HL Deb 21 January 1997 vol 577 cc628-43

7.44 p.m.

Lord Mackay of Ardbrecknish

My Lords, I have it on command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Social Security (Recovery of Benefits) Bill, has consented to place her prerogative and interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.

I beg to move that this Bill be now read a third time.

Moved, That the Bill be now read a third time.—(Lord Mackay of Ardbrecknish.)

On Question, Bill read a third time.

Clause 8 [Reduction of compensation payment]:

Lord McCarthy moved Amendment No. 1: Page 5, line 25, at end insert—

("() Where the total amount of recoverable benefit shown on the certificate exceeds a limit prescribed by regulations, a person who makes an offer of a compensation payment (whether by payment into court or otherwise) shall state whether that compensation payment has been calculated in accordance with this section and, if so, the amount allowed in the offer for each head of compensation listed in column 1 of Schedule 2 and the amount of each recoverable benefit which has been deducted from each of those heads of compensation.").

The noble Lord said: My Lords, in moving Amendment No. 1 standing in my name and that of the noble Baroness, Lady Hollis, I wish to speak also to Amendment No. 2 in the name of the noble Earl, Lord Russell. As anyone who has attended these debates will know, since the beginning of the consideration of the Bill in this House—at Second Reading, in Committee and on Report—we have sought to advance the cause of the amendment that I now move. It is substantially the same as the amendment which will subsequently be proposed by the noble Earl, Lord Russell, except that we have modified our amendment because we refer to the situation where recoverable benefit exceeds a certain sum, as specified in the amendment. That sum will be specified by regulation and therefore it can be specified by the Government. Consequently, any argument they may have had about the bureaucracy involved in dealing with small claims falls as the matter can be regulated by the Government.

We have referred to our central issue many times; namely, that the terms of the compensation should be available to the victim in the form of an offer which contains not merely the gross sum but also a specification of the elements listed in column 1 of Schedule 2. Further, there should be specified the sums liable for recovery under these heads. In other words what we want, and what we have talked about, is full disclosure by law at the onset of the negotiations. As I said, we hope that the modification we propose tonight will persuade the Minister how moderate and reasonable we are in that we refer only to the situation where recoverable benefit exceeds a certain sum which can be specified by regulation.

We have said many times why we want this measure but it is worth explaining it yet again. There are three reasons. First, this kind of formulation in law for full disclosure is justified in terms of equity and natural justice. The victim is entitled to know everything that is known to the compensator. The victim is entitled to have what has been called the cards on the table. The victim should not be asked to settle in ignorance and subsequently have to complain that he settled in ignorance. In equity and in natural justice the victim is entitled to full disclosure.

Secondly, the people who advise us have stressed that only in that way can we avoid the possibility of what I suppose one must call skulduggery; namely, the fear that without this knowledge the compensator may be tempted to exploit his position and that he may allow full recoupment against a global offer when the law clearly implies that that should not take place. To avoid that possibility there must be full disclosure.

Thirdly, as we have said all along in sharp contrast to what the Minister has said, we believe that this measure will facilitate a quick out-of-court settlement. We believe that the ordinary person will want to know all the facts—what they are entitled to and what will be snatched back by the Government. We have heard many analogies made. The noble Earl, Lord Russell, referred to a lecture. When one buys a house or deals with the Inland Revenue one wants to know the facts and the details, although one never gets them. One wants to have all the facts that are available to the other party made available to oneself. If one has that information, one must make the best of it.

What have the Government said in answer to what seems to us a reasonable, sensible plea? What has been said by their representatives, the representatives of the insurance industry? Three types of reply have been advanced. If I may be allowed to distort the analogy of the touchstone, we have had the reply protective, the reply superior and the reply realistic. The reply protective says that we are playing the solicitor's game. It was, I believe, the noble Lord, Lord Kimball, who said that we were opening a can of worms; that all we will do is to delay the settlement and "work up" the clients; and that the poor client, the poor victim, will go further into benefit and therefore into debt while his or her solicitor plays the game and opens the can of worms.

The Earl of Clanwilliam

My Lords, if the noble Lord will allow me to intervene, in order to protect the good name of the noble Lord, Lord Kimball, my speech was referred to in Hansard under the name of the noble Lord, Lord Kimball. It was not the noble Lord, Lord Kimball, who said those words.

