Lords Sitting of 27 March 2003

Preamble
The House met at eleven of the clock: The PRINCIPAL DEPUTY CHAIRMAN OF COMMITTEES on the Woolsack.
Prayers—Read by the Lord Bishop of Manchester.

Courts Bill [H.L.]
The Parliamentary Secretary, Lord Chancellor's Department (Baroness Scotland of Asthal): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Baroness Scotland of Asthal.)
On Question, Motion agreed to.
House in Committee accordingly.
[The PRINCIPAL DEPUTY CHAIRMAN OF COMMITTEES (Lord Grenfell) in the Chair.]
Clause 87 [Fees]:
Lord Hunt of Wirral Lord Hunt of Wirral moved Amendment No. 132A:
Page 41, line 30, at end insert—
"but should only seek to recover the recurrent running costs of the courts"
The noble Lord said: We now resume the debate which finished on the previous occasion with the success of Amendment No. 132 on civil court fees. In many ways, as the Minister is aware, we on the Opposition Benches are seeking to assist the Government to resist a Treasury-imposed directive, which would lead to virtually all the costs of civil courts being raised through the level of court fees.
Not that I am ever allowed to disclose any private discussion, but I am aware that there is considerable unrest at all levels of civil justice about this policy. In particular, on the last occasion that the Committee debated the Courts Bill, I quoted the Civil Justice Council, chaired by the Master of the Rolls, which had called on the Government to abandon the policy of raising virtually the full cost of civil courts through fees.
However, as the Minister will be aware, since that date and since the passing of the amendment, the Government have decided to unveil court fee increases. I must not show too many of my grey hairs, but I can recall the court fee being £10 for the writ. I remember it rising to £50 and then to £100. I see from the Law Society Gazette of 20th March that, as from 3rd April, if anyone wishes to commence proceedings in the High Court, the proposed increases will mean that the fee will be £500. The Government intend that the court fee for a claim of more than £100,000 within the High Court jurisdiction—say, by someone with a disability who has been injured in an accident—will now be £700. That will be the cost of simply starting the process. One hopes that under the reforms of the Lord Chief Justice, the noble and learned Lord, Lord Woolf, there will be the
914
normal pre-action protocols. But if the proposals go through, the cost of issuing the writ will now be £700, and if the claim happens to be above £150,000, it will be £800.
I ask the Government to reconsider. There is no doubt that, as the Civil Justice Council points out, this will lead to a denial of access to justice. I hope that that will no longer be the case following the passing of the amendment. In these amendments—in particular, Amendment No. 132A but also in Amendments Nos. 132B and 132C—we give the Government a menu of options. Indeed, we are from the Opposition and we are here to help the Government. They can choose any one of these three amendments.
The first—Amendment No. 132A—would exclude the recovery of costs other than recurrent running costs. It is a very sensible amendment proposed by a number of outside bodies. Amendment No. 132B would seek to exclude from this new power for the Lord Chancellor to set fees the recovery of judicial salaries and the cost of accommodation. We are aware that problems have been raised by the Royal Courts of Justice, and those have to be dealt with. I hope that the Government will be able to engage in the widest possible consultation and a proper and open debate about the issue of the Royal Courts of Justice and about whether a level of 100 per cent recovery is appropriate and defensible. If it is not, what should the percentage of recovery be, and is it a percentage that will change over time?
The final amendment—Amendment No. 132C— would lay down that:
"The Lord Chancellor may not under this section seek to recover judicial salaries".
I hope that this will be the most acceptable of the amendments. The provision of judges is a social function. It should not be borne only by those who choose to commence proceedings and are required to pay court fees.
I hope that the Government will consider having a meeting with the Civil Justice Council. I understand that there has been no meeting on this matter, but the Minister will be aware that the council issued a very clear report on it seeking a reversal of the policy. The Civil Justice Council, chaired by the Master of the Rolls, is an important body on which sit leaders of civil justice in all its forms. I believe that they deserve at least a meeting to debate and discuss this policy. In the mean time, I beg to move.
Lord Thomas of Gresford: We on these Benches support the amendments for the reasons very cogently put forward by the noble Lord, Lord Hunt of Wirral. The Minister may recall that at our last Committee meeting I raised the question of whether the fees would be set at a level such that those who could pay would be subsidising those who could not. Following that, she wrote to me on that topic. As I understand it, the Government are saying that that is not the principle upon which the fees will be apportioned. I should be

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grateful if the noble Baroness could repeat that assurance this morning in open court, as it were, before the Members of the Committee.
Baroness Scotland of Asthal: I intend to deal with all three amendments in responding to the noble Lord, Lord Hunt. The effect of these amendments, none of which are consequential on each other, would make it a statutory requirement that the Lord Chancellor should have regard when prescribing fees to the need: first, to recover only the recurring running costs of the courts, which is Amendment No. 132A; secondly, to exclude judicial salaries and accommodation costs, which is Amendment No. 132B; and, thirdly, as in Amendment No. 132C, to exclude judicial salaries alone. I thank the noble Lord, Lord Hunt, for his attempt to assist the Government in this regard, but I shall decline his invitation.
A statutory provision that excludes judicial salaries and accommodation costs from recurrent running costs would be an undesirable fetter on the Lord Chancellor's powers in exercising his ministerial responsibility to set fees; it would understate the true cost of the service; and it would require a significant proportion of business-related cases being subsidised by the taxpayer.
Subject to subsidies to protect access to justice, the Government's policy is to recover through fees the cost of civil court services, which includes judicial salaries and accommodation costs. That approach is based on the general principle that it is reasonable to expect that those parties who can pay should meet the cost of that part of the civil justice system they are using in order to resolve their dispute. The policy of recovering most of the costs of the courts through fees ensures the best targeting of scarce public resources. These are public expenditure decisions for the Government.
First I shall deal with specific points raised by the noble Lord, Lord Hunt. The Committee will remember that accommodation costs were first included in costs recovery in 1982. In 1992 the noble and learned Lord, Lord Mackay of Clashfern, the then Lord Chancellor— whom I see is sitting in his place—agreed it was anomalous that judicial salaries should not be included. The introduction of accruals accounting across government has brought in capital charges for property which reflect the true cost of services. This principle and approach is now in its 11th year, so it has been established for some time.
The civil courts are funded appropriately. The Government showed their commitment to ensuring that citizens can access and enforce their legal rights or have their obligations determined by an independent tribunal by enshrining the European Convention on Human Rights in the domestic Human Rights Act.
Last year—2001–02—the Government funded civil and criminal legal aid in the sum of £1,717 million. The total cost of running the criminal and civil courts was approximately £1.1 billion. In fairness to the taxpayer, there is no reason why court users who can pay should not pay for the cost of the civil courts service which
916
they are using. We are not talking of those who cannot pay, or, as the noble Lord suggested, the disabled, who may very well have the advantage of legal aid. The noble Lord will know that legally-aided applicants do not pay fees; they are paid by the Legal Aid Fund.
I am happy to repeat what I said in my letter to the noble Lord, Lord Thomas of Gresford. We do not recover "full" cost as the policy of protecting access to justice also applies. The Government funds those receiving exemptions and remissions and the family proceedings subsidy and not other fee-paying litigants. The Government's policy is normally to recover the full cost of government services but Ministers can agree exceptions, as for the civil courts. Recovering the full or partial cost of services ensures the best targeting of scarce resources. So the noble Lord is absolutely right to say that that is the Government's position. I am very happy to reiterate that for the purposes of the debate.
The noble Lord, Lord Hunt, touched on the recent fee increase. The overall increase is under 12 per cent. It is the first increase since April 2000. Some fees have remained unchanged since 1999. Over the three-year to four-year period the annual increase is between 3 per cent to 4 per cent. Without increases a £30 million budget shortfall is projected for 2003–04.
These are important and difficult issues. We think that the Government have struck the proper balance in assisting those who cannot pay and in cushioning them, as I described when last we were in Committee. But those who have the means—and noble Lords will remember we touched on the work in the commercial Court where litigants have those means—should pay and pay at a proper rate. I invite the noble Lord to withdraw the amendment.
11.15 a.m.
Lord Hunt of Wirral: There are number of gaps in the response of the noble Baroness. First, her argument is that the provision would be an undesirable fetter. However, she has not yet given the Committee the benefit of her view, or that of the Government, on the passing of the last amendment which preserved the principle of access to justice. We seek to build on that principle.
The Minister's point about those who can afford to pay does not answer the point raised from our Benches and those of the Liberal Democrats. We are particularly concerned about people who are just above the threshold. Although she may say that it does not apply to legally aided applicants, she will be aware that the Government have virtually abolished civil legal aid. Most applicants must now enter a complicated mechanism called a conditional fee agreement on a no win, no fee basis. Those agreements were introduced without proper research, and the courts must now deal with the consequences.
My final point is that we are dealing with the law of diminishing returns. As fewer and fewer people pay court fees, the court fees rise. Although the noble Baroness seeks to persuade us that an increase of around 12 per cent is small, I do not believe that it is, particularly given some of the specific fees. There is a

917
problem now that fees are being set too high. With the deficit, there is underfunding. The Master of the Rolls recently pointed out that the IT system underpinning the civil justice reforms has not yet been implemented. The Minister should reconsider. She has not responded to my invitation to meet the Civil Justice Council. I hope that she will consider it.
In the mean time, I wish to press Amendment No. 132C, which would exclude judicial salaries, and to test the opinion of the Committee. Therefore, I beg leave to withdraw Amendment No. 132A.
Amendment, by leave, withdrawn.
[Amendment No. 132B not moved.]
Lord Hunt of Wirral Lord Hunt of Wirral moved Amendment No. 132C:
Page 42, line 10, at end insert—
"( ) The Lord Chancellor may not under this section seek to recover judicial salaries."
The noble Lord said: I beg to move.
11.22 a.m.
On Question, Whether the said amendment (No. 132C) shall be agreed to?
Their Lordships divided: Contents, 90; Not-Contents, 87.

Division No. 1

CONTENTS

Ackner, L.

Howarth of Breckland, B.

Alderdice, L.

Howe, E.

Anelay of St Johns, B.

Howe of Aberavon, L.

Arran, E.

Howe of Idlicote, B.

Ashdown of Norton-sub-

Howell of Guildford, L.

Hamdon, L.

Hunt of Wirral, L.

Astor of Hever, L.

Jenkin of Roding, L.

Avebury, L.

Jopling, L.

Baker of Dorking, L.

Laird, L.

Blatch, B.

Lang of Monkton, L.

Bowness, L.

Livsey of Talgarth, L.

Brooke of Suiton Mandeville, L.

Luke, L.

Buscombe, B.

Lyell, L.

Byford, B.

McNally, L.

Campbell of Alloway, L.

Maddock, B.

Carey of Clifton, L.

Marlesford, L,

Carlisle of Bucklow, L.

Marsh, L.

Cockfield, L.

Methuen, L.

Cope of Berkeley, L. [Teller]

Michie of Gallanach, B.

Crickhowell, L.

Miller of Chilthorne Domer, B.

Dahrendorf, L.

Miller of Hendon, B.

Dean of Harptree, L.

Monro of Langholm, L.

Denham, L.

Mowbray and Stourton, L.

Dholakia, L.

Moynihan, L.

Dixon-Smith, L.

Noakes, B.

Donaldson of Lymington, L.

Northover, B.

Dundee, E.

Norton of Louth, L.

Elis-Thomas, L.

Palmer, L.

Elliott of Morpeth, L.

Park of Monmouth, B.

Falkland, V.

Peel, E.

Finlay of Llandaff, B.

Perry of Walton, L.

Flather, B.

Pilkington of Oxenford, L.

Freeman, L.

Rawlings, B.

Gardner of Parkes, B.

Redesdale, L.

Geddes, L.

Rotherwick, L.

Goodhart, L.

Russell-Johnston, L.

Hodgson of Astley Abbotts, L.

Saltoun of Abernethy, Ly.

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Sandwich, E.

Tordoff, L.

Selsdon, L.

Vivian, L. [Teller]

Sharman, L.

Waddington, L.

Shaw of Northstead, L.

Wakeham, L.

Wallace of Saltaire, L.

Skelmersdale, L.

Weatherill, L.

Smith of Clifton, L.

Wilcox, B.

Strange, B.

Williams of Crosby, B.

Thomas of Gresford, L.

Williamson of Horton, L.

NOT-CONTENTS

Acton, L.

Healey, L.

Amos, B.

Hilton of Eggardon, B.

Andrews, B.

Hogg of Cumbernauld, L.

Archer of Sandwell, L.

Howells of St. Davids, B.

Bach, L.

Hoyle, L.

Barnett, L.

Irvine of Lairg, L. (Lord

Bassam of Brighton, L.

Chancellor)

Bhatia, L.

Jones, L.

Blackstone, B.

Judd, L.

Blood, B.

King of West Bromwich, L.

Boston of Faversham, L.

Lipsey, L.

Brooke of Alverthorpe, L.

Lofthouse of Pontefract, L.

Brookman, L.

McIntosh of Haringey, L.

Burlison, L.

[Teller]

Campbell-Savours, L.

MacKenzie of Culkein, L.

Carter, L.

Mackenzie of Framwellgate, L.

Christopher, L.

Masham of Ilton, B.

Clark of Windermere, L.

Merlyn-Rees, L.

Clarke of Hampstead, L.

Morgan, L.

Clinton-Davis, L.

Morris of Manchester. L.

Cohen of Pimlico, B.

Nicol, B.

Craig of Radley, L.

Orme, L.

Crawley, B.

Patel of Blackburn, L.

David, B.

Pendry, L.

Davies of Oldham, L.

Pitkeathley, B.

Dixon, L.

Ponsonby of Shulbrede, L.

Dubs, L.

Ramsay of Cartvale, B.

Evans of Parkside, L.

Scotland of Asthal, B.

Evans of Temple Guiting, L.

Sewel, L.

Falconer of Thoroton, L.

Sheldon, L.

Farrington of Ribbleton, B.

Sheppard of Liverpool, L.

Faulkner of Worcester, L.

Simon, V.

Fyfe of Fairfield, L.

Smith of Gilmorehill, B.

Gale, B.

Stone of Blackheath, L.

Gavron, L.

Strabolgi, L.

Gibson of Market Rasen, B.

Taylor of Blackburn, L.

Golding, B.

Temple-Morris, L.

Goldsmith, L.

Tomlinson, L.

Gordon of Strathblane, L.

Turner of Camden, B.

Gould of Potternewton, B.

Varley, L.

Grabiner, L.

Whitaker, B.

Grocott, L. [Teller]

Williams of Elvel, L.

Hardy of Wath, L.

Williams of Mostyn, L (Lord

Harrison, L.

Privy Seal)

Haskel, L.

Woolmer of Leeds, L.

Resolved in the affirmative, and amendment agreed to accordingly.
Clause 87, as amended, agreed to.
11.31 a.m.
Clause 88 [Award of costs against third parties]:
Lord Goodhart Lord Goodhart moved Amendment No. 133:
Page 42, line 17, after "of" insert "all or any part of the"
The noble Lord said: In moving Amendment No. 133, I shall, with the leave of the Committee, speak also to Amendment No. 136. My noble friend Lord Thomas of Gresford will speak to Amendment No. 138, which is also in the group.
Amendments Nos. 133 and 136 are probing amendments designed to clarify some of the terms of Clause 88. The clause inserts a new Section 19B of the Prosecution of Offences Act 1985, introducing, for the first time, provision for the award of costs against third parties in criminal proceedings. A third party costs order is defined as,
"an order as to the payment of costs incurred by a party to criminal proceedings by a person who is not a party to those proceedings".
I assume that a third party costs order can apply to part of the costs incurred by a party to the proceedings and not simply to the whole of the costs, and I have tabled an amendment that would clarify that. Although I have little doubt that that is what subsection (2) of the new section means, I would like it clarified.
Amendment No. 136 is designed to deal with a significant omission from new Section 19B. The new section says nothing about the nature of the proceedings by which a costs order may be made against a third party. It is obvious that justice requires that a third party to criminal proceedings—in other words, somebody who is outside the proceedings and is not a party himself—cannot be ordered to pay the costs of those proceedings, unless there has been a hearing at which he is entitled to be present and make the case as to why a third party costs order should not be imposed.
There is no provision in the new section that requires the regulations to be made by the Lord Chancellor to include any provision either for notifying the third party or, more importantly, giving the third party a right to a hearing at which objections can be made to an order being made against him for payment of costs. I beg to move.
Lord Hunt of Wirral: This is an important group of amendments, and I want not only to respond to the words of the noble Lord, Lord Goodhart, but to speak to Amendments Nos. 134 and 135 and support the points that the noble Lord just made.
The intention to introduce a new power for the magistrates' courts and Crown Courts was backed up by a statement made by the noble and learned Lord the Lord Chancellor that the power should be deployed against the media, as he described it. The proposal is of real concern to the Newspaper Society, particularly to the 1,300 regional and local newspapers—daily and weekly titles, paid-for and free—published by its members throughout the United Kingdom. The Committee will know that, as has been pointed out, such newspapers cover the day-to-day work of the criminal courts. I know that the concern that is being expressed is shared by the Society of Editors.
The principle, which everyone supports, is that justice must not only be done but be seen to be done. That requires that justice be administered in public, so that the process and the results are open to public scrutiny. It is important to aid public understanding of the way in which the criminal justice system operates.
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Often, it is left to the local and regional media to ensure that people are aware of how the criminal law operates.
As they stand, the provisions—namely, the wide-ranging and, to some extent, uncertain powers to make substantial costs orders against the media—will be a disincentive to the reporting of proceedings. Editors, newspapers and the media will face the risk of the award of costs of legal defence and the cost of premiums for insurance against wrongful attempts to impose such penalties. For smaller papers, comparatively small sums could exert a chilling effect on the reporting of court proceedings.
Amendments Nos. 134 and 135 would identify what "serious misconduct" is. As the Bill stands, that need not be contempt in any form, a breach of a court order or a reporting restriction or any other breach of criminal or civil law. It is wrong to introduce new controls over reporting in that way. At the moment, if there has been a mistake, the matter is dealt with under existing law, backed by powerful sanctions but with procedural and substantive legal safeguards for freedom of expression.
Like the noble Lord, Lord Goodhart, I am concerned that there will be a risk that orders for prohibitive costs will be made arbitrarily against third parties—in particular, newspapers—for conduct or publication that is not even unlawful. That could have a chilling effect on reporting and publication that would be detrimental to open justice and public scrutiny and to public understanding of the criminal justice system. I hope that the Minister will reconsider.
Lord Thomas of Gresford: I speak to Amendment No. 138 which, in my opinion, is one of the most important amendments in the Bill. If the Government want to do anything about cost and delay, they must tackle the scandalous situation which has arisen in the past two or three years in respect of the failure of the Prison Service and private security firms to deliver prisoners to court in time, and sometimes at all.
My recent experience covers the Wales and Chester circuit, the northern circuit, the Midlands circuit and the Central Criminal Court in London. Each circuit has the same problem. In the past, we attended court one hour before the hearing. If it was a 10.30 a.m. sitting, we would be there at 9.30 a.m. in order to see the client. Now, it is a complete waste of time to do that. I cannot recall a case recently which has started at the specific allocated time.
The various problems are these. First, there is an unwillingness between the Prison Service and private security firms to co-operate. Secondly, the private security firms, in particular, do not have enough personnel. Consequently, they traverse the countryside—outside London—carrying the prisoners to various courts, and are immune to any criticism made of them. Thirdly, on arrival at the court building, a period of time has to elapse while they arrange themselves and the practice has now developed—I understand as a result of insurance requirements—that no prisoner is taken to a conference

