not recoverable; and, secondly, as Lord Justice Scrutton very emphatically pointed out in his judgment, because if the bankers paid money to the man, or credited it to his bank account, they induced him to believe that he was entitled to the money, and if he spent the money he thereby altered his position, and so the bank was estopped from obtaining the money.
18 Now here, my Lords, bad faith is not in question, because bad faith has been taken out of the Act. However, it is said that workmen will have to repay except in cases… where it is shown to the satisfaction of the Administrative Board that in the obtaining and receipt of those sums the person concerned and any person acting for him has throughout used due care and diligence to avoid overpayment".Of course, when a man goes to receive his money he will assume that the person who pays him knows what he is doing, and if he gets a little more than he got last time, I think it is too much to suppose that he will say, "Here, look what you have paid me. Are you quite sure it is right?" He will think it is a blessing from Heaven, and he will pocket it and go off—and why not?
Where I think the danger is here, among other things, is that it is altering the well-known principle of the onus of proof. If the Administrative Board want to say that this man has been overpaid and has not shown due diligence, then let them prove it. Under this Order, he has to show that he has used due diligence. That seems to me to be turning upside down the well-known doctrines with regard to the onus of proof in English law. Let the person who affirms—that is to say, the Administrative Board—prove. The person who has received the money is entitled to hold it until it is shown that he has not used "due care and diligence." I protest that it is a dangerous thing to allow these Orders to alter the whole principle of the burden of proof as understood by the Common Law of England, and to put the burden of proof on the individual. I think this matter is one which ought definitely to be seriously considered by this House.
§ LORD SILKIN
My Lords, the noble and learned Lord who has just spoken has, I am sure, impressed the whole House that this is a matter which ought to be looked at again. It is a serious matter. In the normal case, where a person is overpaid owing to a mistaken view of the law, as the noble and learned Lord pointed out, there is no right of recovery. This Order expressly creates a right of recovery, and does so by administrative means: by merely knocking the amount of the overpayment 19 off the future sum to be paid to the person entitled to be paid. He has no voice in the matter at all. What the person will find is that he has been getting a certain sum of money for a period, then the mistake will be discovered, and in the future he will have the money knocked off his payments until such time as the amount has been recovered. I am sure that that is not seriously the intention, and I think the whole House will feel uneasy at approving this Scheme without the matter being further considered. I suggest to the noble Lord that it would be wiser if he took this Order back and asked his right honourable friend to look at it again in the light of what has been said by my noble friends and by the noble and learned Lord who has just spoken.
§ 3.19 p.m.
§ THE LORD CHANCELLOR (VISCOUNT KILMUIR)
My Lords, I am grateful to the noble Lords and to my noble and learned friend Lord Goddard for raising this point; but I should be grateful if your Lordships would just listen for a moment to the circumstances; because I think that, if your Lordships appreciate the reason for, and the effect of, the change of words, you will see that the workman is not damnified in any way.
As your Lordships are aware, the old form of words wereacted in good faith in all respects as to obtaining and receipt of the money".Then as the noble Lord, Lord Stonham, pointed out, in Section 9 (1) of the Family Allowances and National Insurance Act, 1961, the new wording came in—namely,throughout used due care and diligence to avoid over-payment".My Lords, it is important to realise that these new words were brought in, as I said, before the Family Allowances and National Insurance Act was passed. A person who had been overpaid benefit or family allowance was required to repay it unless he satisfied the determining authorities that he had "acted in good faith in all respects as to the obtaining and receipt of the money". The onus was upon him to show that he had acted in good faith in all respects as to the obtaining and receipt of the money. The fact is—and I think all your Lordships, 20 if you were considering the position of the claimant, would agree—that in consideration of this, the wording of the criterion which I have just read, that he "acted in good faith in all respects", caused offence to claimants, because a claimant considered that it carried an imputation of dishonesty if there were any case for repayment. That is something which I have urged your Lordships is a matter that ought to be considered.