Lord McCarthy

My Lords, if I am not wrong, but Hansard is, I apologise on behalf of Hansard. That was the argument raised. Whoever's idea it was in the first instance, we cannot understand it. We cannot square the assertion with the victim's constant desire for the quantum. We are told that the victim wants the quantum. If that is all he or she cares about, he will see through the solicitor opening the can of worms. He will say, "Don't keep mucking about with the can of worms. I want the quantum." The picture of the victim painted by the noble Earl does not square with the picture of the naive victim playing the solicitor's game. We cannot understand that argument in the overwhelming majority of cases.

Having been given all that information—it will not be extensive; there are only a few heads in the schedule—a client may be led by the nose by the solicitor into wanting the information and holding up the process. But if that is what he wants, he is entitled to act in that way. If the client is obstinate, as the noble Earl views it, the only way to settle the matter is to give him the information. Let him have the quantum.

When we stress this point in debate the Minister falls back on the reply superior. The reply superior is often accompanied by a nod, a wink and the tapping of the nose. We are told that these obstinate people could find out the information anyway. If they read the rules, or had good solicitors who read the rules and regulations, they could work out for themselves what deductions there would be in the broad quantum. If I have it right, and Hansard has not let me down, that is what I believe the noble Lord, Lord Mackay, said at col. 992 in Committee.

We were told subsequently that one can ask the CRU on the telephone and it will give all kinds of details which it would not normally make available. We were told that one can negotiate for a net amount. One can have an understanding that if the amount has to be adjusted subsequently that will be all right. We were told that in all sorts of ways one could get round the issue by operation of the old boy net, by nodding, winking and tapping one's nose, and that therefore the provision is not necessary.

I find that argument even less impressive because the information so obtained is less than 100 per cent, reliable. The information depends on good will, upon whom one finds on the phone, and how he or she feels that day. It depends upon one's opponents telling one something and the good will of third parties. We do not believe that that is sufficient. We want full disclosure; we want it by law; we want it by right. I do not find such an argument conclusive.

If we press the argument, the Minister and his allies fall back on what I call the reply realistic. We are told that there may be something in what we say but that we are just creating a bureaucratic maze; that in the real world the Government know, their friends in the insurance industry having told them, that third parties come to these agreements, and have done so by the thousand, based upon ignorance; that people like ignorance and are used to ignorance; that they really do not want to know; and that if we give them this information we shall only make trouble because they will insist on their day in court and that they are better off ignorant.

The answer is that the Government cannot conceivably know that. That is the system we have at present; there is no other system. The poor plaintiff, the poor victim, has to proceed by ignorance. We do not know what they would do if they were offered the option of knowledge. Knowledge may be power. That may be why it is not so popular. But that is why I beg to move the amendment.

Earl Russell

My Lords, I am happy to confirm the recollection of the noble Earl, Lord Clanwilliam. I am happy to see in the Chamber not only the noble Earl but also the noble Viscount, Lord Chelmsford. That is what is called belt and braces—otherwise known as insurance.

In speaking to Amendment No. 2, I am extremely happy to support Amendment No. 1 in the name of the noble Lord, Lord McCarthy and the noble Baroness, Lady Hollis of Heigham. Ministers are familiar—some would say over familiar—with the concept of the wrecking amendment. As I see it, this is a saving amendment. I have said from Second Reading onwards that I strongly support the principle of the Bill and want to see it working. It is my opinion, and my judgment as far as I can form it, that without the amendment the Bill simply cannot operate. I argue here simply in terms of practicalities and of the real world.

The amendment deals only with out-of-court settlements. When people obtain an out-of-court settlement, they should know under which heads they receive the damages. They should know under which heads they are able to recoup. Unless they know that, they simply cannot know how much they are receiving. It is like getting paid a sum and not knowing whether it is gross or net. It is a material point.

The Minister seems to think that it is possible to exclude the effect of recoupment from the operation of settlements. When we considered the Bill on Report, he said: The effect of either of the amendments would be to allow benefit recovery to affect the settlement process to an unacceptable degree".—[Official Report, 14/1/97; col. 134.] I simply do not understand the Minister's position. I do not understand how he imagines that a change of this magnitude can come into operation without affecting the progress of settlements any more than I understand how he thinks that it cannot affect the progress of the Bill if we debate it in the dinner hour rather than at three o'clock in the afternoon. If one changes the circumstances one changes what happens.

It is not in issue—I hope that the Minister will not detain us arguing the point—that we want settlements to take place out of court wherever possible. It is not in issue that we do not want cases to drag on, building up a greater amount of benefit to be recouped. That is common ground between all parties. The point at issue is which way this desirable effect is to be obtained. But arguments about which way are not always without heat. As anyone knows who has seen a married couple arguing over a map in a car, that sort of argument can become very heated indeed. However, I hope that this one will not.