921
room unless handcuffed to a member of prison staff. That is the position within the secure area of the court to which prisoners are brought. All that takes time.
Another problem is that the interview rooms are not properly manned. It happens all the time in Birmingham where there are 12 or 13 interview rooms but only five are manned at any one time. The result is that queues of lawyers, counsel and solicitors stand outside hammering on the door, trying to use the intercom to talk to Prison Service personnel, to people who are completely indifferent to the problems that the lawyers are facing and to the problems that the court upstairs is facing. It results in total frustration.
I referred to Birmingham and Wolverhampton. I remember one day recently when 28 prisoners were brought in custody to the court. They all arrived late. Only three interview rooms existed and the queue of lawyers stretched from the lobby before the entrance to the secure area right across the main hall of the court. Everyone was standing around wasting time and wasting public money.
The judges have no means of doing anything about the situation. They have no coercive powers whatever. Some shrug their shoulders; others do what they can. I know of one judge, for example, who, whenever there is a delay in his court, writes a letter and keeps a copy. In a short period of time, he has acquired a thick file which he intends to send to the Lord Chancellor's Department when a particular private security firm is seeking to renew its contract. That is the only weapon that there is—namely, the contract.
The amendment proposes that the judge is given the power to make an inquiry at the time to establish whether he is being lied to as regards where the prisoner has been taken—that has happened in the past —and to establish the reasons for the delay. Subsequently, the judge could order costs against the Prison Service or the private security firm or wherever the fault may lie. That would instantly improve the situation.
At the moment, this country is spending millions of pounds in paying lawyers for hanging about unable to do their jobs. It is paying millions of pounds for wasted court time. It is an amazing sight to see a High Court judge sitting in his own court for a quarter of an hour because there is no person available to man the dock and therefore no prisoners can be brought in. That happened recently to me in an important Crown Court in the Midlands.
That issue must be tackled. It must be dealt with. The contract system simply is not working. I hope that I shall hear something from the Government which will address this particular problem. It is a scandal.
11.45 a m
Lord Goodhart: Before the Minister replies, the issue of the press, raised by the noble Lord, Lord Hunt of Wirral, is the subject of the single amendment in the next group. I did not speak to it as I asked for it to be
922
degrouped because it is sufficiently important to require its own group. Perhaps the Minister will bear that in mind when replying.
Lord Donaldson of Lymington: I speak to Amendments Nos. 134 and 135 which are perhaps related to Amendment No. 137A. I cannot see how the proposal would work if "wilful" were substituted for "serious". The number of cases in which the press "wilfully" misconducts itself can be counted on the fingers of one hand, if they exist at all. The press lack wilfulness because it is simply negligent. There is a combination of the reporter who misunderstands and the sub-editor who does not understand either, and so forth, which leads to serious misconduct and everyone throws their hands in the air and says, "Well, I'm terribly sorry. It shouldn't have happened and we shall try to ensure that it doesn't happen again".
The question of costs only arises in the Bill if there is not only misconduct, but serious misconduct. Therefore, I cannot understand what is wrong with that. Amendment No. 138 clearly deserves maximum support and I hope that the Minister will be able to say that this is something which will be tackled and will be tackled energetically. She obviously has instructions not only from the Lord Chancellor but also from the Treasury and this is wasting public money. Therefore, one might expect the Government to endorse it enthusiastically.
Baroness Scotland of Asthal: The noble Lord, Lord Hunt, made comments in relation to the chilling effect on local and regional newspapers. I believe that he described the arbitrary way in which costs may be awarded. That procedure will be applied by the courts exercising their judgment judicially. It would be fair to say that the courts have never in the past exercised that duty in an arbitrary way. Therefore, implicit in these provisions in the Bill is that they will continue to behave in the same proportionate way as they have historically.
Before I turn to the particular amendments, there is already an acknowledgement that there is a difference between regional and national newspapers. In contempt cases, the courts have accepted that the fact that a newspaper is regional and not national is a mitigating factor in deciding what the penalty should be. We believe that the same would apply to the new cost provision. I wanted to say that before turning to the amendments.
Amendment No. 133, tabled in the names of the noble Lords, Lord Goodhart, Lord Thomas of Gresford and Lord Kingsland, proposes that the court may order the third party to pay,
"all or any part of the",
relevant costs—in other words, to decide the proportion of costs that the third party should pay.
The intention in this clause is to shift the burden of costs to those who cause them to be incurred or wasted. We also intend that where costs are to be paid, it will be for the courts to decide, after considering all the relevant circumstances, whether it is appropriate

923
for the third party to pay all or only a proportion of the relevant costs. We believe that approach is proportionate and reasonable. I know that this is a probing amendment, so I wanted to say that clearly.
The new section that the clause adds will form part of a group of sections on costs in the Prosecution of Offences Act 1985. We believe that, as far as possible, the wording of the new clause should be consistent with that in other sections. Spelling out,
"all or any part of the costs",
would create a contrast between the new section and the existing Section 19(1) of the 1985 Act, which provides that,
"The Lord Chancellor may by regulations make provision empowering [the court] in any case where the court is satisfied that one party to criminal proceedings has incurred costs as a result of an unnecessary or improper act or omission by, or on behalf of, another party to the proceedings, to make an order as to the payment of those costs".
Including "all or any part" in one section but not another could form the basis of an argument that the section that did not include that phrase did not permit an order to be made as to part of the costs only.
In addition, the amendment is unnecessary. Our wording already allows the court to make an order for part or all of the costs. I hope that satisfies the noble Lord. I see him indicating that that is so.
Amendments Nos. 134 and 135, to which the noble Lord, Lord Hunt, spoke, would define the meaning of the impropriety that may cause costs to be wasted or incurred. I concur with the comments of the noble and learned Lord, Lord Donaldson, about that. Amendment No. 134 would refer only to "misconduct", rather than "serious misconduct". Amendment No. 135 would define the impropriety as "serious and wilful misconduct". We chose the term "serious misconduct" because we do not want to include all misconduct. We want to catch those whose improprieties are considered serious or grave, such as the juror who prefers to go to the races rather than attending court, or a newspaper that publishes a prejudicial article that causes a criminal trial to be adjourned or abandoned. There is no need to remind the Committee that the Sunday Mirror published an article that caused the first trial of Woodgate and others—more popularly known as the Leeds footballers case—to be abandoned, at considerable cost to the taxpayer.
We do not want to catch a juror who is late for court through his own fault, but only by quarter of an hour. His lateness is clearly misconduct of a sort, but it may not be considered serious and the resulting wasted costs may be inconsiderable. We believe that "serious" is necessary and removing it would widen the scope of the legislation beyond that which was intended.
We view the addition of "and wilful" also as limiting and unnecessary. An impropriety may be serious, but at the same time it may not be wilful. For example, to publish a newspaper article reckless of the potential impact on a trial should be capable of being caught by the clause, even though it may not have been done wilfully, in the sense that there was no wilful intent to disrupt the administration of justice. It is reasonable to
924
believe that a professional journalist or editor would understand the high degree of care that needs to be taken with articles about those involved in or related to current criminal proceedings. However, the same could not necessarily be said about the average man in the street who is not subject to any professional obligation and may be unaware that certain actions could have a detrimental effect on any proceedings. The court will be able to take account of these different considerations in determining whether, in the particular context, an impropriety should be treated as serious misconduct. "Wilful" could unduly restrict the court in cases of reckless acts or omissions where a third party costs order would be appropriate.
Under Amendment No. 136, when the court is considering making a costs order, the third party must be notified and given the opportunity of making representations before any such order is made. Of course we accept that the third party must have a right to a hearing, but we propose to provide for that in regulations and not in the Bill. On the notification of and representation for third parties, the Government intend to follow the provisions in existing regulations.
Lord Goodhart: My point was not that those issues should be included on the face of the Bill, but that the face of the Bill should spell them out as among the specific things that regulations should be required to provide for.
Baroness Scotland of Asthal: I understand what the noble Lord has in mind, but we still say that it would not be necessary. I am happy to say that we intend to include those issues in regulations. They will be similar to provisions in existing regulations that have been made relating to cases under Part 2 of the Prosecution of Offences Act 1985. The noble Lord will know that Regulations 3 and 3B of the Costs in Criminal Cases (General) Regulations 1986 provide that parties to proceedings who have acted improperly, and legal or other representatives who have acted negligently, may make representations to the court before any costs order is made against them. In those cases, it has been sufficient for the issue of representations to be dealt with in regulations and not in the Act. We propose the same here. I hope that the noble Lord will in due course be content with that.
Amendment No. 137 would limit the requirements to be satisfied before the court can consider a costs order by limiting the definition of serious misconduct to an "intentional or reckless act". It would limit the act to one that made a material contribution to the mischief and it would limit the mischief to delaying or causing the abandonment of a trial.
I have already said that we believe that it should be for the courts, after considering all the facts of each case, to determine which improprieties, including omissions as well as acts, constitute serious misconduct. Clause 88 allows the courts to do that.
The noble Lord, Lord Thomas of Gresford, spoke to Amendment No. 138. He rightly raised an issue that causes much frustration to the courts and contributes to the waste of court time and taxpayers' money. He

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gave us some graphic examples of the nature and extent of the problem and the level of frustration that it has caused to all those who have been subject to it.
However, we believe that the amendment, although absolutely pertinent, is unnecessary. Clause 88 already allows the court to deal with errant deliverers of prisoners. If costs are wasted because of late delivery, the court can look at the circumstances that caused the lateness. If it was the result of serious misconduct, the appropriate action can be taken—the court can make a third party costs order. Putting such detail on the face of the Bill can be unhelpful. It can encourage people to argue that the scope of the legislation has been unnecessarily limited, which will allow for other actions of serious misconduct to escape. I thank the noble Lord for raising this important issue, but we believe that the clause already enables the court to catch the situation that he described. The court will be able to assess whether there was a serious matter of misconduct with which it would be proper to deal. Now that the court has this sanction—these teeth— with which to bite such miscreants, we certainly hope that that will have a salutary effect and will cause people to behave in a more appropriate manner.
Has the noble Lord degrouped Amendment No. 143, because I believe that it was spoken to by the noble Lord, Lord Hunt of Wirral?
Lord Goodhart: It was Amendment No. 137A.
Baroness Scotland of Asthal: I am grateful to the noble Lord.
I turn finally to Amendment No. 143. The amendment proposes that any regulations made under proposed new Section 19B, which deals with the award of costs against third parties in criminal proceedings, should be made by way of the affirmative resolution procedure. When preparing the provision, we took the view that none of the usual reasons for having the affirmative resolution process applied in this case.
In its report on the Bill, the Select Committee on Delegated Powers and Regulatory Reform raised no objection. Noble Lords will know of the importance we have attached to the committee's report. I may say that that applies where the committee has made no recommendation as well as where it has.
Clause 88 inserts a new Section 19B in the Prosecution of Offences Act 1985 which is similar to other provisions on costs contained in Sections 19 and 19A. Indeed, Section 19 is cast as conferring a regulation-making power. Neither of those powers, nor the general regulation-making power in Part II of the 1985 Act, is subject to the affirmative resolution procedure. We see no reason why the regulations made under new Section 19B should require the affirmative resolution procedure when the existing provisions they will mirror have been subject to the negative resolution procedure.
We are satisfied that the regulations made under new Section 19B should be subject to the negative resolution procedure because the provisions which would be contained in those regulations are concerned
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with the detail of how the court's power to make third party costs orders will operate in practice: in other words, they will be primarily about procedural matters. For this reason, we do not believe that the affirmative resolution procedure is appropriate and I hope that the noble Lord will feel able to withdraw the amendment.
Noon.
Lord Goodhart: I am entirely satisfied with the Minister's response on Amendment No. 133. As regards Amendment No. 136, while I would have preferred to see something in the Bill that specifically required regulations to be made about hearings, I accept the Government's assurance that they will be included, if only because any attempt to make a costs order without a hearing against a third party would be a breach of the Human Rights Act 1998.
Perhaps I may ask my noble friend to comment briefly on his position on Amendment No. 138.
Lord Thomas of Gresford: I am delighted with the response made by the noble Baroness to Amendment No. 138 and I am pleased that the Government intend to cover this scandalous situation as I have described it. The words of William Blake come to mind:
"Bring me my bow of burning gold",
but I do not think that there are sufficient "arrows of desire" in the current phrasing. I should like to make the point very specific because the clause relates to making regulations. Given that, provision should be made in regulations dealing with the Prison Service and the private security firms.
I shall come back to this matter at a later stage, but for the moment I shall not pursue it.
Lord Goodhart: I beg leave to withdraw the amendment.
Amendment, by leave. withdrawn.
[Amendments Nos. 134 to 137 not moved.]
Lord Goodhart Lord Goodhart moved Amendment No. 137A:
Page 42, line 24, at end insert—
"( ) In deciding whether there has been serious misconduct, the court must have particular regard to the importance of the Convention right (as defined in the Human Rights Act 1998 (c. 42)) of freedom of expression."
The noble Lord said: The noble Lord, Lord Hunt of Wirral, spoke on the subject of this amendment during the previous debate. The Newspaper Society, as the representative of the provincial press, has spoken to both the noble Lord and myself on this matter.
The society objects to the press being subject to third party costs orders at all on the grounds that the existing penalties for any breach of reporting restrictions under the rules covering contempt of court are entirely adequate. I have to say that I felt unable to go as far as that, but press coverage of the criminal courts, particularly in local newspapers, as the noble Baroness said, is a matter of importance. There is a real

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risk, as was pointed out by the noble Lord, Lord Hunt, that the possibility of a third party costs order may act as a deterrent to the full and proper reporting of court cases.
When the court decides whether serious misconduct has taken place, it should take into account the important role of the press. Amendment No. 137A is therefore specifically targeted on the press, unlike the earlier amendments, Amendments Nos. 134 and 135, which are of general application and would apply to everyone.
Mistakes made by the press, even if they are mistakes that have serious consequences in terms of costs, should not necessarily be regarded as matters of serious misconduct. Of course the deliberate publication of matters known to be likely to lead to a mistrial is an entirely different matter, but this amendment calls upon the court to have particular regard to the importance of the right of freedom of expression. In doing so, the amendment is based on a similar clause that was added to the Human Rights Bill during the course of its passage through Parliament in 1998.
We believe that, for the same reasons it was felt justified to include the clause in the Human Rights Bill, a clause of this kind would be justified for inclusion in the Courts Bill. I beg to move.
Lord Hunt of Wirral: I agree.
Baroness Scotland of Asthal: I wish I could respond simply by saying that I disagree.
While I understand why the noble Lord seeks to press the amendment, we say that it is inappropriate for the following reason. We object because of the use of the word "particular". The noble Lord has stressed that he wishes the court to have particular regard to the importance of the convention right to freedom of expression when deciding whether to order costs against a third party, but we say clearly that it is our belief that the court, when reaching its decision, should have regard to the totality of the Human Rights Act 1998. No one part of that legislation should have any lesser or greater importance than another. It is the balance struck in the Act that is so important.
As the noble Lord knows, the criminal courts are in any event required to act in a way that is compatible with Article 10 covering freedom of expression, and that will apply when they are considering whether to use the power conferred by this clause. However, we do not think it appropriate for the criminal courts in this context to be required to have particular regard to that article. Section 12 is concerned primarily with the balance between the freedom of expression of rights and the right to respect for private life. We are concerned here solely with apportioning the costs incurred or wasted as a result of serious misconduct by a third party. It is not appropriate to give special weight to freedom of expression in the costs context.
But we believe that the courts have demonstrated, through the way in which they have applied the law in this area, that they will be proportionate, reasonable
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and proper in the discharge of their duty. There is nothing that the courts have done to date that has caused me to fear that when looking at this legislation they will not properly take into consideration the necessary balance between these issues and discharge their duty with the usual honour and integrity which we expect of our judges.
Lord Goodhart: I am grateful to the noble Baroness for her reply, which was much as I expected. This is a point of some importance. We shall look carefully at what she has said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 138 not moved.]
Clause 88 agreed to.
Clauses 89 to 91 agreed to.
Schedule 5 agreed to.
Clause 92 [Periodical payments]:
Lord Hunt of Wirral Lord Hunt of Wirral moved Amendment No. 138A:
Page 44, line 24, leave out "pecuniary"
The noble Lord said: We now move to consider Clauses 92 and 93 headed "Damages", which provide for periodical payments to be ordered by the court. This gives us an opportunity to review the position of structured settlements. The amendment asks a question about the extent to which periodical payments will be dealing with future loss, whether pecuniary or not.
It is some time since the first UK structured settlement involving periodical payments with model documentation was put in place. In July 1989, the first structured settlement attracted considerable publicity. In the following year more cases were settled on that basis. Since then the flow of cases has increased. In June 1991 a UK Law Commission inquiry was appointed to look at structured settlements which reported in 1994. It concluded the report Structured Settlements and Interim and Provisional Damages in the following terms:
"Structured settlements are a useful alternative form of arranging an award of damages which should remain available to allow plaintiffs [now claimants] a choice as to how to plan their future".
In May 1995, legislation based on the commission's recommendations was enacted. We have seen the development since then. I refer particularly to the Damages Act 1996, which allowed for structured settlements to be made by consent.
In a case before our Judicial Committee in 1998, the noble and learned Lord, Lord Steyn, made the following comments:
"The present power to order periodic payments is a dead letter. The solution is relatively straightforward. The court ought to be given the power of its own motion to make an award for periodic payments rather than a lump sum in appropriate cases. Such power is perfectly consistent with the principle of full compensation for pecuniary loss. Except perhaps for"—
I greatly regret that he added these words—
"the distaste of personal injury lawyers for change to a familiar system, I can think of no substantial argument to the contrary. But the judges cannot make the change. Only Parliament can solve the problem".
That explains why we are here today discussing Clause 92 in particular.
We have had extensive consultation. I pay tribute to the noble and learned Lord the Lord Chancellor. In March 2000 he published a consultation paper entitled Damages: the Discount Rate and Alternatives to Lump Sum Payments. He concluded that further discussion was necessary. In March last year he published a further consultation paper entitled Damages for Future Loss: Giving the Courts the Power to Order Periodical Payments for Future Loss and Care Costs in Personal Injury Cases. The post-consultation report was published in November last year. I applaud the speed with which the Government have responded in putting forward Clause 92 as far as it allows for periodical payments.
The issue has been looked at the by the Clinical Disputes Forum, which published a paper on the subject in August 2000 entitled Lump Sum Damages and Periodical Payments. The working party of the Master of the Rolls published a report last August on structured settlements.
I support what is clearly a more appropriate way of compensating claimants because it will ensure that they have the money to which they are entitled and for as long as it is needed without the anxiety of the award running out if they live longer than expected. But a number of reports have concluded that there must be an element of finality. We shall come to specific amendments dealing with the proposals on variation in a moment.
The extensive consultation that has taken place has disclosed that periodical payments are to be welcomed provided that they introduce a degree of finality. There are views in favour of periodical payments from a range of organisations such as the National Health Service Litigation Authority, the Medical Defence Union, the Medical Protection Society, the Association of British Insurers, the International Underwriting Association and by claimants' organisations. Generally, these are to be welcomed. But all of them are unanimous in their view that they have serious concern about a proposal for those payments to be varied at some unspecified stage in the future.
The variation clauses could cause much more litigation, endless uncertainty, constant scrutiny for claimants and financial instability for those who seek to compensate. I hope that the Minister will accept that there could be a fatal flaw in the system. If periodical payments are introduced with a suspicion that at some stage in the future they will be changed or varied, then I do not believe that the general welcome for periodical payments will continue.
12.15 p.m.
Lord Clinton-Davis: I am grateful to the noble Lord for giving way. If there is a fundamental change of circumstances, it is impossible not to vary the situation. Obviously, the noble Lord is right in that
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there should be no repeated surveillance of such a situation. Would the noble Lord like to comment on that?
Lord Hunt of Wirral: The noble Lord is right in that provisions presently exist for what are called provisional damages. Where there is a suspicion that at some stage there will be a serious deterioration in the claimant's condition, then it is perfectly possible for the damages to be put on hold, so to speak, under the system of provisional damages. That could be incorporated under the existing legislation in a structured settlement.
The noble Lord has given me an opportunity to emphasise the point. There may be a suspicion that there will be no finality. The Master of the Rolls' working party demonstrated the attraction of finality introduced by lump sum payments. But, as I read the proposals, there is presently nothing on the face of the Bill to meet the point that the move to the alternative system of periodical payments might produce continuing uncertainty. There is a genuine worry on the part of those who face claims—particularly in the National Health Service but also, generally speaking, insurers and re-insurers and those acting on behalf of claimants—that periodical payments in the form of structured settlements will not succeed because there is no finality and it is impossible for a file ever to be closed.
The Minister may seek to reassure us on that point. I very much hope that she will, as she now seeks to explain exactly what, in form of damages, the periodical payments will cover. I hope that she will not mind my having widened the debate to indicate the general concern that exists over what could be the fatal flaw of variability. I beg to move.
Baroness Scotland of Asthal: I thank the noble Lord for his generous compliments in relation to the way in which this work has been undertaken, and I return them. The work on periodical payments has been successful only, as a number of Members of the Committee have been kind enough to indicate, because of the work done by all those who have participated in this area, including the noble Lord. So this is a joint venture to that extent.
I do not mind at all the fact that the noble Lord has broadened the issue slightly. It may be helpful, therefore, if I set out in broad terms how we view periodical payments, because there has been some confusion. I hope that when we come to deal with the basis on which these could be reviewed I shall be able to make sufficiently clear and helpful comments to reassure the noble Lord that his anxieties as regards periodical payments and their take-up and application are not well founded.
These proposals aim to promote the widespread use of periodical payments as a means of paying compensation for future financial loss and care costs in personal injury cases. At Second Reading, the noble Lord, Lord Goodhart, the noble and learned Lord, Lord Donaldson, and the noble Lord, Lord Hunt, all

