LORDS AMENDMENT (Hansard, 11 July 1990)

§ Lord Henley
My Lords, I beg to move that the House do not insist on their Amendment No. 7 to which the Commons have disagreed for the reason numbered 7A and do agree with the Commons in their amendments to the words so restored to the Bill. At the same time, I should like, with your Lordships' agreement, to speak to Amendments Nos. 8, 9, 10, 11, 12 and 13 with reasons numbered 8A, 9A, 10A, 12A and 13A, and to Amendments Nos. 14, 15 and 16.
As I mentioned earlier, in responding to my noble friend Lord Peyton, because of the odd moves of noble Lords opposite we were prevented from discussing Schedule 1. At that time, the noble Lord, Lord Byron, had tabled certain amendments. I am sure that we would have had an interesting debate had he been given an opportunity to move them. However, I have since met the noble Lord, together with representatives from the Law Society, and we had an interesting and fruitful discussion on the issues.
I am sure that the House will warmly welcome the amendments to Schedule 1 which address an important concern articulated by the noble Lord, Lord Byron, in his amendments. Principally, we have now excluded costs from the definition of compensation payment in the 1989 Act. We were concerned about the scope for manipulation but we have listened to the convincing arguments put forward and we are now satisfied that any scope for manipulation is slight.
As I said, we have accepted that the scope for manipulation is slight, but nevertheless we feel that it would be prudent to provide for some means to check for signs of exaggeration in the figures for an individual settlement. The additional power we are seeking is a safeguard and will enable the department to obtain a breakdown if there is some uncertainty. This is simply an information gathering provision and I am sure that the House will agree that this is reasonable.
Finally, I should like to make some reference to another issue raised by the noble Lord, Lord Byron, in our discussion. He expressed some concern that the definition of compensation payment encompasses payments for property damage; for instance, payment for the vehicle damage where a driver is injured in a motor accident. For the record, I have to say that it was never the department's intention to draw such 294 payments into the definition of compensation payment. Our legal advice on this issue is that the definition does not encompass payments for property damage. For this outcome there would have to be some explicit reference to their inclusion in the legislation and there is none. I hope that the House will accept my assurance that any fears in that respect are unfounded.
Moved, That the House do not insist on their Amendment No. 7 to which the Commons have disagreed for the reason numbered 7A.—(Lord Henley.)

§ Baroness Turner of Camden
My Lords, I am sad to learn that the other place regarded this matter as one of financial privilege and did not agree to accept your Lordships' amendment to delete Clause 7 from the Bill. Your Lordships will perhaps recall that in the Social Security Act 1989 there is a provision under which all the social security benefits paid to the victim of an accident at work who succeeds in securing compensation at common law are clawed back out of the compensation payment.
At the time the Bill was being discussed a number of noble Lords on all sides of the House objected to the provision in principle. At a late stage in the Bill's progress we tabled an amendment which, unfortunately, came on late at night and was unsuccessful. When I looked at the Social Security Bill now before the House it seemed that the Government, emboldened by their success in that area previously, had decided to extend the same principle to compensation payments paid by the MIB.
Your Lordships may perhaps be aware that the MIB operates a private compensation scheme. Its intention is to compensate individuals who sustain personal injury in road accidents when the person responsible for the injury cannot be claimed against because there is no insurance cover. An obvious example is when one is injured by a hit-and-run driver. There is no one against whom a common law claim can be pursued in the courts. The MIB established the fund many years ago. It pays relatively modest amounts to compensate individuals who cannot secure compensation for their injuries in the courts.
When I looked at the Bill I saw that unless we managed to exclude Clause 7 from the Bill, the Government intended that all social security benefits would be clawed back out of MIB compensation payments. I made some inquiries, and I understand that the MIB approached the Government with a suggestion that its private scheme should be exempt in the same way as the Criminal Injuries Compensation Board scheme is exempt. The MIB failed to convince the Government that that was a reasonable course to adopt. The result was Clause 7.
When the Bill was before your Lordships' House we succeeded, on a Division, in deleting the clause. Although of course I welcome what has been done as a result of the intervention of the noble Lord, Lord Byron, in respect of costs, nevertheless someone who has been injured by a hit-and-run driver and who has secured an amount from the MIB scheme can have all 295 the social security benefits clawed back out of the compensation payment except any sum for costs. That means that any element involved for pain and suffering could be totally absorbed if the individual injured as a result of the accident was away from work for any length of time and had to have social security benefits to support himself.
It is a regrettable clause. I am sorry that the Government saw fit to proceed with it, although I accept that there has been some amelioration as a result of the intervention of the Law Society and the noble Lord, Lord Byron. I welcome that amelioration. However, I cannot but say that the idea is not good and that I regret that the Commons saw fit to plead financial privilege to overturn your Lordships' amendment.

§ Earl Russell
My Lords, on behalf of the Liberal Democrat Benches, I express agreement with what the noble Baroness, Lady Turner of Camden, has said. We believed that the proposals were wrong in principle, misjudged in practice, probably unworkable in execution and wide of their purpose in so far as they failed to distinguish between ordinary damages and damages for pain and suffering.
Having said that, I much regret the fact that the proposals have returned, I must also say that I am delighted by the success of the noble Lord, Lord Byron, and would like to thank the Government for conceding the point about costs. It is one for which I can recall arguing during the passage of the 1989 Bill. It is better late than never. To ensure that I understood my noble kinsman correctly, I should like to ask whether that point bears on the provisions of the 1989 Act equally with the provisions of the 1990 Bill. If so, I am glad.

§ Lord Henley
My Lords, I find it extraordinary that the noble Baroness should be saying at this stage that she would have preferred Schedule 1 to be removed. I understand that the noble Baroness and my noble kinsman do not like Section 22—as I understand it now is—of the Social Security Act 1989. Schedule 1 does no more than make a few wholly beneficial amendments to that section. If the noble Baroness believed that by removing Schedule 1 she was also removing Section 22 I am afraid that she was mistaken.
All I can say is that I welcome the praise of the noble Baroness and my noble kinsman for the fact that we have made further concessions on the schedule. I welcome their praise for the noble Lord, Lord Byron. My only regret is that the noble Baroness thought it necessary to strike out the schedule and so prevent the noble Lord, Lord Byron, arguing the case in Committee, which would have been more appropriate than a meeting with myself, along with officials from the Law Society, in order to reach an agreement.

§ Baroness Turner of Camden
My Lords, before the Minister sits down, he has not answered my point about the MIB compensation scheme which was the 296 reason why I sought to delete Clause 7 from the Bill. The clause happened to have the schedule attached to it.

§ Lord Henley
My Lords, yes, it happened to have the schedule attached to it. The noble Baroness will bear in mind the fact that the schedule is some four pages long. Only the first 10 or so lines of the schedule cover the MIB. It might have been better had the noble Baroness suggested that that part of the schedule be deleted. Nevertheless, I understand her concern over the MIB. As she is aware, it pays compensation to the victims of uninsured and untraced drivers. Legal advice is that the untraced drivers' agreement is not covered by the definition, as the noble Baroness said, for compensation under Section 22 of the 1989 Act. All we were doing in paragraph 1 of Schedule 1 was make clear that all payments from the Bill are covered by the 1989 Act.