The Minister attempted to argue that the difficulty arises entirely because we are listening to different sets of advisers. It is true; we are. My advisers are telling me what I thought before they advised me—what indeed I have thought ever since we went through this business in 1989.1 believe I am the only surviving veteran of the battles on the 1989 Bill. That said, it ought to be possible for advisers on both sides to reach an "out-of-court" settlement in Parliament as it is in the law. So I hope that this will not be the end of dialogue.

The question is: how do we set about it? The case that is argued by the Association of British Insurers, and by the Minister, is that if a breakdown of heads is needed in regard to a damages settlement, that is just one more matter about which the parties may argue. So far as it goes, that point is true: it is one more matter about which the parties may need to argue, and may therefore take a little time. It seems sensible to concede that at the outset. However, let us consider the alternative; namely, that the claimant simply does not know what he will receive unless he goes to court and has the whole thing out in public.

In those circumstances, I simply cannot see that it is in the interest of the claimant, or that of his solicitor, to settle the case at all. It takes two to settle, as Ministers in both Houses learn every day. If it is never in the interest of the claimant to settle, I do not see how the insurer can get a quick settlement.

If there are to be quick settlements, then the Minister's case must be one of two: either the claimants will settle against their own interest, or the superior power will in practice prevail. I find the one unimaginable and the other unacceptable. I am rather interested to know which of those the Minister means.

If the ABI loses this argument, it is not very much more work to disclose the figure, which must form part of its own calculations; it cannot make the calculations without it. So disclosure will not be particularly difficult. The claimant may object, but if there is a desire to settle, as I believe there often is, it should not be beyond the wit of man to find in the lawyers' equivalent of the Prince's Chamber some way of reaching agreement.

This is the point at which there is a tendency to say that "it is very difficult". It is an old argument. In a lighter moment over Christmas I happened to read some remarkable things that have been said in this House and elsewhere. Some included the great difficulties foreseen in this Chamber in the 1920s in relation to the introduction of a scheme of compulsory motor insurance. The late Lord Ullswater, who I understand was the great grandfather of the present Viscount, said: I can understand a proposal that no motor should be insured against third party risk. That, I think, is an arguable case, because then every person driving would take special care not to inflict damage to life or limb … but I can also understand the frame of mind of a man who … says, 'Well, I am insured against all risks; it does not matter,' and he will go ahead for all he is worth and as likely as not will cause an accident". At the end of that series of debates the Minister commented: To carry out a general scheme of insurance would involve great difficulties. I do not believe it will be possible to come to an agreement with the insurance companies". That Minister overrated the difficulties. I believe that the present Minister does the same.

8 p.m.

Viscount Chelmsford

My Lords, I am not sure whether I am regarded as the belt or the braces. However, I do not think that the entire insurance industry (all two of us!) is particularly arguing for the insurance industry. In terms of the various points made by the noble Lord, Lord McCarthy, I should like to try a fourth and, I hope, factual reply. The amendments proposed are damaging for all parties, certainly in terms of time, whatever that is worth. I am grateful to the noble Earl, Lord Russell, for agreeing that point.

It seems quite clear that the one area of compensation which is not ring-fenced, and against which the Government can recover benefits, is loss of earnings. That must be agreed all round. Even this morning I received a copy of the TUC's booklet, Robbing the Victims—no excuse for delay. The answer is exactly the same; namely, that the Bill will mean, special damages (awarded to injury victims for loss, such as loss of income or the costs of future care)". So we now know that clawback can be operated against loss of earnings. Loss of earnings is finite. At the time a claim is agreed, the actual loss of earnings that has been incurred will be known. It is finite; there is no problem with it. In terms of what is being said on the other side of the House, it is a head of damages and the finite amount is known. If the amount that has been paid out in benefits to the claimant is below that—and, after all, the amount paid out is known—that is the end of the matter. Everybody knows exactly where they stand. If the amount is above it—there may perhaps be some part of the total claim that includes a potential future loss of earnings after the date of settlement of a claim—then it seems very clear that Clause 6(1) of the Bill is invoked and the compensator pays the excess.

My representation is that the insurance industry has given in all round and has agreed all these points. If the compensator pays the excess, there is no need to identify the other heads of claim. The only reason why it seems to me to make sense for all parties not to spend time on it is precisely that it does waste time. Time is money, and lawyers will receive more money.