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welcomed the powers to order periodical payments. I was pleased, as I have said, that the noble Lord was able to reiterate that today.
At present, a court can order periodical payments only where both parties give their consent. Otherwise, it will order a lump sum. We believe that the existing system of compensation for future losses by way of lump sums is unsatisfactory. It is based on predictions about the future life expectancy of a claimant which are inevitably uncertain and almost always lead to over-compensation or under-compensation. That results in an injustice either to the claimant or to the defendant. If claimants are under-compensated because they live longer than expected, they may need to fall back on the state, causing an additional burden on the taxpayer. If claimants are over-compensated, they receive a windfall, the cost of which is ultimately borne by the taxpayer or through insurance premiums.
In contrast, periodical payments will help to ensure that people receive the compensation to which they are entitled for as long as it is needed. This will give greater security to claimants, who will be able to plan for the future without the anxiety or the awards running out if they live longer than expected. Periodical payments also transfer investment responsibility from claimants to defendants, who are better able to bear it.
We believe that periodical payments can also be valuable in assisting the rehabilitation process. Claimants will receive regular payments which are more accurately assessed to meet their on-going needs rather than face the difficulties of managing a substantial one-off lump sum. That will enable claimants to return to a normal life by allowing them to manage their everyday affairs with a regular stream of income and help them to look to the future and focus on the possibility of rehabilitation. In addition, the absence of the need for complex and often adversarial discussions about life expectancy should lead to the quicker resolution of cases and encourage early and effective rehabilitation.
Periodical payments will provide benefits to defendants by allowing awards to be managed more cost-effectively. They will be cash-flow savings for the NHS and defendants' insurers will have the greater choice over how payments are funded. We do not wish, by way of review, to jeopardise any of that security. The Government believe that the benefit of periodical payments will accrue from the greater use of these payments. A power for the courts to order periodical payments is needed to realise those benefits.
Under the current system, as the noble Lord, Lord Hunt, has indicated, where the consent of those parties to a structured settlement is required, this option remains little used, and lump sums remain the norm—often to the disadvantage of claimants, defendants and the taxpayer.
We recognise that periodical payments will not always be the most appropriate method of payment, and that lump sums will continue to be preferable in some circumstances. Our proposals will not prevent the court making a lump sum order where it considers
932
that to be the best option for the claimant, and it is our intention that the Civil Procedure Rules, supported by practice directions, will provide guidance to assist the court in making an order that best meets the needs of the claimant.
Of course I understand the import of this amendment. But it would change the definition of the type of damages for which the court will be able to impose periodical payments from,
"damages for future pecuniary loss in respect of personal injury",
to damages for "future loss" in respect of personal injuries. As we have indicated in our consultation paper, it is our intention that the power to impose periodical payments should be available in respect of future loss of earnings capacity, future care costs and similar expenses. The use of the term "future pecuniary loss" is intended to cover those areas.
The term is used elsewhere, in the Damages Act 1996 and in other legislation relating to damages, and is issued here for reasons of consistency. The new power will not apply to damages for past loss or to damages for non-pecuniary loss such as pain and suffering. It will apply to "future pecuniary" loss. I hope that we shall be able to ensure that the meaning of the term is explained in the Explanatory Notes to the Bill on that basis. On the basis of my remarks, I invite the noble Lord to withdraw the amendment. I hope that the clarity of that statement has satisfied him.
Lord Hunt of Wirral: I am grateful to the Minister, not only for responding to the amendment, which was essentially probing, but also for giving a general outline of the way in which the Government are approaching the whole question of structured settlements. We shall need time to reflect on the Minister's response, and we shall, of course, return to the subject of variation in a later group of amendments.
My only additional point is that we must bear in mind the needs of people with disability which has been incurred as the result of an accident or trauma. There is a feeling on the part of some of those with disability that they have not been involved at the centre of this whole process relating to periodical payments. There is a real concern that periodical payments be some form of inhibitor as regards the emphasis on rehabilitation and getting people back to work.
Stephen Duckworth, who is a leading campaigner on disability matters, has made me aware that we need to consult people with disability in order to ensure that periodical payments will encourage them to become more independent and more amenable to rehabilitation interventions. There is the possibility—we shall return to the issue on variation—that the constant question mark over the level of payment may have a detrimental effect on the rehabilitation process. We need to focus on that aspect which the noble Baroness will have very much in mind. However, to give the necessary width to the debate, I mention it. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
12.30 p.m.
Lord Goodhart Lord Goodhart moved Amendment No. 139:
Page 44, line 28, at end insert—
"( ) Periodical payments shall be increased or decreased in accordance with the Retail Price Index."
The noble Lord said: I did not participate in the debate on the previous amendment but I strongly agree with the principle of periodical payments, moving from the existing structured settlement regime, which requires the consent of both parties if it can be done only by an out of court settlement subject to approval by the court, to a situation where the court has power to order periodical payments. While this is a step forward it will be essential to ensure that the real value of periodical payments is maintained. That is the purpose of the amendment.
Even at the Government's target figure of 2.5 per cent inflation, periodical payments with a fixed annual amount would steadily lose their real value over time. Ignoring the effect of compounding, a 2.5 per cent increase over a period of 10 years per annum would lead to a decline in real value of the periodical payment over those 10 years by 20 per cent. The figure is 20 per cent not 25 per cent: that is a matter for the mathematicians. If one takes into account the compounding of the interest—the 2.5 per cent per annum is measured not on what happened 10 years ago but with the previous year's figure—the problem becomes even more acute. The consequences would be not only serious but disastrous if inflation rates were over 20 per cent per annum as in the 1970s or early 1990s.
It is now practicable to ensure that the real value is maintained because the cost of an order for periodical payments can be funded through index-linked government securities. It is not practicable to link periodical payments to earnings. That is unfortunate. Because of the increase in real earnings, a person rendered unfit for work 40 years ago and in receipt of periodical payments fixed even in real terms at the 1963 figures would have a standard of living well below that of a healthy contemporary even if those periodical payments had been index linked. That seems to me an unavoidable problem. There is no realistic way in which an earnings-linked annuity could be funded. However, I believe that linkage to the retail prices index is not only practicable but plainly desirable and essential. I beg to move.
Lord Hunt of Wirral: It is an important amendment. It touches on the way in which periodical payments will be dealt with. I considered carefully this aspect when reading paragraph 35 of the Master of the Rolls' working party's report on structured settlements. Close matching regulations oblige, for instance, life offices to hold assets to match their liabilities. Close matching is a key issue when one considers the way in which any annuity payment will increase in value. That close matching was found in the Insurance Companies Act 1982 but is now regulated by the Financial Services and Markets Act 2000 with the detail to be found in the FSA Interim Prudential Source Book Pr Insurers, Volume 3 Guidance Notes, Section 4.4, linked contracts, paragraphs 2.1 to 2.15.
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There is no point in setting up a system for structured settlements when no available products will conform to the close matching regulations That is fundamental if we are to proceed with a general move towards the structured settlements which so many people would like to see.
Baroness Scotland of Asthal: I agree with the noble Lord, Lord Goodhart, and the noble Lord, Lord Hunt. It is important that the real value of periodical payments can be preserved over the whole period for which they are payable. The indexation of payments is already a matter for the court's discretion and the Bill does not affect that. At present it is common practice to link payments to the retail prices index. However, it would not be appropriate to prescribe this as a blanket index to which all payments must be linked. In some cases it may be appropriate to link different heads of damage to different indices. The court currently has that flexibility.
We believe that it is important to retain the current flexibility and for indexation to be left to the discretion of the court which can have proper regard to the individual circumstances of each case. I hope that that reassures noble Lords. We think that this ability of the court will address their concerns.
Lord Hunt of Wirral: Perhaps I may respond. Where the liability is to make index payments under art RPI structure, there is an available close-matching asset in index-linked government stocks. There is a general wish to see those made more widely available. However, if we were to move to another index—I agree with the noble Lord, Lord Goodhart—there will be no availability of any close-matching product which would enable the defendant, the defendant's insurer, or reinsurer, to make the necessary provision.
Lord Goodhart: I am not sure how the court's discretion now arises. It would arise only by virtue of the requirement that a court approve a structured settlement and that it will not do so unless the settlement makes some provision for indexation of the payments due under that settlement.
We have here a different situation. The court is making the order, not merely approving a settlement agreed between the parties. It is plainly desirable, therefore, that the court should be required to take steps to preserve the real value of the periodical payments. I should like to see a provision on the face of the Bill—perhaps not as absolute as my amendment—which states that the court shall be required to provide for the payments to be indexed unless it sees reason for them either not to be indexed or to be linked to some other index.
Baroness Scotland of Asthal: We should bear in mind how the courts currently approach the issue. When matters come before the court, all parties will have to direct their minds to the nature of the order that the court might make. The noble Lord will be familiar with the process. The court will make enquiries as to what the consequences are for various

935
suggestions that will be urged on it by various parties. That is the nature of the discussion that will be under review. It is part and parcel of the way in which courts have historically approached these issues that they wish to be assured that, if liability is established, the damages that flow from that, both general and specific, together with pecuniary loss, properly compensate the individual applicant for the injury suffered at the date of the incident and, thereafter, for the damages that flow therefrom. We are relying on the practical day-to-day way in which the court has dealt with that process.
Lord Goodhart: I still believe that it would be desirable and important to place something of this kind in the Bill, although perhaps not in these words. I shall consider some alternative possible wording. From my reading of proposed new Section 2(1)(a) and 2(1)(b) of the Damages Act 1996, it is not made expressly clear that the court even has the power to award periodical payments that are index-linked rather than fixed. I am strongly minded to bring back the issue on Report. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Goodhart Lord Goodhart moved Amendment No. 139ZA:
Page 44, line 28, at end insert—
"( ) In considering whether to order periodical payments under subsection (1), the court shall take into account the views of the claimant."
The noble Lord said: This amendment is entirely different in nature from the previous one. It arises from correspondence with the Association of Personal Injury Lawyers. The association pressed for an amendment that would provide that an order for periodical payments should need specifically the consent of the claimant or a McKenzie friend, when the claimant was represented by a McKenzie friend.
I saw problems with requiring consent in all cases, particularly in the case of a young person who was legally capable of taking a decision for himself but might take an unwise one. The prospect of a large lump sum may be tempting to a claimant who would be better off in the long run with a periodical payment. The claimant might also come under pressure from members of his or her family who expected to profit in some way from the lump sum.
Having said that, the court should undoubtedly have regard to the wishes of the claimant and should be required to find out what they are. I accept that in practice a court that acted reasonably would almost certainly do that. However, the requirement should be in the Bill. I do not suppose that the court would ignore the claimant's wishes, even without a statutory obligation, but if the requirement were in the Bill the court would have to find out the claimant's wishes. It would also mean that if the court did not act in accordance with those wishes, it would have to give
936
reasons for overriding them. It is desirable that it should do so. Therefore, there should be an obligation to have regard to the claimant's wishes. I beg to move.
Lord Clinton-Davis: I have a great deal of sympathy with the amendment, but there are difficulties with it, as the noble Lord, Lord Goodhart, said.
Normally, periodical payments should be a matter for the claimant, but that is not always possible, as the noble Lord said. However, the claimant's plans for the future should be taken into account. The Minister said that guidance would be available to the court, which is important, and I invite her to say something more about the availability of such guidance at this stage. That would be enormously helpful to the House in considering the Bill.
Lord Hunt of Wirral: I should like to support the noble Lord, Lord Clinton-Davis. I should not like a one-sided system to be set up, although I am aware of the views of the Association of Personal Injury Lawyers.
The association made it clear, as the noble Lord has just made clear, that we must have the guidance in place before we go further down this route. The association wrote:
"This lack of clear direction could have a negative impact on victims and we would strongly urge that guidance is in place prior to the courts using the powers".
My main point, however, is one that I mentioned before, which was made by Stephen Duckworth of Disability Matters and several other leading people, who speak in support of the need for rehabilitation. The International Underwriting Association and Association of British Insurers study on rehabilitation and the initiatives taken by periodicals such as Post magazine, urging forward the code on rehabilitation, make it clear that periodical payments must be in the interests of the person receiving compensation. The interests demand that there should be, when appropriate, an early and prompt return to work and/or return to normal life, when that is possible.
Will the Government have some more joined-up thinking about the need for rehabilitation at a much earlier stage, especially when the defendant is a Government department or the National Health Service, in some form or other, or the Medical Defence Union or Medical Protection Society? There is an urgent need to deal with the problem early in the interests of the claimant. Will the Minister comment on the need to ensure that the people who have suffered are at the centre of the discussion?
Baroness Finlay of Llandaff: I apologise for the fact that I have not been present at previous deliberations on the Bill, but I have been unable to attend. I should like to speak to Amendments Nos. 139A and 140A, which are in my name.
The Deputy Chairman of Committees (Viscount Allenby of Megiddo): We have not reached that group.
Baroness Finlay of Llandaff: Oh, I am sorry.
Baroness Scotland of Asthal: I empathise with many of the comments made by Members of the Committee.