These words are interpreted under the Insurance Scheme, as your Lordships know, by the National Insurance Commissioner, who is the final determining authority. He has to construe these words according to the actual functioning of the Act, and he construed the old words in this way. He held that "acted in good faith in all respects" did not merely mean "acted without fraud or deliberate deceit", but that it also meant "acted honestly and frankly at every stage, with the positive idea of not leaving the determining authority ignorant on any point which that authority might regard as material". That was the construction of the old words under which this Scheme was carried on; and I remind your Lordships that the Commissioner is the final authority and his construction is the mandatory construction which is applied. So that, under his construction, a claimant who had no intent to defraud but who was careless or forgetful might be required to repay any overpaid benefit, and he might understandably resent a finding that he had not "acted in good faith". That was the problem, to express the same legal position in words which would not offend a claimant, and I think your Lordships would agree that that is a reasonable approach to the matter.
That is the aim of the alteration in the wording of the provision made by the 1961 Act, which was to avoid giving offence or causing distress in any way, A person who has been overpaid benefit or family allowance is now required to repay it unless he has "throughout used due care and diligence to avoid over-payment". That formula has been devised to reproduce the substance of the previous law without giving rise to the implication that a person who is required to repay must necessarily have 21 acted in bad faith. My right honourable friend and those who advise him have considered this matter carefully and they are of opinion that no material alteration in the field of cases affected is anticipated. The new words will really carry out what the Commissioner has construed the old words to mean.
While the noble Lord, Lord Stonham, will appreciate that I do not want to give a ruling in a concrete case, because it is for the Commissioner, and not for me, to decide how in cases it should apply, I should like to be as helpful as I can on the question as to how it will be applied; and if the noble Lord will take it with that reservation, that this is how I would apply it if I were Commissioner, then this is how it would be applied to my knowledge. It means, as I said, that if the claimant had acted honestly and frankly at every stage, and with the idea of not leaving the authority ignorant on any point which appeared material to the claim which might reasonably be put before him, then he would be within the words. If he had deliberately refrained from inquiry—and I hope the noble Lord will appreciate the force of the word "deliberately"; it is not just a matter of fringe forgetfulness, but that he deliberately failed to make inquiry when any reasonable person in his position would have done so—or if he were to disregard regulations which are put to him, then I think he might be in difficulty. But so long as he has acted honestly and frankly, and with the intention of not leaving the determining authority ignorant on any point, then I do not think that he has anything to fear.
§ LORD STONHAM
My Lords, would the noble and learned Viscount allow me to interrupt him for a moment? Before he leaves this point, could he at least give an example of the kind of material fact whose suppression would be regarded as not exercising "due care and diligence"? Is he referring to a man who is getting a dependant's allowance, but no longer had a dependant and had not disclosed the fact? Is that the kind of material fact he means?
§ THE LORD CHANCELLOR
Yes, that is the sort of point. I was going on to say that the determining authority 22 will be able—and I think this is one of the points which noble Lords had in mind in former cases—to take into account all the personal circumstances of the individual claimant, such as illiteracy, illness, deafness, and so on. I give as a full undertaking that they will be, as I am told they always have been, taken into account. But the main point—and this is the reason why I have dealt with the matter at length—is that I wanted your Lordships to know exactly how the old words were construed and worked. I have considered this more than once, and I do not see any change in the new words. It might be that my noble and learned friend or I myself would not have given the same construction to the old words. I think my noble and learned friend Lord Goddard would agree that the construction given was, we would say, uberrimae fidei. That is the construction which the Commissioner has attached to the wording, and in view of that, the new words do not make a change as against the claimant; but they do get rid of this much resented suggestion that anyone who had to make a repayment had acted in bad faith, and I think we ought to do that for the sake of the claimant.
§ LORD GODDARD
My Lords, my main point here is not the actual words used, whether "good faith" or not, but the question of the onus of proof. I say that the onus of proof in this Order is contrary to what I have always understood to be the Law of England. It is put upon the defendant instead of on the plaintiff.
§ THE LORD CHANCELLOR
Perhaps my noble and learned friend did not hear my answer; I said that the onus of proof was exactly the same under the old regulations.
§ THE LORD CHANCELLOR
That is a different matter. The Regulations were passed by your Lordships with no complaint from anyone, and under these Regulations the onus of proof is in exactly the same place.