The Earl of Clanwilliam

My Lords, I hope that your Lordships will forgive me. I must catch a train at half past eight as I have an important engagement in the country tomorrow morning and this is my last opportunity to get there. My point is simply that the solicitor is the person involved in this activity who knows exactly what is going on and can explain quite clearly to the claimant exactly which item represents what. If the solicitor cannot do that, it will certainly be extremely difficult for anyone else to do so.

Earl Russell

My Lords, before the noble Earl sits down, will he agree that some solicitors are more solicitous than others?

The Earl of Clanwilliam

My Lords, indeed. With that, I hope that the House will give me leave to withdraw.

Lord Mackay of Ardbrecknish

My Lords, we have returned to a topic that we discussed at length both in Committee and on Report. I am afraid that, as I indicated towards the end of the Report stage, there seems to be a fundamental disagreement between the Government and noble Lords opposite on this matter, although, I am happy to say, not on the rest of the Bill.

The disagreement may in part stem from a muddying of two distinct issues. The first is whether offers of compensation need to be broken down into their constituent parts. The second is whether offers of compensation will be made gross or net of benefit recovery under the reformed scheme.

Some noble Lords seem to be under a misapprehension that the former is necessary because, as they believe, offers of compensation will be made gross. Indeed, I thought the noble Lord, Lord McCarthy, went even further in his remarks. He seemed to think that it would require "nods and winks" to find out what the recoverable benefits were. I cannot understand that at all. The victim receives a copy of the certificate of total benefits. That seems to have little to do with the statement of reduction. Clause 4 makes matters perfectly clear in relation to the certificate of recoverable benefits. I hope that that misunderstanding has been laid to rest.

The noble Earl suggested today, and previously, that until a person knows what sum he or she is being offered, and what heads it comes under, the calculation as to how much will be received simply cannot be made. I believe that was the substance of his remarks. However, that is not the case if the sum you are offered is already net of compensation recovery and the offer made to you is the amount of money you will receive. That is what the organisation representing those who will make the offer, the Association of British Insurers, assures us will be the case. That point has been made three times now by my noble friend Lord Chelmsford and was made again this evening.

Noble Lords opposite seem to be sceptical about that; but they have not explained what the advantages would be to insurers of making a gross offer of compensation and refusing to explain its value to the victim. It has been suggested that victims will refuse to settle on the basis of a gross offer whose value is unknown to them. Quite so. It would indeed be foolish to accept an offer whose value was unclear. There is no suggestion that victims could be forced to accept an offer where the benefit recovery position was unknown. It will usually be known because of the certificate which will have been asked for and copied. If that has not happened, it would be unwise of the victim to accept a gross settlement; he will look for a net one. I believe that is common sense.

I think it is unlikely that under the reformed scheme insurers will wish to delay settlements. They will have the responsibility to repay benefits and the benefit bill will continue to accumulate up to the point of settlement; the clock will keep on ticking. Why would they bother to make an offer which was not clear and which therefore prevented assessment of its net value? Why should they attempt to make the whole thing a bit of a mystery? The insurer will be equally keen to know the cost of the offer to himself when he makes it. He cannot do that without identifying the amount he will have to pay the victim in addition to the amount he will have to repay to the compensation recovery unit. I cannot for the life of me understand what advantage there would be to the insurers in making an offer where the total bill was unclear. That would seem a very imprudent way for an insurer to conduct himself.

If there is a misunderstanding here, it may well surround the question of gross or net. As I have said, the evidence we have and the experience of how this works—and logic tells me how it will work—show that the insurers will offer net. They will know what the recoverable benefits are and what the total cost will be to them and will say to whoever it is, "We are prepared to offer £X thousand to you in your pocket". If they say "£X thousand" and leave it a mystery as to whether that is in his pocket or whether recoverable benefit has to be taken off, I would have thought that that would delay settlement. It is unrealistic to think that the matter will proceed in that way. I think it is net and clear and that that will expedite settlement in the interests of everybody.

The noble Lord, Lord McCarthy, emphasised again that: It is not right … if one of the parties to a dispute … has more access to information … than the other party". I think I probably agree with him. I cannot understand, in that case, how he thinks it fair for insurers to be required to give the victims full information about the way in which they have calculated an offer but not the other way round when it comes to the way in which the victim has calculated what he believes the offer ought to be. That sounds very much like one party having more and fuller information than the other. Both sides have full knowledge of the benefits bill (from the certificate of total benefits) and of the offer that is on the table. I have suggested that both sides will clearly understand whether it is net or gross. What each side does not know is the calculation that has been made to arrive at that. But, as I have made clear in earlier debates on this issue, I do not believe that settlement will be dependent on this information any more than it is now.