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I shall reassure my noble friend Lord Clinton-Davis about our approach, and try to respond to the issues raised by the noble Lord, Lord Hunt of Wirral, after dealing specifically with the amendment.
We agree with the noble Lord, Lord Goodhart, that the views of the claimant in relation to periodical payments is the important issue. The Bill already provides for the rules of court to set out criteria that the court must take into account when considering whether to order periodical payments. As the noble Lord rightly said, it would be impractical and perhaps inappropriate to attempt to list in primary legislation all the factors that the court will need to consider. As we all know, this is a developing area of law and it is essential that there is flexibility to adjust the criteria in the light of experience. I respectfully suggest that that is best achieved through secondary legislation. We intend that the rules will assist the judiciary and parties in identifying factors that may be relevant in deciding whether periodical payments or a lump sum is appropriate. I reiterate that there will still be cases where periodical payments are not appropriate and do not meet the needs of the parties, particularly the claimant, and where the court will not so order.
We fully accept that the claimant's wishes are an important factor. I reassure the Committee that those wishes will undoubtedly be one of the factors that the court is required to consider. However, we do not believe that it would be appropriate to single out that factor in primary legislation as the amendment proposes. The court must be allowed to take into account all the individual circumstances of the case and weigh all the relevant factors against one another in making the order that it considers best meets the needs of the claimant. The weight to be given to the claimant's wishes, for example, might depend on the reasons for them and the quality of the advice on which they are based. I think that the noble Lord, Lord Goodhart, mentioned issues to do with pressure from family and whether they think a lump sum might be more advantageous to them. Those are all important issues for the court to weigh.
Does the claimant, for example, want a lump sum to spend on a holiday or to start a business? How strong is his or her business case? Has he or she been properly advised? I am sure that the court will be minded to take into account all those issues. Of course the defendant's wishes run through all of that. However, I think that it would be wrong to suggest, by placing it on the face of the Bill, that the claimant's wishes should outweigh all other factors. I therefore invite the noble Lord to withdraw the amendment.
The noble Lord, Lord Hunt, made an important point about rehabilitation. We, too, see rehabilitation as a very important issue. We hope that, by the introduction of periodical payments, it will be easier to settle cases earlier. We know from research that the earlier these issues are settled, the easier it is for the injured person to be rehabilitated. We hope that that is something that will inure to the benefit of the claimant. We have already said that the proposals offer advantages for the defendant. Rehabilitation, however, is a critical issue. I reassure the noble Lord that the importance of the rehabilitation
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issue—how we address it and how we encourage individuals to take advantage of the opportunities for rehabilitation—is very much on the agenda and part of the conversations that we are having with various government departments. I assure him that it is not an issue that this department or other departments will fail to address. We are addressing it with great energy.
Lord Goodhart: I am grateful to the noble Baroness for her helpful reply and her assurance that there will be guidance in regulations on the factors that have to be taken into account by the court in reaching its conclusion. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees: Before calling Amendment No. 139ZAA, I have to inform the Committee that if this amendment were to be agreed. I would not be able to call Amendments Nos. 1.39ZB and 139ZC.
Lord Hunt of Wirral Lord Hunt of Wirral moved Amendment No. 139ZAA:
Page 44, leave out lines 34 to 40.
The noble Lord said: The amendment would leave out Section 2 of the Damages Act 1996 so far as subsection (4) is concerned. Amendment No. 139A, which is within the group, would leave out lines 4 and 5 on page 45. That provision concerns,
"enabling a party to apply for a variation of provision included under paragraph (a) or (b).
Amendment No. 139B, which is also in this group, would leave out "(a) or", in line 5, so that one could apply only under paragraph (b). Amendment No. 147ZA would leave out the words "whether or not" from line 18 and insert "if". Amendment No. 140ZB would, at the end, insert "or". Amendment No. 140A, which is in the name of the noble Baroness, Lady Finlay of Llandaff, is also in the group I think that that covers all the amendments in the group. I thought that I should read them out so that everyone knows exactly where we are in the latest selection.
Amendment No. 139ZAA is really a probing amendment. I have to confess to the Minister that I really do not understand subsection (4), and I look forward to her explanation. On Amendment No. 139A, however, it should be possible to vary the way in which payments are made. We are dealing here with the mechanics of payment, not with variation—to which we shall return as a big subject for debate. There would be no concern if, for example, the claimant wanted quarterly payments rather than monthly ones. That should be allowed. The intention is clearly for the courts to control such variation. Again, I am giving the Minister the opportunity of responding on the point.
Amendment No. 139B offers for consideration whether the words "whether or not" should be replaced by "if". If the court does not specify the method of payment, I am not sure that the person who is obliged to make the payment should be fixed with a method and then be in breach of the order if he varies it as long as the payments are still made and secure. I hope that that

939
explains the reasoning behind the amendment. It may be advantageous if I now leave it to the Minister to explain. I beg to move.
Baroness Finlay of Llandaff: I apologise to the Committee for my earlier untimely intervention. Amendments Nos. 139A and 140A are in my name. However, I should prefer to speak to them in full later. The points have been more than adequately addressed by the noble Lord, Lord Hunt of Wirral.
Lord Bassam of Brighton: In order to assist the Committee, I think that it might be helpful if the noble Baroness spoke to the amendments now as they are in the group we are considering.
1.00 p.m.
Baroness Finlay of Llandaff: I thank the Minister for that guidance. All of my amendments relate to the proposals to introduce settlement reviews in clinical negligence cases. My concerns are on four levels: for patients themselves; about the complaints procedures which patients encounter in the NHS; for the healthcare professionals; and for the NHS itself.
When a clinical error has occurred, patients understandably and rightly feel deeply wronged. Redress is sought to cover expenses incurred in future care but also—and often much more powerfully—in an attempt to obtain justice for the tragedy that has happened. Of course no money can compensate for the phenomenal emotional and physical trauma that somebody experiences when an error has occurred.
After an error, the complaints procedure comes into play. Patients repeatedly report a block in the process. They feel that there is a brick wall when they desperately need information and an apology—but an apology is slow to come as healthcare professionals and trust management may fear that to apologise would be to admit liability. The new NHS complaints procedures have improved enormously in recent times and the open and speedy way in which issues are dealt with is long overdue.
Sometimes the trust or defence union will settle rapidly out of court to achieve closure for all concerned rather than fight a case, to avoid lengthy court procedures and the stress involved. However, if it is feared that such a settlement might be deemed an admission of guilt that can later be revisited to increase a settlement, the trend towards rapid resolution for closure will be reversed and trusts will try to avoid anything that might be construed as an admission of guilt through fear of later review.
The NHS apparently has a huge and rising bill for negligence payouts. In 2001–2002, the bill for all known and anticipated claims was £5.25 billion—a staggering increase of £850 million in the last year alone. Only five years ago, the total provision for clinical negligence was much lower, at £2.3 billion. National Audit Office accounts show that the NHS paid out £446 million to settle clinical negligence claims last year, which is £31 million more than the
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previous year. The introduction of settlement reviews can only increase that trend, unless the NHS reverses its current policy of rapid settlement.
I am grateful to the Lord Chancellor's office for corresponding with me earlier this year. Its letter outlines the intention of the Bill, which actually matches what currently happens. The medical defence unions currently fund long-term payments through buying an annuity. I understand that in practice, an annuity can be bought only from the National Farmers Union Mutual and that there is no choice in the market. The defence unions are not in a position to self fund. Their subscriptions are drawn principally from employees of the NHS, so review and variation would inevitably impact indirectly on NHS costs.
I now return to the people at the heart of this—patients and the healthcare profession. Make no mistake, when a doctor makes an error, it is devastating for that doctor. I have seen many professional colleagues feel destroyed by a complaint—even one with no grounds. I have seen colleagues haunted for life by an error. Of course the patient is more than haunted. He or she has to live day in, day out, with the outcome of an error or, worse, negligence. Patients are owed a duty of continuing care, which includes the duty to help them to rehabilitate and resume life as much as possible. The Minister and the noble Lord, Lord Hunt of Wirral, have stressed the importance of rehabilitation, so I shall refer briefly to evidence from rehabilitation programmes.
From 17 well-conducted studies in the literature on the impact of litigation on the rehabilitation process, there is consistent and powerful evidence that ongoing litigation and, independently to it, unemployment have an adverse effect on recovery. For patients to achieve closure on episodes seem crucial to their future quality of life. I am not saying that settlements should not occur. I certainly welcome the implication of the introduction of periodical settlements—but leaving settlements open to review may mean that patients cannot complete the grieving process that will and must occur. They cannot have closure.
The NHS might come to fear that admission of fault may leave the way open to future, unquantifiable review claims—making the early stages worse for patients. The NHS cannot afford the open-ended nature of such reviews. Most of all, the victims—the patients— will be unable to rehabilitate because any long-term improvement may work against a future claim review. Patients will be encouraged to be locked into to an acute psychological state and never achieve closure in their lifetime. It is well documented that the individual's psychological state has a huge impact on physical recovery. I beg to move.
Baroness Scotland of Asthal: I will take up the invitation to explain how the clauses work because I understand that they may have caused difficulties. The points that the noble Baroness makes so powerfully are important and I will respond to them fully when we reach the next group of amendments. I reassure her that a lot of work is continuing. The Chief Medical Officer, to name just one authority, is working hard on

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reviewing all aspects of clinical negligence, including the complaints procedure. We are hopeful that that work will chart a way through for us.
The proposed amendments would affect the way in which the security of periodical payments is protected. They would have unfortunate practical consequences for the ongoing security of periodical payments awards, so the Government are not able to accept them. None of the amendments is consequential on any other—except Amendment No. 140A, which is consequential on Amendment No. 139A.
It may be helpful if I explain the purpose of the provisions relating to security. New Section 2(3) requires the court to be satisfied before it makes a periodical payments order that the continuity of payments is reasonably secure. New Section 4 of the Damages Act 1996, inserted by Clause 93, ensures that the continuity of periodical payments is fully protected by the Financial Services Compensation Scheme, where the payments are self-funded by an insurer or funded by an annuity. Section 2(4)(b) provides that in those situations, the continuity of the payments is reasonably secure for the purposes of new Section 2(3). Similarly, Section 6 of the Damages Act 1996 and new Section 2(4)(a) guarantee the security of self-funded payments by public sector bodies made under a ministerial guarantee.
In making a periodical payments order, it is not intended that the court should specify how payments are to be funded in terms of the particular type of investment to be used, provided it is satisfied that the payment method is reasonably secure. That matter will be for the defendant or the insurer. It is right that, provided payments are reasonably secure, defendants and insurers should be able to choose the funding arrangements that suit them best.
However, in order to be satisfied of that, it is likely that in most cases the court will specify that payments must only be funded in ways provided for under new Section 2(4)—that is, those ways that attract statutory protection. Alternatively, the court may be asked to agree another method of funding that does not attract statutory guarantees. Therefore, new Section 2(5) enables a court order to include provision about how the payments are to be made and to require the person who is to make the payments to take specified action to secure their continuity. The government amendments that I shall move after the debate on these amendments will, I hope, clarify the section further.
It may sometimes be necessary or desirable for the insurer or defendant to change the method of funding the payments. This will not affect the amount of payments. To ensure that the protection afforded by the original court order is not lost as a result of any subsequent change in funding, new Section 2(7) provides that an alteration in the method of funding shall be treated as a breach of the order unless the new method falls within the protected categories of funding, or the court declares it is satisfied that the continuity of payment under the new method is reasonably secure.
The second possibility would arise in two situations: first, where the defendant wished to change from a protected method of payment to one that was not
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protected; secondly, where the defendant wished to change from one non-protected method of payment to another. New Section 2(5)(c) enables the court to allow a party to bring the matter back before the court in such situations so that it can consider the proposed new method of funding and approve it if appropriate. The amendments moved by the Opposition would harm the way these interlinking provisions operate.
Amendment No. 139ZAA seeks to remove new Section 2(4), which sets out the methods of payment that the court may consider to be reasonably secure for the purposes of new Section 2(3). As I have explained, the section is designed to enable the court to identify which payments attract statutory protection and therefore which it may automatically consider to be secure.
The amendment would require the court to declare itself satisfied by the security of the individual method of funding in every case, even where a method protected by statute was to be used. As a consequence, defendants and insurers would have to present to the court details of the specific investment or method of payment with which they intended to meet the order. This would reduce the flexibility for defendants and insurers to fund payments in the most cost-effective way, would increase court time and costs unnecessarily and might delay payment.
While I am aware of some concerns about the availability of insurance products to meet court ordered periodical payments, we do not consider it to be a significant issue. Defendants will be able to inform the court if the terms of an order would cause particular difficulties. However, as annuities are already used to provide structured settlements, we would be disappointed if the insurance industry did not seize the opportunity to meet an increased need for periodical payments. We should also not forget that not all periodical payments will be funded by insurance products; for example, as the noble Baroness, Lady Finlay, said, the National Health Service might fund payments directly as they arise, rather than purchasing an annuity from a life insurer.
As I have explained, the provisions in new Section 2(5) are intended to cover all the different situations where the court may need to include provision about the method of payment, and one element would not function properly in the absence of the others. Amendment No. 139A, which seeks to delete new Section 2(5)(c), would have the effect of preventing any application to change the method of payment being made. Amendment No. 140A is consequential and deletes the reference to new Section 2(5)(c) in new Section 2B(1). This reference is included in new Section 2B(1) in order to clarify that the Lord Chancellor's order-making power on variation of periodical payments does not extend to provisions relating to the parties' ability to apply for variation of the method by which the payments are funded.
I am going through the arguments slowly, because when practitioners and others come to look at the provisions I hope that my explanation will assist them to see how they interlink. Amendment No. 139B

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would restrict the circumstances in which an application to change the method of payment could be made. These amendments would prevent the provisions from functioning effectively to protect the ongoing security of payments. If I may respectfully say so, that would not be in the interests of either claimants or defendants.
The same is partly true for Amendment No. 140ZA, because it reduces the circumstances in which it would be necessary to obtain the court's approval to a change in the method of payment. The effect of substituting "if" for "whether or not" in new Section 2(7) would be to limit the orders covered by the provision. In those orders not covered it would then be possible for the defendant, without the court's approval, to change to a method of payment that attracted no statutory protection. That would create a potential loophole and might mean that certain claimants were not adequately protected.
Amendment No. 140ZB is a drafting point relating to the list of instances in new Section 2(7) in which an alteration of the method by which periodical payments are funded will not be treated as a breach of the order. The word "or" is implicit at the end of paragraph (a) and does not need to be inserted. The drafting here reflects the approach used elsewhere in the Bill; for example in Clause 30(1), Clause 36(4), Clause 49(3) and Clause 57(2).
I have dealt with the matter exhaustively but I hope that it is now clear.
1.15 p.m.
Lord Hunt of Wirral: It is indeed clear. Speaking on behalf of practitioners, I am sure that all those involved in implementing these provisions will print out the Minister's words and place them close to their hearts. I am grateful to her for her explanation. As she has indicated, these provisions deal with variation in the method of payment. I congratulate the noble Baroness, Lady Finlay of Llandaff, on her important points on variability. When we come to page 46 of the Bill and the amendments grouped with Amendment No. 140ZC, we will be returning to those points. I shall defer further comment from these Benches until then. In the mean time, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Scotland of Asthal Baroness Scotland of Asthal moved Amendment No. 139ZB:
Page 44, line 35, leave out "it is protected by"
The noble Baroness said: These amendments clarify the methods of payment to which I have just referred that are reasonably secure for the purposes of new Section 2(3), which requires the court to be satisfied before it makes a periodical payments order that the continuity of payments under the order is reasonably secure.
As I have explained, new Section 4 of the Damages Act 1996, inserted by Clause 93, ensures that the continuity of periodical payments is fully protected by the Financial Services Compensation Scheme where the payments are self-funded by an insurer or funded by an annuity. Section 6 of the Damages Act guarantees the security of self-funded payments by public sector bodies made under a ministerial guarantee. But Section 6 is not designed to guarantee payments made by government departments and is not suited to the National Health Service, which will be funding a substantial number of periodical payment orders, as it would appear to require an individual guarantee in each case. That did not matter when periodical payments had to be made by agreement. It would be clear to the claimant that the defendant department was good for the money, so the absence of a formal guarantee would be no bar to a settlement.
In future, however, a court ordering periodical payments will need to be satisfied as to their future security. That requirement will apply when periodical payments orders are made against government departments and health service bodies, in particular the National Health Service Litigation Authority. At present, such payments are usually self-funded, and we wish to ensure that that can remain the case under the new system. Self-funding the payments as they arise represents the best value for the public money concerned. Therefore Amendments Nos. 139ZB, 139ZC, 139ZD, 139ZE, 139ZF and 140ZBA will ensure that the continuity of payments made by government and health service bodies is reasonably secure for the purposes of new Section 2(3).
Amendments Nos. 140ZBB and 140ZBC enable the Lord Chancellor to specify in an order the bodies that will constitute "government and health service bodies" for the purposes of new Section 2(4) and (7) which deal with alterations to the method of payment. The amendment is framed in that way to provide clarity as to the bodies which are protected and to provide flexibility, for example, to alter the designated bodies should they change in name or status. I beg to move.
On Question, amendment agreed to.
Baroness Scotland of Asthal Baroness Scotland of Asthal moved Amendments Nos. 139ZC to 139ZF:
Page 44, line 36, at beginning insert "it is protected by"
Page 44, leave out line 37.
Page 44, line 38, at beginning insert "it is protected by"
Page 44, line 40, at end insert ", or

(c) the source of payment is a government or health service body."

