HL Deb 16 March 1978 vol 389 cc1486-91

3.46 p.m.


My Lords, with the leave of the House I wish to repeat a Statement being made in another place by my right honourable friend the Prime Minister. The report of the Royal Commission on Civil Liability and Compensation for Personal Injury has been published today and copies are now available in the Printed Paper Office. The Statement reads as follows:

"The Royal Commission was established five years ago to examine our present practice for compensation for personal injuries, including the particular concern felt about children injured through thalidomide.

"The Government are grateful to Lord Pearson and his colleagues for the work and for the comprehensive report which they have now produced. It contains numerous recommendations for change. The main ones are that:

the two systems of compensation for personal injury through civil liability and through social security should continue to exist side-by-side but with an altered relationship, and that social security should be recognised as the principal means of compensation;

a no fault scheme of State compensation should be introduced for road accidents, to be financed by a levy on petrol: this would provide benefit in respect of injuries, irrespective of blame;

manufacturers should be strictly liable (that is, without proof of negligence) for injuries caused by defective products;

a new State benefit should be introduced for all severely handicapped children whatever the cause of their handicap;

the Government or local authority concerned should be strictly liable for severe damage caused by vaccination where vaccination was recommended in the interests of the community;

the industrial injuries scheme should be extended to cover the self-employed and certain benefits of the scheme should be increased at the expense of employers; and

social security benefits should be fully offset in assessing damages awarded by the courts for personal injuries.

"The Royal Commission's proposals are far-reaching and have important implications. Their implementation would affect consumers, manufacturers, employers, employees, trade unions, motorists, insurers and handicapped children. The Government will therefore study the recommendations with care and urgency and consult interested organisations as appropriate. In reaching their decisions, the Government will have regard to the public expenditure cost of implementing the proposals, which could be considerable.

"As the House will recall, the Government have already announced their commitment to introduce a scheme of payments for severe damage caused by vaccination. Decisions on the form of the scheme have been awaiting the Royal Commission's report. As soon as the relevant recommendations have been considered—and this will be done as a matter of urgency—my right honourable friend the Secretary of State for Social Services will make a further Statement."

That ends the Prime Minister's Statement.

3.52 p.m.


My Lords, I know the House will wish me to thank the noble and learned Lord the Lord Chancellor, for that very important Statement and to congratulate the Commission on the conclusion of five very strenuous years' work. I was in a sense—I do not think I am being unduly egotistical in saying this—the parent of this inquiry, because it was set up during Mr. Heath's Government and it was carried through very largely on my recommendation and despite departmental opposition from other Departments; so I think that the Lord Chancellor's office also deserves a word of praise about it.

I do not quite agree with the statement that it was primarily set off by the thalidomide damage. That was one factor, but only one among others which led the Government to set up the inquiry. It was intended from the first to have the wide-ranging scope that it evidently has had from the nature of the Statement which has been made. I can well understand why the Government wish to reflect upon the importance of these recommendations before acting on any except that to which they are already committed to act upon; namely, the vaccination State benefit. I believe that has already been made the subject of a Government pledge, which I personally welcome. Obviously, that will be the position of the Opposition Parties, too; they will want to reflect upon these wide-ranging recommendations. Of course, they are to some extent independent of one another—for instance, the scheme concerning product liability is independent of the scheme for motorists, as is the scheme for extending social security benefits to the self-employed.

I should like to ask the noble and learned Lord whether the report contains any estimate of the net cost to the motorist of the road accident scheme. Obviously, to the extent that the cost to the motorist is now to be financed out of a levy on petrol, the insurance premium ought to go down in so far as that risk is insured from another source. On the other hand, we do not know from what the noble and learned Lord has said—and perhaps he could tell us about this—whether the basis of compensation is going to remain the same; that is to say, that there is to be the same standard of damages or compensation as is now awarded by the civil courts. It might be that the scheme would be very restricted, and perhaps the noble and learned Lord could tell us about that.

I personally welcome these proposals. I cannot say, of course, what I or my Party will do about them because the implications are so very wide and the legal profession will be profoundly affected by what is proposed, if these proposals were to be put into law. A great deal of the income of the practising members of the solicitors' and barristers' professions comes from certain types of liability. Will the noble and learned Lord perhaps confirm my impression, gained from a first reading, that the employer's liability remains more or less the same?—that is to say, Factory Act cases and employers' negligence do not seem to be affected, at first sight; nor, I think, is professional liability or negligence.

I should like to have the answers to these questions. If the noble and learned Lord feels that I am pressing him too hard, he knows I shall not persist in harassing him; but these may be questions to which he has an answer.


My Lords, I, too, should like to thank the noble and learned Lord for repeating the Statement which was made in the other place. We on these Benches welcome the publication of the report of the Royal Commission and, like the noble and learned Lord, Lord Hailsham of Saint Marylebone, we shall want to consider these proposals most carefully; but the general tone of the report, as expressed in the Statement, is acceptable to us.

The altered relationship which is proposed between civil liability and social security, with social security as the principal means of compensation, is something which we would welcome. I should also like to welcome two other proposals: first, that there should be a new State benefit for all severely handicapped children; and, secondly, the proposal that the industrial injuries scheme should be extended to the self-employed. We shall certainly await with great interest the proposals which the Government will bring forward eventually. I should like to ask the noble and learned Lord whether the Government have any timetable for consultations and for the eventual production of proposals.

3.56 p.m.


My Lords, I am grateful to the noble Lords for speaking; and for their expressions of gratitude to the members of the Royal Commission for undertaking this monumental task and for producing a report which, as the noble and learned Lord, Lord Hailsham, said, is one of great importance and significance. Indeed, it is happy that he is here today, as being in a sense the father of the proposals, although, as he has said, he is not committing himself to accepting them all. We shall have to examine them all in detail and with considerable care. I assure the noble Lord, Lord Banks, that this work will be done as a matter of urgency, particularly of course as regards the proposals in respect of the children who have suffered vaccine damage. I am afraid I cannot give a time estimate on this, but clearly a great deal of the work is of great importance. I assure noble Lords that we shall waste no time in examining the proposals and reaching conclusions upon them. A number of Departments are of course concerned, and co-ordination between the Ministers responsible is being provided for and the machinery is being set up.

I cannot undertake to answer all the questions put to me by the noble and learned Lord, Lord Hailsham, but with regard to the cost of the proposals in respect of road injuries it may well be that an estimate is to be found in volume 2 of the report. Unhappily, I do not have that in my immediate possession, so I cannot give an answer about it. However, I can say that the no-fault compensation scheme recommended for motor vehicle injuries should be modelled, so the Royal Commission recommend, on the scheme proposed for work injuries, with benefits fixed at broadly the same level. They recommend that special provision should be made for children and non-earners, including housewives and retirement pensioners. The scheme they recommend should be administered by the Department of Health and Social Security and should be financed by a levy of about I penny a gallon on petrol. I can see that that will not be regarded as an uncontroversial suggestion.

The improved industrial injury scheme recommended in the report is proposed as the basis for the no-fault scheme for road injuries, but we will no doubt have an opportunity of considering all these matters in detail when an opportunity for further examination arises. The position with regard to injuries in the course of employment is that the basic structure of the current systems of compensation would be retained. I do not think there is to be any substantial departure from that. I have little doubt that when your Lordships, and indeed, if I may say so, I myself, have had greater opportunity of considering this great report which has only just come into my hands, not only shall I be able to answer the questions more, I hope, effectively but we shall be able to have a full discussion of what is proposed.