The noble Lord, Lord McCarthy, suggested that it was, not right that the victim should not have access to the information if they want it and that, victims' solicitors need to know the breakdown so that they can advise their clients what to do". I would have thought that people were just interested in the total amount of money that they were going to get and not so much in how it was broken down. However, that is the advice which the noble Lord has received from an organisation representing victims' solicitors, and I understand that. If that is the case, perhaps he could ask how it is that they manage to advise their clients in cases where no benefit is involved. There is no requirement in such cases—

8.15 p.m.

Lord McCarthy

My Lords, the noble Lord is putting words into my mouth. I am answering his case. He is the one who said—and if we had Hansard here we could show it—over and over again that all people want is the quantum. That is his argument, not my argument.

Lord Mackay of Ardbrecknish

My Lords, I am just reinforcing that argument. I think that people want to know what they will receive net, and that is what I think will happen. Frankly, I do not understand the noble Lord's intervention at all. He seems to be agreeing with me.

Earl Russell

My Lords, it would materially assist the House if the Minister could explain how the victims will know how much they will receive when they do not know into what heads it is broken down.

Lord Mackay of Ardbrecknish

My Lords, they know how much they will receive because they will be offered it: they will be offered £X thousand and, when the solicitor says, "Does that include the recovery of benefit?", the compensator will say, "No, it does not; I will deal with the recovery of benefit myself; I will pick that up. Your client will get £X thousand". Perhaps I am just too stupid to understand this argument, but it seems to me a perfectly understandable position.

Earl Russell

My Lords, I understand that the Minister believes that settlements will work this way. Can he tell us why he believes it?

Lord Mackay of Ardbrecknish

My Lords, I believe it because that is the way many of them have worked to date. That is the advice that we are given by the Association of British Insurers, who operate this system, and that is how they see the system operating currently, where 90 per cent, of the claims are settled out of court. My noble and learned friend the Lord Chancellor has underlined that point. That is the evidence on which I base my view. It is also a common sense point of view. That is actually what somebody will be interested in.

I was raising the question of those cases in which no benefit is involved. It seems to me that there is no requirement in the kinds of cases we are talking about for the insurer to break down the offer he has made. I think the Opposition accept that the usual practice at present is to make an offer of a global sum by way of settlement of the claim. How do solicitors tell whether or not these claims are fair and reasonable? The solicitor in such a case will know little, if anything, about the calculation which underlies the offer made by the compensator. Yet the noble Lord has been told that this information is vital for a solicitor to advise a client as to whether to accept an offer of compensation. Frankly, I do not believe that at all. If that is the case, the implication is that, once a solicitor is presented with a claim where benefits are an additional factor, his knowledge, experience and judgment will desert him and the claim will have to be stalled. That cannot be right. The victim's advisers will make their own estimate of the value of the claim and assess any offer in the light of that estimate in the normal way.

It has been suggested that it would be easier for the negotiating parties to agree on several figures making up a total offer of compensation than on a single figure. I have to say that that seems very unlikely. Even in the mildly adversarial climate—let alone a major adversarial climate—in which negotiations are conducted, that is more likely to lead to greater scope for argument, with cases progressing to court, and I do not think that anybody wants that.

Amendment No. 1 would limit the requirement to provide a statement of reduction in compensation to cases where recoverable benefits exceeded a limit to be prescribed by regulation. I am always flattered when I am encouraged to take regulation-making powers. This is an interesting variation on the Opposition's theme. It seems that they are offering us an implicit acknowledgment that statements of reduction would mean an onerous and bureaucratic task for the compensator and therefore they want it de minimis.

Of course, the amendment would still mean that a statement of reduction in compensation would be required in a high-value case. I am advised that high-value cases are the ones that tend to include a claim for compensation under a multiplicity of different heads. Unsurprisingly, they also tend to be fought the hardest and are the category of case most likely to end in a court hearing. If there were a requirement to spell out the heads of compensation in such cases, there would be even less chance of reaching an informal settlement. I am therefore unattracted by this aspect of Amendment No. 1.