On Question, amendments agreed to.
Baroness Scotland of Asthal Baroness Scotland of Asthal moved Amendment No. 139ZG:
Page 45, line I, leave out paragraphs (a) and (b) and insert—

"(a) requiring the party responsible for the payments to use a method (selected or to be selected by him) under which the continuity of payment is reasonably secure by virtue of subsection (4);

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(b) about how the payments are to be made, if not by a method under which the continuity of payment is reasonably secure by virtue of subsection (4);

(ba) requiring the party responsible for the payments to take specified action to secure continuity of payment, where continuity is not reasonably secure by virtue of subsection (4);"

The noble Baroness said: As I explained in speaking to previous amendments, the Government wish to give defendants and their insurers as much flexibility as possible in funding court-ordered periodical payments provided always that the claimant's interest in the ongoing security of the payments is protected. To ensure that the Bill achieves that, Amendments Nos. 139ZG and 1390 clarify the provisions relating to the method of funding payments. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 139A and 139B not moved.]
Baroness Scotland of Asthal Baroness Scotland of Asthal moved Amendment No. 139C:
Page 45, line 5, leave out "or (b)" and insert ", (b) or (ba)"
On Question, amendment agreed to.
Lord Goodhart Lord Goodhart moved Amendment No. 140:
Page 45, line 10, after "arrangement" insert "shall not vest in his trustee in the event of his bankruptcy and"
The noble Lord said: This probing amendment is intended to discover the proposed effect of a bankruptcy order on a right to periodical payments. I believe that the position should be similar to that of occupational and personal pensions. The position in that regard broadly is, first, that the underlying right to a future pension payment does not vest in the trustee in bankruptcy and therefore cannot be sold to pay debts; secondly, that the pensioner can retain part of the current payments—the guaranteed minimum payment in the case of a contracted-out occupational pension—but the balance of the current payment goes to a trustee in bankruptcy; and, thirdly, that after the pensioner has been discharged from bankruptcy, he or she gets the subsequent pension payments in full. That seems to be a good model for periodical payments for damages.
It would be distasteful in the extreme if someone's rights to substantial periodical payments for severe personal injury could be bought and sold. However, it is not clear that new Section 2(6) of the Damages Act 1996 achieves that. It provides for restrictions on the assignment or charge of the right to periodical payments, which I welcome. But what about bankruptcy? It is not mentioned in that provision. The fact is that the property vests in a trustee in bankruptcy by operation of law, not by assignment or charge. Subsection (6) does not appear to cover the case of bankruptcy. Have the Government formed a view about the effect that a claimant's bankruptcy should have on an order for periodical payments? Do the rights in fact vest in the trustee in bankruptcy? If so, can he dispose of them? What happens about periodical payments becoming payable during a period of insolvency? Do they vest in the trustee in bankruptcy? If so, should all or part of them remain
946
payable to the claimant? For example, should the claimant continue to be entitled to receive payments that would be equal to what he might otherwise receive in means-tested benefits?
This important issue needs more consideration than it appears to have received to date. I beg to move.
Baroness Scotland of Asthal: I say straightaway how grateful I am to the noble Lord, Lord Goodhart, for raising the issue of the insolvency treatment of periodical payments, which I agree is in need of clarification. He spoke on this issue at Second Reading. In my subsequent letter to him and other noble Lords, I set out my understanding of the current law. I have since been informed that the situation is more complicated than was suggested by the initial advice that we were given. We therefore welcome this opportunity to consider the matter.
This is a complex area of the law, and one which has not yet been tested by the courts. At present, the treatment of periodical payments in bankruptcy will depend on whether they are to be considered to be in the nature of "property" or "income" for the purposes of the Insolvency Act 1986. The law is unclear. If they are considered to be property, they would vest in the trustee, but any "personal" element, including care costs, would be held on constructive trust for the bankrupt. Those anxieties were highlighted by the noble Lord. If they are considered to be income, Section 310 of the Insolvency Act 1986 provides that income received after the date of bankruptcy may he claimed for the bankrupt's estate by way of an income payments order. New Section 2A(2) of the Bill ensures that income payments orders can be put in place where necessary.
We believe that periodical payments that relate to loss of earnings should be treated in the same way as the earnings of a bankrupt who is working. It is not fair to treat payments made to replace earned income differently from earned income itself. However, we recognise that different considerations should apply where a claimant is receiving periodical payments specifically to meet the cost of care needs and believe that it should not be possible for those to be claimed for the bankrupt's estate. Under current law, if periodical payments are treated as "income", it is unlikely that the court would make an income payments order in respect of care costs because the provisions of the 1986 Act specify that the court shall not make an order the effect of which would be to reduce the bankrupt's income below that necessary to meet his or her reasonable domestic needs.
If periodical payments are treated as property, care costs will be considered as personal and held on constructive trust for the complainant. We believe that the bankruptcy treatment of periodical payments should strike a balance which recognises that care costs should be protected but does not otherwise give those in receipt of payments preferential treatment over other bankrupts. We are in discussion with the Insolvency Service over an amendment to achieve that balance and to clarify the treatment of periodical payments. Therefore, my thanks to the noble Lord are

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very genuine, and I am sure that many claimants will thank him, too. I hope that the noble Lord feels able to withdraw his amendment in anticipation of the amendments that we shall bring forward on Report.
Lord Goodhart: Of course, in those circumstances, I shall withdraw the amendment. I am glad that the Government have now taken this matter on board and are dealing with it. I shall look forward with a good deal of interest to seeing the Government's amendments on this in due course. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Bassam of Brighton: This may be a convenient moment for the Committee to adjourn until after the consideration of Commons reasons on the Community Care (Delayed Discharges etc.) Bill. Therefore, I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.
Lord Bassam of Brighton: My Lords, I beg to move that the House do now adjourn during pleasure.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 1.31 to 3 p.m.]

Hereditary Peers' By-election
The Clerk of the Parliaments: My Lords, with the leave of the House, I am now able to announce the result of the by-election to elect a hereditary Peer in accordance with Standing Order 10.
Four hundred and twenty-three Lords completed valid ballot papers. A paper setting out the complete results is being made available in the Printed Paper Office and the Library. That paper gives the number of votes cast for each candidate.
The successful candidate was Viscount Ullswater.

Zimbabwe
3.1 p.m.
Lord Blaker: My Lords, on behalf of the House, I should like to congratulate the noble Viscount, Lord Ullswater, on his success. I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether it is their policy that the suspension of Zimbabwe from the councils of the Commonwealth should be continued.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Amos): My Lords, yes.
Lord Blaker: My Lords, does the noble Baroness agree that conditions in Zimbabwe have got worse in
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almost every respect since the suspension began just over a year ago, not least the horrendous political violence being perpetrated at the present time against the opposition? Does she recall that last Friday Mr Mugabe said that he could be,
"a black Hitler tenfold in crushing his opponents"?
If anything like the present situation in Zimbabwe persists until December when the review takes place, will it not be a travesty and very damaging to the cohesion of the Commonwealth if the suspension is not continued or strengthened? If that is the view of Her Majesty's Government, will they make it clear to the whole of the Commonwealth?
Baroness Amos: My Lords, the noble Lord, Lord Blaker, is right: the situation in Zimbabwe has got worse. We are awaiting publication of the review report from the Commonwealth secretariat. Noble Lords will be aware that there was a successful stay-away organised by the MDC, at which there was an 80 per cent success rate over two days. Since that successful stay-away, more than 600 people have been arrested and about 250 people have required hospital treatment in Harare alone. That is an appalling situation. The United Kingdom Government are working with our EU partners on a statement condemning the action which has been taken. The United States and others have already condemned it. I agree with the noble Lord that the credibility of the Commonwealth is at stake, and will be at stake in December when the Commonwealth discusses these issues again.
Lord St John of Bletso: My Lords, will the Minister tell the House what measures Her Majesty's Government are taking to encourage the efforts of Archbishop Ndungane, the Archbishop of Cape Town, who is doing sterling work to bring about some type of solution in Zimbabwe? Is the Minister aware of the offer of Morgan Tsvangirai, following the two-day stay-away last week, that he is now prepared to re-engage in discussions with ZANU-PF in the hope of forming a government of national unity?
Baroness Amos: My Lords, I am aware of the efforts of the Archbishop of Cape Town. Indeed, he came and spoke to officials in the Foreign and Commonwealth Office as part of a programme of discussion with key stakeholders. He has made two visits to Zimbabwe. As a result of his second visit, when he spoke to a range of NGOs and others, he is reflecting on next steps. I understand that yesterday President Mbeki, speaking to Parliament in South Africa, made it clear that he would be prepared to talk to the Archbishop as well.
With respect to the offer made by Morgan Tsvangirai, that statement was again welcomed yesterday by President Mbeki. Indeed, President Mbeki made it clear that South Africa would be willing to host any such talks if it would help to revive the initiative.
Lord Avebury: My Lords, given that the suspension of Zimbabwe will now continue until the CHOGM in

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December, will the Government encourage the troika to develop concrete yardsticks which can be applied by the heads of state in deciding whether to re-admit Zimbabwe? Will they ensure that one of those yardsticks is full compliance with the procedures in the Inter-Parliamentary Union, including co-operation in its investigation of the illegal arrest and torture of many opposition MPs, including—and in particular— Mr Job Sikhala?
Baroness Amos: My Lords, I take the point made by the noble Lord. Lord Avebury, with respect to the needs for benchmarks. However, the troika set benchmarks at their meeting last year at Marlborough House. One of those benchmarks is being used in terms of the review that has been undertaken, which is yet to be published.
The suspension from the councils continues on the basis of the Marlborough House statement. So it would be quite difficult to re-open that issue. But we could, with the Commonwealth, look at ways to ensure that further human rights violations are monitored and put to Commonwealth heads in December.
Baroness Park of Monmouth: My Lords, what action, if any, have we taken to bring a resolution of censure to the United Nations on this issue? Secondly, are we not able to give assurances to people who have been tortured and who may be able to escape from the country to South Africa or to a neighbouring country, that they will be received here without further preliminaries?
Baroness Amos: My Lords, with respect to the noble Baroness's first question about censure, we have, through the European Union, put a resolution to the United Nations Commission on Human Rights. The noble Baroness will recall that we had a similar resolution last year, which was not even put to the vote, given the blocking action by African countries. This resolution has yet to be taken at the commission, but there is an EU resolution which is being supported by other countries.
With respect to the noble Baroness's second point, she will be aware that anyone from Zimbabwe seeking asylum in the United Kingdom can claim asylum either on arrival in the United Kingdom or from a third country.
Lord Howell of Guildford: My Lords, now that we are hearing about the increased atrocities and mayhem being created in Zimbabwe, will the noble Baroness undertake to encourage her colleagues to maintain exclusion of this monstrous regime not merely from the Commonwealth but from all other international organisations where we have influence?
Further to the observation of my noble friend Lady Park, could we bring forward speedily a resolution to the United Nations and show the same vigour as the US Administration have already shown? Should we not be ahead of it, rather than following behind?
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Finally, could we not now draw up a list of those who have committed, or who are alleged to have committed, crimes against humanity in Zimbabwe—a list of potential war criminals, as it were—just to show that we are determined to act and are not prepared to let Zimbabwe go on for ever, rotting in the way that it is now doing?
Baroness Amos: My Lords, the noble Lord, Lord Howell, will be aware that the EU sanctions have continued. There was a sanctions rollover, so the travel ban, assets freeze and moratorium on the sales of arms continue.
On the noble Lord's second point about pursuing a resolution and pursuing it with vigour as the United States has done, I am not entirely sure to what the noble Lord refers. The United States has only just announced its list in terms of an asset freeze. With respect to a resolution, the United States supports the EU resolution, which is going to the UN Commission on Human Rights. The noble Lord will be aware that there have been discussions about the possibility of bringing the issue to the UN Security Council, but the view of many members of the Security Council is that Zimbabwe does not pose a challenge to international peace and security and that this remains a domestic issue. That is something we shall need to overcome. We are in constant discussion and dialogue—not only in the UN but with other partners—on this matter.
With respect to the noble Lord's final point about a list of those who are alleged to have committed human rights abuses, a number of organisations are amassing information with respect to human rights abuses in Zimbabwe. Putting individual names against those abuses is quite difficult, but I assure the House that it is a matter that is being looked at.

Human Rights
3.10 p.m.
Lord Clinton-Davis Lord Clinton-Davis asked Her Majesty's Government:
Whether they have any plans to establish a human rights commission.
Baroness Scotland of Asthal: My Lords, the Government received on 19th March the report and recommendations of the Joint Committee on Human Rights about the matter. We are giving careful attention to those and will give our response in due course.
Lord Clinton-Davis: My Lords, the Government have already done a great deal to advance a human rights culture. But does my noble friend agree that there is a decisive need for a central independent body—for example, a human rights commission—to oversee an educational programme, particularly in schools but also elsewhere, if the full purposes of the Human Rights Act 1998 are to be achieved?
Baroness Scotland of Asthal: My Lords, there is much force in what the noble Lord says. We have,

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therefore, expressed an intention to consider carefully the Joint Committee's report, which makes just such a recommendation. I can tell noble Lords that it repays very careful reading, and the Government intend to do just that.
Lord Lester of Herne Hill: My Lords, I declare an interest as a member of the committee to which the Minister refers. Is she aware that it is now more than five years since the Government expressed two cautionary reservations about a human rights commission, both of which have been met by the Joint Committee? The first was that they needed advice about how it might work; the second was that there should be a sufficiently high degree of consensus among the existing human rights organisations.
Is the Minister also aware that this is one of the most important pieces of unfinished business of the Cook-Maclennan constitutional agreement between our two parties? Can she assure us that it will not be kicked into the long grass for another five years?
Baroness Scotland of Asthal: My Lords, I am aware of the first two points. But it is only fair for me to remind the House—I am sure that the noble Lord does not need to be reminded—that the Joint Committee, quite properly, took two years to consider the matter. We do not complain about a moment of that time because we think that it will repay careful reading. As the noble Lord says, we must respect the report by examining precisely how the committee proposes to bring about the changes and by considering what is the Government's proper response to those carefully crafted recommendations. I assure noble Lords that the matter will be given anxious consideration across the Government.
Lord Renton: My Lords, having supported the Human Rights Act 1998 without any hesitation at that time, I remind the noble Baroness that, in the past year or so, it has been found to be unenforceable to some extent; therefore, if a human rights commission is set up, it would have much more limited powers than those envisaged under the Human Rights Act.
Baroness Scotland of Asthal: My Lords, with the greatest respect, I cannot agree with the noble Lord's comment. The Human Rights Act has not been shown to be unenforceable; it has been demonstrated to be an extremely well crafted Act, about which we should all jointly express great pride.
Baroness Whitaker: My Lords, I declare an interest as a member of the Joint Committee that drew up the report. When my noble friend considers the report, will she bear in mind, and communicate to her colleagues in
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the Government that, above all, our recommendations affect very positively the performance of the public services?.
Baroness Scotland of Asthal: My Lords, we will bear that in mind. I do not hesitate to repeat that there is much in the report that deserves careful consideration and much that many would welcome.
Lord Campbell of Croy: My Lords, do the Government consider that there already exist in this country organisations that possess the powers and functions to promote and maintain human rights? If not, will the first task of any commission be to obtain general agreement on defining what constitute human rights?
Baroness Scotland of Asthal: My Lords, all those issues are important. I do not know whether the noble Lord has yet had the full benefit of looking at the report, but many of those matters are explored in it. The noble Lord will know that the committee took evidence from very many people. I hope that the report will do just what it is doing today—exciting much debate and discussion—so that we can all have an appropriate level of pride about what comes out of it when the Government conclude their deliberations.

The Monarchy
3.16 p.m.
Lord Dormand of Easington Lord Dormand of Easington asked Her Majesty's Government:
Whether they will recommend the establishment of a Select Committee to consider the future of the Monarchy.
The Lord Privy Seal (Lord Williams of Mostyn): My Lords, no.
Lord Dormand of Easington: My Lords, is my noble and learned friend aware of the decreasing support for the monarchy, caused largely because people are against an unelected head of state? For that and other reasons, is it not time for a wide-ranging examination of the status of the monarchy, which could be undertaken by a Select Committee?
Lord Williams of Mostyn: My Lords, I do not believe that there is decreasing support for the monarchy. Recent history—the Jubilee year—demonstrates that. So, when my noble friend Lord Dormand asks me again for my answer, it is "No".
Lord Strathclyde: My Lords, notwithstanding the views of those who share the opinion of the noble Lord, Lord Dormand of Easington, is the noble and learned Lord aware that most people in this country

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will be immensely encouraged by what the Leader of the House has said? On behalf of Her Majesty's loyal Opposition we concur entirely.
Lord Williams of Mostyn: My Lords, yes.
Lord Smith of Clifton: My Lords, does the noble and learned Lord the Leader of the House agree with me that one does not have to be a republican to believe that it would be in the interests of the monarchy for a review to be held now in the light of its role in modern circumstances, particularly with regard to the exercise of the Royal prerogative?
Lord Williams of Mostyn: My Lords, I am aware of the current political—and perhaps legal—debate about the Royal prerogative. I know that views on the matter are strongly held, not always by republicans, as the noble Lord says. But this is a specific Question, with which I think I have dealt to the general satisfaction of noble Lords.
Lord Blaker: My Lords, will the noble and learned Lord suggest to his noble friend Lord Dormand that he might get together with me to make a survey of the states around the world that have elected heads of state—there are perhaps 150—to see whether he wishes to reconsider his views?
Lord Williams of Mostyn: My Lords, yes.
Lord Carter: My Lords, we have heard the views of the Official Opposition. Is my noble and learned friend aware of the views of the Liberal Democrats?
Lord Williams of Mostyn: My Lords, they do not normally have any.
Lord Roper: My Lords, I thought that the Government had noticed that we have them at least in the Division Lobby from time to time. But we appreciate the Lord Privy Seal's reply to the Question.

Children at Protest Meetings
3.18 p.m.
Lord Hardy of Wath Lord Hardy of Wath asked Her Majesty's Government:
What action will be taken as a result of the attendance of children of school age at recent protest meetings if persons with professional responsibility for the children are implicated in encouraging such attendance.
Lord Davies of Oldham: My Lords, questions about the professional conduct of any member of a school's workforce are for head teachers, governors and local authorities to resolve. Serious cases of teacher professional misconduct can be referred to the General Teaching Council.
Lord Hardy of Wath: My Lords, I thank my noble friend for that Answer. As a former schoolmaster, I
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agree with the professional associations, which feel that children should not take part in demonstrations and protests in school time. There is parental concern because of the question of legal responsibilities. Where children are away from school, with the encouragement or assistance of adults—whether they be on the school staff or not—the relevant school governors should take the matter seriously. Will my noble friend invite school governing bodies to consider the matter carefully?
Lord Davies of Oldham: My Lords, I recognise that, as a former member of the profession, my noble friend intends to do his utmost to uphold its prestige and reputation. There is no need for us to remind governing bodies of their responsibilities; they are able to discharge them. In the one or two cases in which the issue has arisen, the governing bodies have acted in exemplary fashion.
Baroness Blatch: My Lords, for the benefit of parents who meet their legal obligation by seeing that their children attend school, can the Minister say who is in loco parentis for children who, having taken time out of the school day to protest, are injured?
Lord Davies of Oldham: My Lords, when the pupil is registered at the school, the responsibility lies with the school for the duration of the school day. That is why schools recognise that children who leave the premises must do so under supervision and can be at risk. We are all conscious of the fact that, at times, things go wrong on school trips and visits. However, it is highly unlikely that pupils would be supervised on a demonstration, and, as far as the school is concerned, any student who has left the school during school time has broken the agreement with the school to attend.
Baroness Sharp of Guildford: My Lords, on these Benches, we agree very much with the Answer that the Minister gave. However, although we should discourage children from leaving school during school time to demonstrate, we should encourage them to demonstrate. Is that not a good way of encouraging them to take an interest in politics?
Lord Davies of Oldham: My Lords, that would depend on the subject about which the students were demonstrating. I can think of subjects that might cause consternation to all of us.
We all recognise that we live in a democratic society and that young people are part of that democratic society, although, if they are under voting age, they have limited rights. Like the noble Baroness, we want young people to have an understanding of the issues facing society, and we are keen to promote citizenship. From time to time, that is bound to give rise to interesting and involved debates about current issues.
Baroness Blatch: My Lords, the noble Lord did not answer my question. I asked who was in loco parentis in such a situation.
Lord Davies of Oldham: My Lords, I thought that I had made the situation clear. If the pupil has registered

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for attendance at the school, the school takes responsibility. If the students then take themselves off away from the school without permission, the school has an obligation to do something about it. In the first instance, it would notify parents, who would need to know about that unauthorised absence.
There is no doubt that, when a child under school leaving age registers at a school, that child is under the auspices of the school authorities.
Lord Hardy of Wath: My Lords, will my noble friend consider the fact that, in some cases, children from primary schools were involved in the demonstrations? Will he express the hope that the Liberal Party would not wish to see those children involved in demonstrations?
Lord Davies of Oldham: My Lords, I imagine that anybody who wants to be a Liberal has to start fairly young and, I hope, give up fairly young as well. My noble friend will recognise that my reference to the citizenship education that is part of the school curriculum did not apply to junior schoolchildren, only to those in secondary education.
Baroness Walmsley: My Lords, does the Minister agree that, if young people had the power to vote at the age of 16, they might not feel it necessary to protest on the streets?
Lord Davies of Oldham: My Lords, that is an interesting point, although the noble Baroness may have noticed that a fair number of adults have been protesting on the streets as well. They are of voting age, so the one does not exclude the other.
Lord Clarke of Hampstead: My Lords, has my noble friend heard of cases of school registers being marked with "W" for war or "D" for demonstration, instead of "A" for absence? Does he condone such things being done in the name of school governors and schoolmasters? Whatever the age of the pupils, they are absent, and their absence should not be condoned in such a way.
Lord Davies of Oldham: My Lords, as I indicated, it is for the headmaster, in the first instance, and the school governing body to make a judgment about such things. The department is concerned with overall attendance figures and the performance of local education authorities in improving attendance and reducing truancy.
Lord Avebury: My Lords, what use will be made of the photographs, including photographs of children, that were taken at recent demonstrations?
Lord Davies of Oldham: My Lords, as far as the schools are concerned, it is a matter of truancy. The schools will have the information that they need about whether a student has been in attendance. Schools
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keep a register, and the teachers are responsible for the attendance of children at the school during school hours. The issue of photographs does not come into it.
Baroness Park of Monmouth: My Lords, does the Minister agree that lessons in citizenship might cover the point that it is not good citizenship for young creatures way below voting age to kick the police and spit at them? That is not a good beginning to their life as a citizen. I hope that that will be expressly mentioned, when schools tackle the question.
Lord Davies of Oldham: My Lords, we would deplore such behaviour by young people in any circumstances. Although the Question has arisen because of anxieties about the unauthorised absence of children from school, most reports about the demonstrations have indicated a relatively low number of incidents of the kind to which the noble Baroness referred. In our debate yesterday, the noble Baroness, Lady Williams of Crosby, gave due testimony of the good relationships that obtained on the demonstration that occurred outside the House.
Lord Elton: My Lords, does the Minister accept that the concern is not so much about the truancy of children but about the possible condoning or assisting of that absence by staff? As an ex-teacher, I join the noble Lord, Lord Hardy of Wath, in saying that allowing it to happen is unprofessional conduct.
Lord Davies of Oldham: My Lords, I agree with that. Strong views are held about such issues, and teachers will play their part as citizens of a democratic society. However, the noble Lord is right: when they are in their position in school, they are professionals, and bias of any sort would be a negation of educational values.