My Lords, I think that I can support my noble and learned friend the Lord Chancellor, because a case of this kind actually 23 happened to me over sickness benefit. When I was seriously ill last year, I drew sickness benefit, and through a mistake of my doctor I drew 14s. 9d. over the amount which I should have drawn. I received a letter from the Ministry saying that the inference was that I had acted in bad faith in drawing the 14s. 9d. but that, if I wanted to keep my 14s. 9d., I had to prove to the inspector that I had not acted in bad faith. Therefore, I can back up my noble and learned friend in saying that the old words, which I feel were offensive, had exactly the same effect as the new words, which perhaps are rather less unpleasant to the recipient.
My Lords, with the indulgence of the House, I should like to say a few words. Of course, I should have been here when the matter was debated, but I was unavoidably prevented from coming here in time. I wish to support my noble and learned friend Lord Goddard 100 per cent. In fact, I go very much farther than my noble and learned friend. The recipient should not come into the picture at all. If he ever behaves in a fraudulent manner, then, of course, different considerations arise altogether. For example, if the recipient goes on receiving money in respect of a dependant when that dependant is dead, that is about as clear a case of fraud as I ever heard of; and in such a case the ordinary law will deal with the matter. But in this case, apart from any question of fraud, the recipient should not be in the picture. If I go to a bank to cash a cheque, and the unfortunate cashier pays me too much, and subsequently the mistake is discovered, what has happened puts me morally under an obligation to repay that money. Legally, however, the damage falls upon the unfortunate cashier who is the payer-out of the money. He has to account to his bank for the overpayment he has made. A similar situation arises here. I think that these words, whether they are an improvement on the old or not, should be left out altogether, and there should be no burden of proof upon the recipient at all. I think that my noble and learned friend Lord Goddard has raised a most important point, and I hope that we shall go to a Division.
§ LORD CHORLEY
My Lords, I am grateful to the noble and learned Viscount on the Woolsack for what he has said, because it explains how this matter has arisen. I can understand the difficulty, but may I put two questions to him?
EARL ST. ALDWYN
My Lords, I do not wish to curtail the discussion on this matter, but we do have Standing Orders in your Lordships' House, which provide that a noble Lord can speak only once on matters of this character. If the noble Lord has a question to put, would he put it briefly?
§ BARONESS SUMMERSKILL
My Lords, may the noble Lord speak if he has permission of the House? Can we grant him permission?
§ LORD CHORLEY
My Lords, my two questions are these. The noble and learned Viscount said that if he had had to give the decision given by the Commissioner he might have given a different decision. But surely the Commissioner is giving the meaning which Parliament has used. Would not the noble and learned Viscount agree with me, therefore, that Parliament might alter the words in order that the Commissioner might give a decision more in accordance with the feeling of Parliament? That is the first question. My second question is: would it be possible for us to amend this particular Regulation in order that the point of the noble and learned Lord, Lord Goddard, is carried out and the burden is put upon the Administration to show that a man acted in bad faith in taking money instead of placing the burden upon a minor or his widow?
§ THE LORD CHANCELLOR
My Lords, with regard to the noble Lord's first point, of course Parliament can alter the words. But Parliament has just altered the words in this direction, in an Act which was passed only last year—Section 9 of the Act of 1961. So Parliament has chosen the words that we have put in these Regulations. Your Lordships passed them and found no fault with them. Therefore the position of Parliament is quite clear.
On the second point, I thought that my noble and learned friend Lord Goddard was suggesting that we had 25 altered the onus of proof and put it on the claimant. We had not, and when I challenged my noble and learned friend on that, and said that that was the position under the old Regulations, he agreed with me, but suggested that it should not have been so under the old Regulations. The onus of proof goes right back to the Labour Party's introduction of these Regulations and this method of administration and it has always seemed right to do it in this way.
The only reason why this trouble has arisen is that we have tried to meet the claimants' resentment. My noble friend Lord Grenfell has voiced this resentment at the suggestion, if there is any question of repayment, that claimants are acting dishonestly. They have to prove their own honesty and therefore there is this suggestion of dishonesty against them. I ask your Lordships not to resent or divide against something which is intended to meet what I think, like my noble friend Lord Grenfell, is a legitimate grievance of claimants, and not to alter the law in any way from what it has been in the past, since this method of procedure has come into operation. We have considered this point. I have told your Lordships exactly why it is done, and I ask your Lordships to support the amendment of the Regulation.
§ On Question, Motion agreed to.