Under the reformed benefit recovery scheme, the liability to repay benefits is separate and distinct from the liability to pay compensation. I have tried to make the distinction between net and gross and I will try this different way: separate and distinct. Although the compensator is required to apply for a certificate of recoverable benefits, he does not have to have received it before making a compensation payment. That frees the negotiating parties to agree an early settlement, without unnecessary interference from the department. Under the first amendment the compensator might discover, after offering or even paying an award, that the amount on the certificate of recoverable benefits exceeded the limit. He would then have to back-calculate, using the net amount he had paid to the victim and the amounts of various recoverable benefits, what compensation would have been payable under each head before reduction. He would have to do this despite the fact that the victim had already received compensation and irrespective of the fact that the gross figures could be calculated in several different ways. In short, the compensator would be obliged to pursue a pointless paper-chase and incur additional administrative expense to invent a breakdown by heads of damage which would be of no interest to the victim, who had already settled.

In summary, a number of arguments have been made in support of these amendments. None has convinced me. None has convinced me that it would improve the Bill in any way.

In some ways there is a degree of opportunism from certain people who would like to go down that route, cloaked in an argument about legal principle. I think that the argument is essentially bogus. The Bill is not about making life easier for personal injury lawyers or indeed making it more lucrative. It is in fact about trying to ensure that as many settlements as possible are entered into out of court as quickly as possible for the benefit of the victim; and, overall, of course, that in the kind of cases that we are discussing the victim knows exactly, as will the compensator, what the recovery for benefit will be and what sum of money he will receive.

That seems to me to be a perfectly sensible way to think that the legislation will work. I hope, if the noble Earl and the noble Lord, Lord McCarthy, put their amendments to your Lordships, that my noble friends will support me in the Lobby.

Lord McCarthy

My Lords, I thought that the Minister was giving me the reply bland; but towards the end, I thought that he was giving me the reply rude. I shall not go over the argument again. When the Bill goes to another place, it will read what we have said and will see what we have tried to suggest and the Minister will not accept. We are saying that there will be disputes. There will be disputes on the example taken by the noble Viscount, Lord Chelmsford, from the opposite Benches. There will be disputes about loss of earnings, the rate of pay and whether the pay increases should be admitted. There will be arguments about all aspects of pay and what should be allowed. There will be disputes about the other heads: care and mobility. Unless the victim has all the facts and has them as a legal entitlement, he cannot be certain that he is getting a fair crack of the whip.

The issue is how much of the settlement will be offset by the insurer's demands set against each head. The victim wants to know what they are. He wants to know, and has no way of knowing or of ensuring that they are fair, that there is not overload and that the insurer is not loading unreasonably the kind of excess that the compensator should pay and not the victim. There is no way that that can be done unless there is 100 per cent. disclosure. I give way to the noble Viscount.

Viscount Chelmsford

My Lords, the noble Lord is very kind. It should not be forgotten that the insurance industry has already agreed to a whole host of provisions in this Bill which—it depends whose estimate is taken—will cost them between £50 million and £70 million a year. It has already been agreed that that will be absorbed by the insurance industry. I slightly object to the suggestion that the insurance industry is trying to load things against the claimant.

Lord McCarthy

My Lords, one cannot possibly know. I do not say that the noble Viscount's company would do this or that everybody or anybody would do it. I simply say that unless this amendment is carried—or an amendment like this amendment is carried in another place—justice, fairness and equity cannot be seen to be done. In that context, I am afraid that I shall have to divide the House.

8.23 p.m.

On Question, Whether the said amendment (No. 1) shall be agreed to?

Their Lordships divided: Contents, 30; Not-Contents, 101.