European Parliament (Representation) Bill
3.28 p.m.
Report received.
Clause 3 [Recommendations by Electoral Commission as to the distribution of United Kingdom MEPs]:
Baroness Rawlings Baroness Rawlings moved Amendment No. 1:
Page 3, line 4, leave out "or anticipated change"
The noble Baroness said: My Lords, the amendment is designed to set out an important principle; namely, that a power as important as that affecting the franchise for the European Parliament should not be exercised by order, unless and until legislation to effect such a change has been agreed in the European Community. The clause allows the Lord Chancellor—while negotiations continue on the final numbers for each country and before any agreement is reached on the matter, still less any change in Community law—to order the expenditure of public money to investigate a range of possible outcomes as regards changes to our existing electoral arrangements.
In general, it is best to proceed on the basis of what the law is, not what it might be. I should therefore be grateful to the Minister if she could advise the House of the circumstances in which this power might be used by the Government.
I am prepared to accept that there may be many exceptional circumstances. There is the firm background of the Nice treaty. There is the impending accession of a large number of countries and the approaching date of elections to the European Parliament. Against that background, it is reasonable to explore changes in the franchise arrangements as envisaged under the Bill. But that could be treated as a special case. Exceptional circumstances do not justify permanent powers.
Is the view of the Minister that there might be a change in the law at some time in the future a justifiable pretext for taking a permanent power to incur spending on an investigation of possible electoral futures? I am not sure that it is. Therefore, I hope that the Minister will give some indication of where and when this power will he used and will explain the safeguards that there will he on the use of such an open-ended power. I beg to move.
3.30 p.m.
Baroness Scotland of Asthal: My Lords, this amendment will limit the circumstances under which the Lord Chancellor can take action to instruct the Electoral Commission to commence its redistribution work. I am grateful for the way in which the noble Baroness has put it; namely, that this is a probing amendment. The effect of the amendment would prevent the Lord Chancellor from asking the Electoral Commission to work on an expected number of MEPs.
Although we expect to be reasonably certain of the final numbers of MEPs for the 2004 elections by September 2003—by which time it is expected that all the accession states will have held their referendums—it is likely that the final figure will not be certain and fixed by Community law until it is too late for the Electoral Commission to finish its work and for the necessary implementation to take place. Clearly, that will simply limit flexibility and possibly prevent the work being completed in time. There can be no objection to beginning work early when a change is anticipated so that we can be quick off the mark when the final decision is made.
Furthermore, the Electoral Commission will be able to make recommendations, which would suit different possible numbers, to enable a review where the final position is uncertain. But it is only the recommendation which matches the final number fixed under Community law which can be reflected in the order.
Allowing work to commence on the expected number is simply prudent planning. I hope that that is an explanation with which the noble Baroness will feel able to be content.
Baroness Rawlings: My Lords, I am grateful, as ever, to the Minister for her courtesy in her reply and for all
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the briefing that she sent me. I thank her for such a detailed reply. Therefore, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 2 to 4 not moved.]
Baroness Rawlings Baroness Rawlings moved Amendment No 5:
Page 3, line 17, at end insert—
"( ) After the first issuing of a notice by the Lord Chancellor under subsection (1) after the coming into force of this Act, no further notice may be issued until the Lord Chancellor has invited the Electoral Commission to carry out a full review of the method of election of MEPs, including specifically the issue of whether it is the most effective means of allowing electors to choose the individual candidate or candidates of their choice from among all those standing for election, and the report of the Commission has been laid before both Houses of Parliament."
The noble Baroness said: My Lords, in moving this amendment, I do not pretend that the wording is perfect. But the point behind it is extremely important. It follows on from the spirit of an amendment moved by the noble Lord, Lord Rennard, in Grand Committee—an amendment with which this side of the House had a great deal of sympathy, but which was swatted away by the Minister as not relevant to the present Bill.
With respect, the issue is entirely germane to the present Bill which is about the representation of the United Kingdom in the European Parliament. Those of us who believe profoundly in the importance of the European Parliament, as I do, are deeply concerned by the degree of cynicism and alienation that surrounded the methods of election used in the last European elections. I do not believe that it is in the long-term interests of true representative democracy or the standing of the European Parliament to perpetuate that system of election.
The closed list system, used cynically, deprives the electorate of what this amendment asks that they should have; namely, an effective means of choosing an MEP of their own choice from among candidates set before them. Surely that right is the very essence of representative democracy.
As is well known, we on this side are not in general terms enthusiasts of PR systems. But the fact is that it is possible to have a PR system which allows electors to choose an individual MEP. Sadly, the Government chose a system in 1999 which deliberately deprived the electorate of that right. Instead, they placed the selection of MEPs in the hands of the central apparat of the various political parties through the notorious closed list system.
To its great credit this House, on six occasions, stood against that undemocratic system. Indeed, it never agreed to the imposition of closed lists. They were imposed by use of the Parliament Acts. No less an authority than the noble and learned Lord, Lord Donaldson of Lymington, has added his voice to those who argue that an Act such as this. passed by only one House of Parliament, is of questionable legality. But that is not the issue before us today.
However, I question whether this discredited and anti-democratic system can be allowed to continue indefinitely without question, as the Minister appeared to imply in Grand Committee. There is no one outside the ranks of the Government and their most robotic supporters outside Parliament who thinks that it should.
Amendment No. 5 is not a device to interfere with or to hold up progress towards treaty implementation or towards the next European elections. Doubtless, that change will be levelled, but it would be wrong. Nor is it a frivolous amendment. It addresses an issue of major concern. It simply states that at a certain point in the future after the first order issued under this Act, but before any subsequent order, the Electoral Commission should be required to conduct an investigation into the nature and application of the closed list system and into whether it properly allows the public to choose their MEPs.
It also asks that the report of the Commission should be debated in both Houses of Parliament. That is not an unreasonable proposition or an unreasonable expectation to have of the Government. Indeed, I believe that there would be agreement with this objective on all Benches of this House. I do not think that this House which fought so hard and for so long against closed lists should give up that fight.
I hope that the Government will listen and that the Minister will give an undertaking that there will be a full review of the validity of the closed list system. If not, I shall be tempted to return to the matter at Third Reading. Indeed, given any encouragement from noble Lords on the Liberal Democrat Benches, I might be tempted to test the opinion of the House. I beg to move.
Lord Goodhart: My Lords, indeed, that was a challenge. I am pleased to welcome the conversion of the noble Baroness, Lady Rawlings, to those who support a more democratic system of election than either the closed list or first-past-the-post systems. The Liberal Democrats were strongly opposed to the closed list system, which is probably the worst system invented for elections in multi-member constituencies. We have always taken the view that the single transferable vote system (STV) was clearly the best in these circumstances. Failing that, an open list system, which would enable voters to regulate the order in which members came on that list, was very much preferable to the closed list system.
Therefore, I support the idea of the Electoral Commission looking at this issue, although, on this occasion with no advance warning, I would not necessarily press the noble Baroness to divide the House. Certainly, it is a proposal that we should welcome and which we might well look at favourably.
Earl Russell: My Lords, I am in full agreement with all that my noble friend Lord Goodhart has said. Quite often we discuss the decline of interest in politics, but at Question Time this afternoon we discussed an
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increasing interest in politics. I think the common factor here is that interest in politics no longer can be translated automatically into support for a party.
A great many noble Lords in this Chamber feel very passionately about one or more political causes which have supporters in all three parties. Often those people wish to cast their votes, just as much as anyone else would wish to do so. But they cannot do so by voting for a party; they can do so only by voting for individuals who happen to have an attachment to that cause for which they stand.
That is something for which elections by a closed list system makes absolutely no allowance. Only if you can vote for the candidate because of the causes for which that candidate stands can you express your opinion. So getting away from the closed list is something which might do a good deal to revitalise interest in elections. Furthermore, it would lead to the point where, instead of having representation of the parties, we would have representation of the people. After all, that is what it is all about.
Baroness Scotland of Asthal: My Lords, this debate has echoed the vigour with which the matter was pursued when it was debated in 1999. It was right for the noble Baroness to remind noble Lords that on six occasions it was sent back to another place. But we know that, ultimately, it became the law of our country through the democratic processes we have all accepted and adopted. The will of the people, as expressed through those democratic processes, was therefore heard and upheld.
All I can say is that these are hotly contested issues about which people feel passionately. However, if I may speak frankly, the place for such discussion and debate is not as part of proceedings on this Bill. We have held only one election under the Act. By all accounts it was a successful election and marked just the beginning of the road. Of course in years to come further deep discussions may take place over whether that voting system is the one we want to adopt in the long term, but it is not for today and it is not for this Bill.
The amendment attempts to question the current voting system. Whatever the arguments, they go way beyond anything that could be done here. The effect of the amendment would be to engage the Electoral Commission in a long and complex review of a system which Parliament put in place only five years ago. As noble Lords will no doubt recall, that was a difficult and trenchant examination.
The Electoral Commission has a tight job to do in time for the elections in 2004. We think it appropriate for the commission to concentrate on that task. It would not be right to impose a requirement for a review of the system before going any further.
I know how tempting it is for the noble Baroness to say that she may seek to press the matter, but on this occasion I invite her to resist.
Baroness Rawlings: My Lords, I thank the Minister for her reply. I shall not detain the House today. We

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have tried to persuade the Government that this is an important matter. Perhaps it can be addressed on another occasion. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
3.45 p.m.
Lord Goodhart Lord Goodhart moved Amendment No. 6:
Page 5, line 34, at end insert —
"( ) The name of the combined region shall be the name of the existing electoral region followed by the words "and Gibraltar.
The noble Lord said: My Lords, this is a short and largely self-explanatory amendment which has been tabled in response to a letter from a person registered as a voter in Gibraltar. The names of the electoral regions are listed in subsection (3) of new Section 1 of the European Parliamentary Elections Act 2002. If the Electoral Commission were to so recommend, the Lord Chancellor could then decide that Gibraltar could be added to, say, the North East region for the purposes of the election, the North East being the region with the smallest number of voters per seat. That could take place, but it would not mean that Gibraltar would become a part of the north-east of England, because plainly it is not.
In order to explain what is the constituency, it would be more rational to say that the constituency is the constituency of the North East region of England and Gibraltar. I beg to move.
Baroness Scotland of Asthal: My Lords, Clause 9 provides the basic building block for the enfranchisement of Gibraltar—the creation of a combined electoral region consisting of Gibraltar and one of the existing regions of England and Wales. Clause 10 goes on to enable the Lord Chancellor to make an order to create that region following a recommendation from the Electoral Commission. The amendment would provide that the name of the combined region should include "Gibraltar". We believe that such an amendment is both unnecessary and disproportionate for achieving our shared aim of enabling Gibraltarians to vote. Of course I note the enthusiasm with which the noble Lord, Lord Goodhart, alighted on the North East to be the chosen area, but that is something which the commission will have to consider with a great deal of care.
The creation of the combined region and the requirement under Clause 14 for there to be a register in the Gibraltar area of the region of those eligible to vote in the European parliamentary elections will ensure the franchise of the people of Gibraltar. Eligibility to vote will be defined in the same way as in the United Kingdom; that is, by reference to residence in that part of the electoral region. Furthermore, Clause 15(1) of the Bill states clearly that, among other criteria, a person is entitled to be registered in the Gibraltar register if, on the relevant date, he is resident in Gibraltar.
Adding Gibraltar to the title of the region raises an interesting issue because the average electorate in an electoral region for European Parliament elections is 3.7 million people. While it may seem preferable for
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reasons of transparency to have the name of Gibraltar in the title of the electoral region, that could equally be seen by those living in other parts of the region to be disproportionate, given the size of the electorate in Gibraltar relative to some of the other geographical areas that may be included in the combined region.
Perhaps I may give an example. The Isle of Wight has an electorate of some 104,000 people, while Gibraltar has around 20,000 voters. But the Isle of Wight does not have its name in the title of the region and I would have some sympathy with its voters if Gibraltar were to become part of the same region—the South East region—its name included in the title and thus a disproportionate amount of attention from candidates and the media attached just to the concerns of the Gibraltar part of the region. While all the electors in the combined regions will need to be aware of the component parts of the region, that can be achieved more than adequately through the normal publicity and documentation that is provided during an election campaign, without the attendant dangers of deflecting the political debate unfairly away from the needs of the region as a whole.
During the debate on a similar amendment in another place, my honourable friend the Parliamentary Secretary acknowledged that literature distributed in Gibraltar would need to be clear on this matter. We shall be considering how best that can be achieved when the detailed implementation of the provisions contained in the Bill begins.
We should not forget that while it is our firm intention that the people of Gibraltar should be enabled to vote in the European parliamentary elections, those elections and the electoral system are for the whole of the United Kingdom. We must be seen to be enabling free and fair elections to take place on the same basis throughout all the geographical territories covered by the system. We believe that the way in which Part 2 of the Bill has been formulated achieves that for all concerned and that therefore the amendment is not appropriate.
Perhaps I may remind noble Lords that, in relation to the regions, it has become the practice to set out in a table in legislation which areas are included in each combined region. Thus the names of the various areas will be made clear in the table. As it does for all other regions, we think that that will suffice.
Lord Goodhart: My Lords, we on these Benches have always been in favour of the small battalions and in this context Gibraltar is certainly a small, but worthy one. The difference between Gibraltar and the Isle of Wight is that the latter is part of the south-east region whereas Gibraltar is not part of any of the regions to which it might become attached for the purposes of this Bill. However, I have made the point and I do not intend to take it any further. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 17 [Regulations relating to sections 14 to 16]:
Lord Goodhart Lord Goodhart moved Amendment No. 7:
Page 9, line 34, leave out "includes anything" and insert "is provision"
The noble Lord said: My Lords, in moving this amendment I shall speak also to Amendments Nos. 8 and 9. These amendments are intended to pick up comments made by the Delegated Powers and Regulatory Reform Committee. In its eleventh report the committee doubted whether secondary legislation was appropriate for establishing the right to vote, the right to register a vote as a voter or the right to serve as an MEP in Gibraltar.
The report pointed out that the corresponding disqualifications in the United Kingdom were mostly dealt with by primary legislation although in some cases it was brought in by secondary legislation referring to primary legislation in another Act of Parliament. The report pointed out that the disqualification under what are now Clauses 17(1)(d) and (g) and Clause 21(1) are not limited to making provision corresponding to provision in the United Kingdom.
The Government delivered a full reply to that, but the committee was not persuaded and repeated the comments I have already mentioned in its twelfth report. The effect of these amendments is not to require primary legislation, but to do the next best thing, which is to limit the powers under Clause 17(1)(d) and (g) and Clause 21(1) to the making of provision corresponding to that in the United Kingdom. That means that it will not require primary legislation, but that disqualification must be limited to grounds for disqualification established by primary legislation in the United Kingdom. That seems to be more appropriate than the apparently much wider powers which the Bill now gives to the Government to legislate by regulation. I beg to move.
Baroness Scotland of Asthal: My Lords, I believe that when we debated this issue in Grand Committee the noble Lord said that he was minded to consider the matter further and possibly return to it at Report stage. He has kept his promise.
The noble Lord has made clear the purpose of these amendments is to try to restrict the enabling powers in Clauses 17 and 21 of the Bill. Amendment No. 7 seeks to restrict the powers in Clause 17(1) to provisions which correspond to those which are made in regulations under Section 53 of the Representation of the People Act 1983. Such a restriction is neither necessary nor practical given the context within which we are working.
Clause 17 enables the Lord Chancellor to make regulations supplementary to Clauses 14 to 16 of the Bill, which relate to the provision of a Gibraltar register for European parliamentary elections, the franchise and the entitlement to be on the register. These regulations will set out the details for these
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matters and that detail will as far as possible be the same as that in the equivalent UK provision, adapted where necessary to reflect the position in Gibraltar.
For the benefit of the House I should also explain that the matters to which I have referred are dealt with in UK law by both primary and secondary legislation. However, much of that legislation applies only indirectly in the case of the European Parliament elections because the franchise for European parliamentary elections is derived principally from the United Kingdom parliamentary franchise. As a result there is a large amount of primary and secondary legislation which is applicable to the UK franchise and which is not set out in the European Parliamentary Elections Act 2002 or the regulations under that Act.
It has been necessary to provide for the establishment of a separate franchise for Gibraltar as clearly there is not a UK parliamentary register to rely on. So all the primary and subordinate legislation will need to be dealt with specifically under the Bill and adapted where necessary to suit Gibraltar's circumstances. We will of course need to consult with the Government of Gibraltar to be sure that we get it right. This provides some idea of the enormous task that this would present if we were to try to establish on the face of the Bill precisely all the issues dealt with under Clause 17 and then to replicate the UK provisions with appropriate adaptations for Gibraltar.
Our aim is to have all the necessary legislation in place by as early a date as possible and no later than the autumn, so that all those involved in preparing for June 2004 elections have plenty of time beforehand to make the necessary preparations. This would not be possible if more substantive amounts of detail were to be included on the face of the Bill.
The overall approach of this legislation is to treat the Gibraltar electorate in the same manner as voters in an existing UK constituency. Enfranchisement, therefore, is based on UK electoral law and the Bill will enable replication of the relevant UK rules for Gibraltar as far as possible. Similar groups of people will be enfranchised and covered by similar rules to those already in place in the UK.
Perhaps I may give one example. Clauses 15 and 16 of the Bill enfranchise Commonwealth citizens who qualify by satisfying the relevant immigration provisions and also residency requirements. Clause 17 gives the Lord Chancellor the power to make regulations concerning residency requirements and the definition of qualifying Commonwealth citizens. For maximum consistency across the combined region these regulations will effectively match the UK requirement and ensure that all voters in Gibraltar are treated in a fair and equal manner to the remaining voters in the combined region.
I hope that that clarifies the situation for the noble Lord. It is entirely in line with the commitments we have made, including our public notification to the European Council in February 2002. There may be those who are concerned about the powers being too wide, but the implied limitations within the Bill itself ensure that that cannot be the case.