Division No. 3
CONTENTS
Addington, L. Harris of Greenwich, L.
Blease, L. Hollis of Heigham, B.
Calverley, L. Judd, L.
Carlisle, E. McCarthy, L.
Carmichael of Kelvingrove, L. McIntosh of Haringey, L.
Carter, L. Mar and Kellie, E.
Clancarty, E. Monkswell, L.
Cocks of Hartcliffe, L. Morris of Castle Monis, L. [Teller.]
Dean of Beswick, L.
Dean of Thornton-le-Fylde, B.
Desai, L. Nicol, B.
Dormand of Easington, L. Russell, E. [Teller.]
Dubs, L. Sefton of Garston, L.
Farrington of Ribbleton, B. Stoddart of Swindon, L.
Graham of Edmonton, L. Taylor of Blackburn, L.
Grantchester, L. Williams of Crosby, B.
NOT-CONTENTS
Addison, V. Hayhoe, L.
Allenby of Megiddo, V. Hemphill, L.
Anelay of St. Johns, B. Henley, L.
Annaly, L. HolmPatrick, L.
Balfour, E. Hooper, B.
Beloff, L. Howe, E.
Belstead, L. Inchcape, E.
Biddulph, L. Kimball, L.
Blaker, L. Leigh, L.
Blatch, B. Lindsay, E.
Boardman, L. Long, V.
Bowness, L. Lucas, L.
Brabazon of Tara, L. Lucas of Chilworth, L.
Bridgeman, V. Luke, L.
Brougham and Vaux, L. Lyell, L.
Burton L, McColl of Dulwich, L.
Byford B. Mackay of Ardbrecknish, L.
Cadman, L. Mackay of Drumadoon, L.
Caithness, E. Mackintosh of Halifax, V.
Carnegy of Lour, B. Marlesford, L.
Carnock, L. Miller of Hendon, B.
Chadlington, L. Monteagle of Brandon, L.
Chalker of Wallasey, B. Montrose, D.
Chelmsford, V. Mottistone, L.
Chesham, L. [Teller.] Nickson, L.
Northesk, E.
Courtown, E. O'Cathain, B.
Craigmyle, L. Onslow, E
Cranborne, V. [Lord Privy Seal.] Oxfuird, V.
Cumberlege, B. Palmer, L.
Dacre of Glanton, L. Park of Monmouth, B.
De Ramsey, L. Pearson of Rannoch, L.
Dean of Harptree, L. Peel, E.
Demon of Wakefield, B. Rankeillour L
Downshire, M. Rennell, L.
Dundonald, E. Renton, L.
Ellenborough, L. Rotherwick, L.
Elliott of Morpeth, L. Seccombe, B.
Elton, L. Shaw of Northstead, L.
Fraser of Carmyllie, L. Skelmersdale, L.
Gage, V. Stanley of Alderley, L.
Gardner of Parkes, B. Stodart of Leaston, L.
Gisborough, L. Strathclyde, L. [Teller.]
Goschen, V. Thomas of Gwydir, L.
Greenway, L. Tollemache, L.
Grimston of Westbury, L. Torrington, V.
Hacking, L. Trumpington, B.
Haddington, E. Wilcox, B.
Hamilton of Dalzell, L. Willoughby de Broke, L.
Harlech, L. Wynford, L.
Harmsworth, L. Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

8.31 p.m.

[Amendment No. 2 not moved.]

An amendment (privilege) made.

Lord Mackay of Ardbrecknish

My Lords, I beg to move that the Bill do now pass.

Before we complete the passage of this Bill, I should like to place on record my gratitude for the valuable contributions made by your Lordships and for the support that this Bill has received. As I have already noted and as other noble Lords have said, it is refreshing to deal with a Bill where all sides of the House can achieve consensus in so many areas, despite the Division we have just had. Indeed, at the Second Reading, as your Lordships may recall, the noble Earl, Lord Russell, commented on the hat trick of welcome which the Bill received from all sides of the Chamber.

Of course, we have not managed to agree on every point. Matters have arisen on which we have strong differences of opinion. However, I do not believe that these differences ought to be allowed to obscure our agreement. I am particularly grateful for the contributions made by those who perhaps I may describe as the regulars on this Bill. The noble Baroness, Lady Hollis, agreed with me on more occasions than either of us probably thought was good for our reputations. The noble Baroness, Lady Turner, as always, brought to these matters her practical experience; and the noble Lord, Lord McCarthy, was characteristically assiduous and punchy. These amendments, I hope, have enabled us to clarify several important points. My noble friends Lord Chelmsford and Lord Clanwilliam made valuable interventions from the perspective of the insurance industry. I am grateful for their assistance, as it has been vital for us to appreciate what actually happens on the ground in what is a fairly specialist area.

Finally, in relation to the noble Earl, Lord Russell, once again I have been struck by his grasp of the detail of what is a highly technical, involved subject. I am grateful to him for the contribution he has made, and as usual he has kept me on my toes with regard to the regulation-making powers. I was not entirely sure whether his suggestion that my right honourable friend the Secretary of State was clothed in the robes of Cambyses, the King of Persia, was flattering or not, so I did some checking and I discovered that King Cambyses had what might be described as a pretty bad press—and deservedly so. Occasionally, we at social security feel that we get a bad press, but we do not deserve it. I have to say to the noble Earl that he is being very unkind to my right honourable friend. As far as the law is concerned, which really was his point, King Cambyses managed to get the judges to say that he could break the law of incest and marry his sister, so it was not quite the same as the point that the noble Earl was making.