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It remains our view, therefore, that all these matters are suitable to be dealt with under secondary legislation and indeed that it would be impractical to attempt to do otherwise. To restrict the powers in Clause 17(1) only to matters addressed by the regulations under Section 53 of the Representation of the People Act 1983, which are largely matters of detail and procedure, would mean that all other provisions that need to be made under Clause 17(1) would need to be made on the face of the Bill. I cannot believe that that is the noble Lord's intention.
I take Amendment No. 8 as intending to confirm that the matters addressed by subsection (3) are not challenged. However, I respectfully say that it is not right to refer to those provisions as being without prejudice to the generality of subsection (2), as subsection (3) includes a number of matters which are clearly distinct.
As to Clause 21, it enables the Lord Chancellor to extend the classes of those disqualified by Section 10 of the European Parliamentary Elections Act 2002 from being an MEP to include also persons having a connection with Gibraltar. The intention is to do this by both extending existing UK provisions so that they apply to Gibraltarians in similar circumstances, and also to include similar, but distinct, classes of people in Gibraltar to UK classes where UK classes cannot easily be applied to Gibraltarians.
Amendment No. 9 would restrict the power in Clause 21 so as to disqualify from being an MEP only classes of persons who are disqualified from being a member of the House of Assembly of Gibraltar. As with Amendments Nos. 7 and 8, Amendment No. 9 would restrict the power too far.
I hope that those explanations will satisfy the noble Lord that we have responded in a proportionate manner and will reassure him and the House that the powers in Clause 17 relate to matters which are suitable for delegation and which are limited in their scope by the very nature of the Bill.
Lord Goodhart: My Lords, I am grateful to the noble Baroness for the full explanation that she has given. Indeed, it goes somewhat beyond the explanation given in the letter from the Lord Chancellor to the Delegated Powers and Regulatory Reform Committee to which I referred.
I accept that there would perhaps be excessive rigidity in amendments on the lines that I have proposed, and that the Government's intentions are indeed proportionate to the purposes which it will be necessary to achieve in order to introduce Gibraltar into the European elections system. Therefore, in the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 8 not moved.]
Clause 21 [Disqualification from office of MEP]:
[Amendment No. 9 not moved.]

Community Care (Delayed Discharges etc.) Bill
4.3 p.m.
Baroness Andrews: My Lords, I beg to move that the Commons amendments and reasons be now considered.
Moved, That the Commons amendments and reasons be now considered. —(Baroness Andrews.)
On Question, Motion agreed to.

MOTIONS AND AMENDMENTS MOVED ON CONSIDERATION OF COMMONS AMENDMENTS AND REASONS
[The page and line references are to HL Bill 20 as first printed for the Lords.]

LORDS AMENDMENT
2 Clause 1, page 1, line 10, after "person" insert "other than a person receiving mental health services"
The Commons disagreed to this amendment for the following reason:
2A Because it is important for the Bill to be able to apply to all NHS hospital patients and it is discriminatory to exclude patients receiving mental health services.
Baroness Andrews Baroness Andrews rose to move, That the House do not insist on their Amendment No. 2 to which the Commons have disagreed for their reason numbered 2A, but do agree with the Commons in their Amendments Nos. 2B to 2E in lieu thereof.
2B Page 6, line 23, leave out from "regulations" to end of line 24 and insert "or an order under this Part is exercisable by the appropriate Minister by statutory instrument"
2C Page 6, line 29, leave out from beginning to "to" in line 31 and insert—
"(2A) Regulations under section 1 which—

(a)prescribe care for the purposes of the definition of "qualifying hospital patient"; and

(b)are made by the Secretary of State (or by the Secretary of State and the Assembly acting jointly), may not prescribe a description of care which is, or includes, mental health care unless a draft of the regulations has been laid before, and approved by a resolution of, each House of Parliament.

(2B) A statutory instrument which —

(a)contains regulations or an order under this Part, other than regulations which fall to be approved in draft by virtue of subsection (2A); and

(b)is made by the Secretary of State (or by the Secretary of State and the Assembly acting jointly), is subject"

2D Page 6, line 40, at end insert—
"mental health care" means any health services relating to mental health which are of a description prescribed by order;"
2E Page 7, line 34, leave out subsection (5)
The noble Baroness said: My Lords, I beg to move that the House do not insist on their Amendment No. 2 to which the Commons have disagreed for their reason numbered 2A, but do agree with the Commons in their Amendments Nos. 2B to 2E in lieu thereof.
Some people have argued that mental health patients must be excluded because it is simply not possible to carry out an assessment and arrange a care plan within the minimum interval provided for patients receiving acute care. The Government do not dispute that; indeed,

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we accept that it may well be the case. If it did seem appropriate to extend reimbursement to the mental health sector in the future, we would want to consider whether the level of reimbursement or the minimum interval should be altered to reflect any additional difficulties. The Bill already allows us to do that. So, as happens in Sweden, we could allow a longer period of time.
However, despite having allowed for different time-scales, I understand that noble Lords are still concerned about this. For that reason the Government have tabled amendments to require any regulations which bring patients receiving mental health care within the definition of "qualifying hospital patient" to be subject to the affirmative procedure.
Because the amendments have been added at this late stage, the drafting is rather tortuous. Perhaps I may explain the effect of the amendments, why they are necessary and how they relate to each other.
Although we originally thought that achieving this would mean an amendment to Clause 1, we were advised by parliamentary counsel that, because the substance of the issue is more to do with the affirmative procedure, the amendment is more properly located in Clause 8. Therefore, in Clause 8 we have added a requirement that regulations which prescribe mental health care must be subject to the affirmative procedure. That has meant that we also need to define "mental health care", and to do this it is necessary to add an order-making power to deal with the problem of definition in the most straightforward way. That order will prescribe mental health care as care which is received by a patient who is under a consultant psychiatrist. Two further consequential amendments have been added to Clause 9 and Clause 11.
The implications of these changes are that the existing set of regulations prescribing care, which are currently out for consultation, will have to be slightly amended to exclude this type of care, as defined in the order, as being outwith the definition of acute care. Then, as and when it is considered appropriate, we will lay before the House regulations bringing patients receiving mental health care within the scope of the definition of "qualifying hospital patient". If the Government decide in the future that bringing such patients within the provisions of the Bill would be an effective way of tackling the delays as regards community care services suffered by people with mental illness—a point addressed several times during our debates—Parliament will then be able to debate, and disagree to, any such regulations.
I agree with what the honourable Member for Chelmsford West said in another place; namely, that this group could be included in the future but should not be included at the moment. That is the right approach. I hope that noble Lords will be able to accept the Commons amendments.
Moved, That the House do not insist on their Amendment No. 2 to which the Commons have disagreed for their reason numbered 2A, but do agree with the Commons in their Amendments Nos. 2B to 2E in lieu thereof —(Baroness Andrews.)
Lord Clement-Jones: My Lords, I thank the Minister for introducing the amendments in such a clear and understandable way. The drafting makes perfect sense. I do not think that it is the first time today that I and my noble friend Lady Barker will use the word "flexible". The Government have demonstrated their flexibility on this point.
This is a difficult subject. We on these Benches still have our objections to the Bill, but the noble Baroness is coming forward with a number of different inducements to take nasty medicine. That is how we are treating the Government's approach to these amendments.
Our thanks are due also to the noble Earl, Lord Howe. Intorducing the affirmative process is an elegant solution. It was, as I recall, the noble Earl's suggestion and I am grateful to the Government for taking it up.
Earl Howe: My Lords, I join the noble Lord in thanking the Government for what I see as a very significant concession. I thank the noble Lord for what he has said as regards the small part that I have played in bringing it about.
Thanks are more properly due to the noble Baroness and her colleagues in the department. They have recognised that extending the scope of the Bill to patients in receipt of mental health services is a matter of considerable concern, particularly among those in the voluntary sector. This mechanism will provide a safeguard to ensure that, if any such extension does occur, Parliament has an automatic opportunity to examine it in close detail.
On Question, Motion agreed to.

LORDS AMENDMENT
5 Clause 2, page 2, line 5, after "hospital" insert "after 1st April 2004"
The Commons disagreed to this amendment for the following reason:
5A Because it is necessary for the Bill to come into force before 1st April 2004.
Baroness Andrews: My Lords, I beg to move that the House do not insist on their Amendment No. 5 to which the Commons have disagreed for their reason numbered 5A. I shall speak also to Amendment No. 47.
Noble Lords have argued throughout our debates on the Bill that it should not be introduced until April 2004. I understand concerns that we should not set up an unworkable scheme without regard to the consequences. I believe I can address those concerns and am pleased to do so. We have thought long and hard and want to be both fair and equitable, meeting the concerns articulated by noble Lords.

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Something upon which we in this Chamber are all agreed is that patients—they are mainly older patients—should be supported in leaving hospital when they are medically ready and that when current arrangements let them down, as occurs all too often, we have to act to put that right. Our problem with a further six months' delay beyond October this year is the very real risk that the benefits of the concentrated efforts already made by health and social partners will be lost. We know that much good work has already been done. Instead of local authorities and trusts across the country continuing to work together we are afraid that there could be additional delay.
I wish today to assure noble Lords that although the Government still intend to commence the provisions which implement the process—that is, the giving of the notices and the assessment—in October, they will not commence the provisions dealing with charging until 1st January 2004.
In addition, noble Lords will remember the commitment announced by the Secretary of State in November to transfer an extra £100 million to councils. budgets for each full year of the scheme's operation. I can confirm now that councils will proportionately receive £50 million for 2003–04. This will be paid as soon as practicable so that councils can invest these extra resources in expanding older people's services as fast as possible so that they can be well prepared for implementation in January. There will then be £100 million in 2004–05 and again in 2005–06.
We have delivered, therefore, a period of grace. It means that the NHS and local authorities will have a three-month period over the winter to prepare for full implementation during which the charging operates only in shadow form and no charges for delays will change hands. I believe that this will bring health and social care partners together and, crucially, allows for proper planning without the loss of momentum. Part 2 of the Bill will come into effect on Royal Assent.
I turn to the sunset clause, Amendment No. 47. We are still convinced that it is not an appropriate use of a so-called sunset clause. While delayed discharges are a serious matter for the patients and families, they can hardly be called a matter of national emergency. Neither is there any inherent reason for the Bill to come to an end in five years' time other than the Opposition seeking to limit its effect.
It is an important point. Are we really saying that noble Lords should be able to put a time limit on a Bill which the elected Government have brought forward? Constitutionally, I believe that that sets an extremely unfortunate precedent. In a previous debate, the argument was made elegantly by the noble Earl that it would be no bad thing if all Bills had a sunset clause. In certain cases, such as national emergency or where civil liberties are affected, that may be appropriate. But in the case of the majority of Bills there are already procedures for repeal or amendment. We have dealt with that. To require Parliament to revisit legislation without a very good reason for doing so places a fetter on Parliament's ability to legislate and to do so in this Bill would set an unfortunate precedent.
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We recognise that policies and Acts have a natural lifespan. However, in this Bill our goal is to encourage a reduction in delays through joint working and our expectation is that that will be achieved in the way we have set out with the additional funding In the unlikely event that in some areas the Bill does not work as well as we believe that it will, we have reliable and well-established procedures and monitoring systems which will give us an early indication of what is going wrong.
On those grounds, I hope that noble Lords are able to accept our changes and to reject the amendment.
Moved, That the House do not insist on their Amendment No. 5 to which the Commons have disagreed for their reason numbered 5A—(Baroness Andrews.)
Earl Howe Earl Howe rose to move, as an amendment to the Motion that this House do not insist on its Amendment No. 5 to which the Commons have disagreed for their reason numbered 5A:
5B Leave out "not".
The noble Earl said: My Lords, perhaps I may address the two issues in reverse order by taking first the issue of the sunset clause. That may seem perverse but the noble Baroness may understand shortly why I do so.
I listened carefully to what she said. In essence, she has taken many of the same lines of argument against the amendment as were used by the noble Lord, Lord Hunt, during our debate last week. I do not accept the arguments which attempt to portray sunset clauses as somehow anti-constitutional and as fettering the will of Parliament. If Parliament decides that an Act must be subject to a mandatory review in both Houses after a certain period of its operation, then Parliament is entitled to make that decision, no matter what the subject of the legislation. I take some comfort from the fact that it was not only Conservatives and Liberal Democrats who joined me in pressing that opinion through the Lobbies last week: there was also a heal thy number of very distinguished Cross-Bench Peers. I was heartened by and grateful for the support of all noble Lords who voted for the amendment. Nevertheless, in deciding what to do with the amendment today, I feel that I must take account of the considerable number of concessions made by the Government during the Bill's entire passage. They are not insignificant concessions. I do not propose today, therefore, to press the sunset amendment. I believe that we have had a useful debate on the subject. Another place has considered the issue and rejected it and there the matter should lie.
I turn, therefore, to the issue of the sunrise clause. I thank the noble Baroness for her extremely constructive and helpful speech. The amendment we are debating is, as she will know, one to which we attach very great importance. We do so not through a desire to make life difficult but because of the intense anxiety that exists in local government, the voluntary sector and the NHS itself about the speed with which the legislation was to be introduced. I shall not rehearse the arguments at length; that has been done

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enough already. But in essence they boil down to two concerns: the need for local authorities to put in place the necessary human resources to enable them to deliver what is required of them on the ground, especially home care services; and the need to deal with issues emerging from the ombudsman's report and the Coughlan judgment to ensure that there are properly understood and consistent procedures in place throughout the health service to deal with decision-making about NHS-funded continuing care.
Twelve months, I believe, was the minimum period necessary to allow for those matters to be expedited in order for the Bill to stand a chance of achieving its aims even on a restricted definition. This very day I received a letter from the Local Government Association which urges this House to continue supporting the inclusion of my amendment within the Bill. I do not believe that the noble Baroness should be under any illusion about the strength of feeling "out there" about this matter. However, this is the second occasion on which the House has had to decide this issue. Another place has rejected the amendment that was carried here last month.
There is, I think, a natural limit to the parliamentary process in that sense. Today the Government have made a considerable effort to be conciliatory. That has to be recognised; I do recognise it. In an ideal world, I would have wished for a deferral of the financial penalties until April 2004. However, from debates in this House and from my private discussions with the Minister, I do not believe that that is an end result which the Government would ever concede. If I have understood the Minister correctly today, she has very considerably expanded the concession made in Committee by the noble Lord, Lord Hunt. She said that the Bill will come into operation on 1st October 2003 but that the operation of the financial incentives and penalties will not commence until 1st January 2004. At the same time, funding of £50 million will be made available to local authorities as if the scheme had been fully operational for a full six months of the next financial year. If that is a correct understanding of the Government's offer, it represents a considerable step in our direction, and it would not be a productive use of parliamentary time to call a further Division on the issue.
Will the Minister tell us how the sum of £50 million is to be distributed among local authorities? Will she also allow me to press her on the amount of money itself? She will know that there is real worry in local government about the shortage of resources in social services. Will she undertake to leave the door open on the possibility of increasing the amount of money available during the coming financial year? The LGA has estimated that, if £50 million is distributed from October or perhaps even sooner, as much as £35 million will be swallowed up in fines between January and April 2004. That would leave little for investment into building up capacity, which everyone agrees is the single most important task for local authorities in the coming months.
The compromise offered by the Government, although not everything that we could have wished for, is a significant step forward. I thank the Minister for that. I do not propose to ask the House to express a collective view on the issue a second time. I beg to move.
Moved, as an amendment to the Motion that the House do not insist on their Amendment No. 5 to which the Commons have disagreed for their reason numbered 5A, leave out "not"—.(Earl Howe.)
Baroness Barker: I add my support to the noble Earl, Lord Howe. I realise that the Government have moved a very long way and that the blunt instrument that the Bill was a few weeks ago has been considerably sharpened.
I wish to question the Minister on timing. The issues of money and time are closely interrelated. We argued consistently about time being a precious commodity for local authorities. We have not focused much in our debates on the fact that, as well as new services being put in place, much effort will have to be spent on reshaping and redefining existing services, such as day care. We have not discussed those services much. They are not always provided directly by the local authority, and it will take some time to ensure that they become part of the whole process of rehabilitation of older people.
When will the £50 million be announced? It would be a much more effective investment if it were implemented very soon, way ahead of the Bill coming into force. There is a real possibility that when the fine system starts in January, in the areas where the system does not work for some reason and when the single assessment process is introduced in 2004, local authorities may begin the financial year with a deficit that they could not have worked out. January to March is a short time for them to reorientate their budget. Playing with budgets at the back end of the year is not always easy.
I agree with the noble Earl, Lord Howe, that it would have been preferable to introduce the system in April 2004, but that is not going to happen. However, there will be time for local authorities and the NHS to do some tight planning and redefinition of services. I stress that the NHS is integral to the process. I hope that the department teams responsible for the change will work closely with local authorities and the NHS during those six months to give them a steer to help them implement these measures successfully.
Baroness Howarth of Breckland: I associate myself with the comments of the noble Earl, Lord Howe, and the noble Baroness, Lady Barker. I do not want to repeat the arguments put so clearly by both of them, but I wish to add one comment. I declare an interest as a member of the boards of the John Grooms charity for disabled people, which means that I understand the issue of providers, and of the National Care Standards Commission, which means that I understand the issue of regulation. I wish to comment on how the process will affect providers, and the way in which they consider the issues across the board.