Leaving that aside, I wish to thank those organisations and individuals who responded so positively to our consultation process. I pay particular tribute to the Law Society, the Association of British Insurers, the Clydeside Action on Asbestos and, of course, the Association of Personal Injury Lawyers, who have followed our deliberations with exemplary thoroughness.

Finally, I must not overlook the important part played by the TUC in seeking to find common ground between those consulted on the shape of the proposed scheme. As my noble friend Lord Chelmsford pointed out, all of us received a letter today urging us, if I may shorten what the letter said, to get on with the job here.

It is gratifying to be involved in a Bill which has received such a broad measure of support across the Floor of the House and outside. This is such a Bill. There are one or two areas where real disagreement remains. Those issues will have to be discussed again in the other place.

We are all agreed that this benefit recovery scheme should achieve two very valuable objectives. It will enable victims to retain their damages for pain and suffering; it will also protect the taxpayer from the phenomenon known as double compensation. As such, I am confident that the Bill will be widely welcomed and will prove to be very useful for all the parties concerned in what sometimes are very difficult and painful decisions. I commend the Bill to the House.

Moved, That the Bill do now pass.—(Lord Mackay of Ardbrecknish.)

Baroness Hollis of Heigham

My Lords, as the House will have noted, we went out on a high note, which was defeat, but if that has added to the good humour of the Minister on which we have come to rely, then it has its positive virtues.

We are delighted to join with the Minister in sending the Bill on its way to the Commons. It is a good Bill. It has been improved at the edges by amendments from all round the House and clarified by the Minister's unfailing assiduous attention to the questions put to him on amendments at other points in the Bill. It means, as the Minister said, that rightly and belatedly payments to victims for compensation for their injury, pain, distress and additional costs will now be ring-fenced from the recovery of benefits. Justice will be done, and that is highly desirable.

Like others, I wish to thank in particular my own noble friends, the noble Lord, Lord McCarthy, for his wit and style and effectiveness, my noble friend Baroness Turner for her expertise, on which we all rely. I should also like to thank our advisers, in particular Mr. Dismore, from the Association of Personal Injury Lawyers, and the TUC. As the Minister has said, we wish this Bill all speed in the Commons.

Earl Russell

My Lords, I really must reassure the Minister and make my apologies to the Secretary of State for careless use of language. It was not the Secretary of State I was comparing to Cambyses, the King of Persia, it was his clause. I am free to reproach a clause within the limits of free speech in Parliament as much as I like.

I agree of course with all the praise of this Bill that has been uttered. I wish it well. I hope it passes speedily through another place and reaches the statute book before other events intervene. It does put right what I thought was a very bad mistake that was made on the very first Bill on which I ever spoke from the Front Bench. I said then that I thought this could not last. I am delighted to have been proved right.

I should like to join in the thanks to all the others who have been involved in the Bill, to the noble Viscount, Lord Chelmsford, and to the noble Earl, Lord Clanwilliam, who have brought a great deal of interest to our deliberations and given us a much more all-round discussion than we could have had otherwise. I thank the noble Lord, Lord McCarthy. We first spoke on the same side in a debate 42 years ago, I believe. We are still doing it, I am glad to say and I expect us to keep it up, for the time being anyway. I extend thanks to the noble Baroness, Lady Hollis of Heigham. She and I have been through many battles together. This is one more. We have done a few good things in this, although, as always, we can tell stories about the fish that got away.

I should like to thank our advisers from the Association of Personal Injury Lawyers, Andrew Dismore and Rachel Oliver, who have been extremely helpful, thorough and patient and able to explain very technical matters in very clear language. But most of all I should like to thank the Minister for his exemplary patience, endurance, and wit and for his ability to come back on anything. He is known to certain people on his own Back Benches, so good is his defence, after the memorable Australian stonewaller, "Slasher Mackay". I was talking recently to my dentist. I discovered that he used to play grade cricket in Sydney. He used to bowl at Slasher Mackay. I asked him what was the way to get Slasher Mackay out. My dentist replied, after some thought, "hand grenades!".

I have no remedy so drastic available to me so the Minister survives yet another Division. If I have sharpened his wits, he has sharpened mine. I have thought of yet more ways of placing spin, but always his bat seems to be there. I shall keep at it. I have enjoyed our exchanges and I look forward to the next one.

On Question, Bill passed, and sent to the Commons.