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I have nothing to say about the sunset clause. I welcome the additional time, but it is a great pity that it had to be brought about by pressure from the opposition Front Benches, with additional pressure from the Cross Benches. I could not be present due to other commitments, but I associate myself entirely with the comments made by other Cross Benchers.
Will the Minister discuss with her department the complications that the measure will cause on the ground for those who are providing and regulating such decision-making? In her introduction, she said that extending for a further three months might delay the impetus of partnership between health authorities and local government. I challenge that comment because local government and health authorities are struggling and working hard together to provide services. The difficulty is one of change management, as the noble Baroness, Lady Barker, pointed out. That takes time. There are also issues of resources. One has to have resources in the right place at the right time.
Only today, I heard that fees for registration and inspection in the sector will be increased by 20 per cent. Although that has been planned for the future, it gives rise to an issue of timing in change management; it is an additional issue that make providers feel that they are not valued. It also causes stress. It will not help if people are wavering over whether to close their establishments. It will become extraordinarily difficult for inspectors to make decisions when they go into homes.
I give that example as an illustration of how complex the issues are on the ground when people are trying to deliver services. In my experience, having worked many years in local government and the voluntary sector, most people want to provide the best service for the individual old lady who is facing them in the old people's home on that day. Only this morning, I heard on the radio about a home that was going to close because the local authority was unable or unwilling to provide fees for the residents.
I welcome the changes. But will the Minister discuss these matters further with her department? There is certainly not time enough to have in place what we need to have in place, but the move is valued by many Members of the Committee.
Baroness Finlay of Llandaff: I do not want to repeat all the arguments that have been made, as they have been most eloquent. I take a slightly different line with regard to these amendments, and the enormous changes that have been made to the Bill since it was first introduced to us.
I congratulate the Minister, but I also send congratulations to the noble Lord, Lord Hunt of Kings Heath, who is not in the Chamber today. He worked ceaselessly and tirelessly on the Bill, and the compromises that he could afford and that he negotiated have been carried on so well by the noble Baroness, Lady Andrews, who has taken over his role.
I also congratulate both Opposition Front-Benchers, who have helped to ensure that the Bill is workable. I believe that, as originally drafted, the Bill
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was completely unworkable. I have been involved in shadowing health authorities, a process which can work very well. Although I appreciate the widespread reservations which will remain until the Bill has been proven to work, I acknowledge those noble Lords for a job well done.
4.30 p.m.
Baroness Andrews: My Lords, I thank all noble Lords for their generous response. I do so particularly on behalf of my noble friend Lord Hunt, who put tremendous effort into the Bill. He is very happy that we have been able to achieve a workable outcome. Noble Lords in the Chamber have taken the Bill apart and to heart in different ways and I am grateful to them.
I shall try to answer some of the questions, the first of which was on money. I say to the noble Earl that the final decision on allocation will be made shortly. The matter has been considered, but it has not been decided because of the question of a starting date. We will let noble Lords know as soon as possible As for when the £50 million grant will be available, that will have to be debated in Parliament under Section 88B of the Local Government Finance Act 1988, but we will pay it to councils as soon as practicable after that.
I hope that that goes some way towards meeting the issues raised by the noble Baronesses. Lady Finlay, Lady Howarth and Lady Barker. We need to create capacity, allow time and provide resources as soon as possible so that people can see exactly what they have to do. The extra funding will help them to be better prepared. The access grant provides for additional funding for home care, intermediate care and community care, and the first tranche will come into effect in April 2003. So resources will be available almost immediately. All I can say is that we shall be monitoring what is happening to the £50 million. I can say no more on that as it is a matter for the Secretary of State.
The noble Baroness, Lady Howarth, referred to the changes. We are conscious that we are expecting a lot from social services and that many other events are occurring in their world which require careful management. However, we embarked on this legislation in the knowledge that people were being inappropriately placed in hospital and left to become worse rather than better. The spirit behind the Bill has been to provide a better future for those people. We are aware of the dedication and hard work of social services. We have every expectation that they will be able to meet the challenge. But we do not underestimate the challenge and we are aware of the other difficulties. I hope that our changes will signal that we are aware of what they need to do and that we support them.
Earl Howe: My Lords, I thank the noble Baroness for her reply. I beg leave to withdraw the amendment.
Amendment No. 5B, as an amendment to the Motion, by leave withdrawn.
On Question, Motion agreed to.

LORDS AMENDMENT
6 Page 2, line 8, at end insert—
"and

(ii) has consulted with the patient (and in the case of a carer in relation to assessment under the Carers (Recognition and Services) Act 1995 (c. 12) and the Carers and Disabled Children Act 2000 (c. 16)) to ascertain their views and preferences, informed them of the reason for the notification, and obtained their informed consent or in the case where a patient lacks the mental capacity to give such consent, has recorded on the file what steps have been taken to ensure that the patient's best interests have been duly considered"

The Commons disagreed to this amendment for the following reason:
6A Because it is unnecessary to require consent for the giving of notices containing no personal information and because Lords Amendment No. 9 makes more appropriate provision for consultation.
Baroness Andrews: My Lords, I beg to move that this House do not insist on their Amendment No. 6 to which the Commons have disagreed for their reason numbered 6A.
At Report stage we agreed a government amendment that places a duty on the NHS to consult the patient, and where appropriate their carer, prior to issuing a notice to the local authority of the patient's likely need for community care services under Section 2. That reinforces the existing good practice, supported by statutory guidance for Section 47 assessments as well as the single assessment process and the recently published discharge workbook. It is a key principle that the patient should be kept informed and be consulted at all stages of the assessment process. This amendment puts the matter beyond doubt by placing that requirement on the face of primary legislation.
Our amendment goes further, however, and requires consent. I understand that where the patient clearly gives or withholds consent to the question of whether social services should be notified, that would appear to be straightforward. In a previous debate, the noble Earl, Lord Howe, stated that he thought that few people would not want at least to have advice from social services on what services they might need when leaving hospital. The problem with the word "consent", however, is that the matter is not always that clear cut.
There are cases where the patient may refuse, thinking that he wants nothing to do with social services. He may be unaware of what social services can do, or afraid because he has never had any contact with social services. He may be concerned about the implications for his family, his privacy and his future life. There may be other cases in which an older person does not feel able to give a clear answer but wants to wait for a family conference before agreeing or wants someone to explain what is involved. In such cases the lack of consent would stop the NHS contacting social services. It would even prevent the social worker based in the hospital visiting, causing several days' delay in discharge planning. If consent were eventually given, it could still substantially reduce the time that social services had to assess and plan. Our amendment—
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which means that the NHS body must consult both the patient and their carer, if they have one, before issuing the notice—will mean that the patient knows that social services is involved.
As we said, in the majority of cases patients will be happy at least to have the options explained. For those who are concerned about what social services might do in their case, the social worker may be the very person to reassure the patient. However, that process must be given a chance. The NHS body must be able to start planning for discharge and needs to be able to notify social services. I reiterate again that all that is being given to the local authority with the Section 2 notice is the patient's name. So if the social worker arrives on the ward but the patient does not agree to social services involvement, they still have a right to refuse to co-operate or to accept the services on offer. That is why we believe that the government amendment was appropriate.
Guidance for the Bill will also clearly tell the NHS what steps that consultation should involve. We have made clear in guidance exactly what steps have to be taken. I can tell noble Lords that we would also be prepared to include in regulations that the Section 2 notice must briefly record the patient's or carer's views and the outcome of the consultation. We have therefore listened to the concerns, and we believe that that proposal will meet them. It will make clear to the NHS the importance of involving patients and families at that stage and of keeping them fully informed as to what happens next in the discharge process.
I hope that, with those reassurances, the noble Baroness will feel able to withdraw her amendment.
Moved, That the House do not insist on their Amendment No. 6 to which the Commons have disagreed for their reason numbered 6A.—(Baroness Andrews.)
Baroness Barker Baroness Barker rose to move, as an amendment to the Motion that this House do not insist on their Amendment No. 6 to which the Commons have disagreed for their reason numbered 6A:
6B Leave out "not".
The noble Baroness said: My Lords, I thank the Minister for that statement and for the helpful letter which the department sent last week to my noble friend Lord Clement-Jones. That letter set out many of the points that she has just made. I am glad that we have moved on from the position outlined in the draft regulations which seemed to give older people no say at all in the process. I believe that it is right to enable older people to have some influence in the process.
Always at the back of my mind was the fear that older people seeing the new system in operation as described at earlier stages would believe that if they went to hospital, nothing could be done to stop them going into an old people's home. That might seem an irrational fear to your Lordships but it is real to many older people. I am glad that it will be possible to explain to older people that such will not happen to them but that they or members of their family can be active participants.
I agree that many older people would like the opportunity of help from social services. Social workers can be of enormous help in explaining what is available. I hope that when the new system comes into force, there will still be room for flexibility and a human approach to older people in hospital—that we will not take away from nurses the ability to treat their patients holistically, which is part of good nursing. I am heartened by the Minister's comments. We have almost reached the point where I wanted us to be.
Moved, as an amendment to the Motion that this House do not insist on their Amendment No. 6 to which the Commons have disagreed for their reason numbered 6A, leave out "not.—(Baroness Barker.)
Earl Howe: My Lords, while the concessions made are not all on the face of the Bill, we now have a more patient-centred measure than before, which is a thoroughly healthy development. I retain a small measure of disquiet about possible abuse of patient confidentiality—even under the tighter rules that the Minister outlined. I add my thanks for the comprehensive letter sent by the Minister's colleague, Jacqui Smith, a few days ago.
It is important never to lose sight of patient confidentiality. We can be cavalier about it. We can even be cavalier about it within the confines of the NHS—but outside the health service, it is important to remember that sensitivities must be observed as much as possible. That said, we have taken several major steps forward and I thank the Minister for her part in that process.
Baroness Finlay of Llandaff: My Lords, I am grateful for the changes to the Bill, which is moving away from over-rigid enforcement of consent by patients—to whom the thought of signing something might seem threatening—in favour of consensus and assent.
I noted with interest the Minister's comment that the interview with the social worker would record the carer's views and the outcome of the consultation in the case notes. Can the Minister clarify whether that will be done in the clinical case notes from the patient's ward or in the case notes held by social services? That has some implications for who will audit the process and be responsible for making sure that consultations are routinely recorded—so that one can be sure that the process was one of negotiation.
As the noble Earl said, older people are often frightened about any breach of confidentiality—particularly in respect of financial issues. They are absolutely terrified of information about their assets leaking out and feel vulnerable to crime. When older people are ill, they may have a distorted perception of the world around them. Face-to-face contact with a social worker is important but we need to ensure that the audit processes are implemented, to ensure that the Bill's important provisions are continually enacted and that no shortcuts are taken—and so that if there are any local breaches, they can be acted upon quickly.
4.45 p.m.
Baroness Howarth of Breckland: My Lords, while recognising the need to respect patient confidentiality, a huge amount of aggregated data will be created that could tell us a lot about how services are being delivered. Is there any intention of collecting that data? I was recently involved in another review where it was clear that there was a huge lack of consistent information to underpin strategic planning. It would be useful if we could capture relevant data to provide good information for the future.
Baroness Andrews: My Lords, the noble Baroness, Lady Howarth, makes an important point. Part of the task of the team working on implementation will be to work out how such information can be most effectively used—perhaps as part of the single assessment process, if appropriate.
Perhaps I may say to the noble Baroness, Lady Finlay, that we are talking only about recording the fact that a consultation has taken place—so the clinical notes would not be relevant in that context. The Section 2 notice itself will provide the record.
Baroness Barker: My Lords, in view of the Minister's response, I beg leave to withdraw the amendment.
Amendment No. 6B, as an amendment to the Motion, by leave, withdrawn.
On Question, Motion agreed to

LORDS AMENDMENT
14 Clause 3, page 2, line 41, after "consulting" insert "the patient and having obtained the informed consent of the patient or, in the case where a patient lacks the mental capacity to give such consent to the proposed care plan, having recorded on the file what steps have been taken to ensure that the patient's best interests have been duly considered, and after consulting"
The Commons disagreed to this amendment for the following Reason:
14A Because it is unnecessary to add additional requirements in relation to community care assessments under clause. 3(3) and it is undesirable to differentiate between assessments under clause 3(3) and other assessments carried out under section 47 of the National Health Service and Community Care Act 1990.
Baroness Andrews: My Lords, I beg to move that the House do not insist on their Amendment No. 14 to which the Commons have disagreed for their reason numbered 14A.
The amendments in this group raise the crucial issue of informing and involving patients and carers in the performance of a social services assessments and decisions as to which services are to be provided. Amendments Nos. 14 and 15 propose that local authorities should consult patients and carers during the assessment of community care needs and obtain their consent to the care plan. Amendment No. 16 would further require the local authority to inform patients of the costs.
The Bill makes no difference to a patient's rights with respect to consent. Patients have an existing right not to consent to receiving the services that social

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services have assessed as being needed. Neither social services nor the NHS have the right to force services upon a patient who does not want to receive them.
Clause 3(11) makes it clear that the assessment and care planning process is part of the Section 47 assessment process and therefore one stage or part of the single assessment process. We do not want to undermine that connection or consistency. Singling out the assessment in the care planning process from all other Section 47 assessments and care planning would differentiate the process in the Bill from all others of assessment and care planning inside and outside the hospital—which would lead to confusion between agencies and lack of co-ordination.
I want to re-emphasise and reiterate our solution, given in a statement by my honourable friend the Minister in another place, for how we will tackle the concerns expressed in the amendments for all Section 47 assessments. Section 47(4) of the National Health Service and Community Care Act 1990 contains a power for the Secretary of State to issue directions as to the manner in which assessments are carried out. We will therefore issue a direction under this power to make it clear that the local authority, having assessed the needs of the patient, should consult the patient before deciding which services to provide, gain agreement to the care plan where possible and provide information about the costs of that care plan to the patient.
This will be the first time that this direction-making power has been used in 12 years. Through this direction we will require all Section 47 assessment processes to reach this standard on consultation and agreement. Therefore the effect will be far greater than an amendment to the Bill. Since it will affect all Section 47 assessments it will bring consistency to the assessment process, including the single assessment process, and it will be equally legally binding on all Section 47 assessments.
The direction would cover all the points made in Amendment No. 16 apart from an absolute duty to gain consent to the care plan and the exact wording on mental incapacity. This is because the use of the word "consent" could mean that the council spend months trying to gain consent to a care plan from someone who was unreasonably withholding consent. Since the 1990 Act it has been practice that assessor and user should agree the care plan and we would propose that the directions should carry the wording,
"take all reasonable steps to reach agreement",
which gives the right balance of reasonableness to both parties; the patient and the council.
We would not use the wording in Amendment No. 16 on mental incapacity because the exact form may cut across forthcoming legislation on mental incapacity. But we would certainly make the general statement that the council must ensure that the patient's best interests have been duly considered where they lack mental capacity. This reflects councils' current legal duty. I hope that having strengthened the Bill and the process, with that assurance noble Lords will not press their amendments.
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Moved, That the House do not insist on their Amendment No. 14 to which the Commons have disagreed for their reason numbered 14A.—(Baroness Andrews.)
Baroness Barker Baroness Barker rose to move, as an amendment to the Motion that this House do not insist on their Amendment No. 14 to which the Commons have disagreed for their Reason No. 14A:
14B Leave out "not".
The noble Baroness said: My Lords, in moving the amendment I shall speak also to Amendments Nos. 15B, 16B and 18B with which it is grouped. Throughout the Bill's passage we have fought tooth and nail for consent. The basis for our arguments has been in many ways the Bill's architecture, which we on this side of the House have found far too weighted in favour of the NHS and against patients. There has been a sort of pendulum process. We saw that the Bill was weighted one way, we tabled a number of amendments that took it in the opposite direction, and perhaps now the pendulum has begun to swing back.
What we have done and why we have done it have been open to misinterpretation. Throughout our discussions we were trying to reach the key word in the Minister's statement: agreement. I am glad that she has come forward with a proposal for directions that are about agreement. In our discussions we have been motivated by a wish to empower patients. I confess that during our discussions the Government were slightly unlucky in that they caught me at a time when a friend who was in hospital took a bath only to return to find someone else in her bed. That rather coloured my views of some of the speeches.
I also want to take issue with a remark made in another place on 19th March. The Minister said:
"Whether hon. Members in another place are the people in the real world is questionable, but we have listened to people who operate in the real world".—[Official Report. Commons, 19/3/03; col. 975.]
I have a piece of evidence that will prove that that is not true. As everyone knows, in "The Archers", Mrs Antrobus has just returned home from a period of intermediate care, and the whole of Ambridge and the rest of us are desperate to know whether Roy and Hayley are going to manage to enable her to stay at home. I am afraid that it does not get more real than "The Archers".
These amendments, particularly the one on assessment, are about enabling older people to go through a process that is time-linked, centred on their needs, and at the end allows them to say if the services provided for them were not right. Throughout our discussions we have talked a great deal about where and when assessments will happen. I have accepted what Ministers said: that acute hospitals full of MRSA are not places in which to make decisions about the

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continuing needs and support of older citizens. "The Archers" had it absolutely right the other day: Mrs Antrobus was wondering whether she could manage.
I think it is true that the BBC is party to a political conspiracy. How it knew that in these two weeks in Parliament we would be focusing on Iraq and delayed discharge I do not know, but it is marvellous that it did. I am being flippant, but I am trying to hit at the heart of the Bill, which is about older people being in a process in which they are able to play a part rather than having things done to them for the convenience of others.
I take to heart what the Minister said about all reasonable steps. It was never our intention that family members could hole older people up in hospital so that they could never leave. We were talking about setting standards in reaching agreement with older people about their care packages. I listened to what the Minister said about mental incapacity. I am slightly disappointed and remain convinced that old people with Alzheimer's or dementia or who have had strokes may Find themselves disadvantaged by this process. We will look at the important mental incapacity legislation with extreme care. I welcome what the Minister said about consent and I shall welcome the contribution of other noble Lords.
The Chairman of Committees (Lord Brabazon of Tara): My Lords, is the noble Baroness moving the amendment?
Baroness Barker: My Lords, yes I beg to move.
On Question, Whether the amendment shall be agreed to?
Baroness Barker: My Lords. no, the amendment is not moved.
[Amendment No. 14B not moved.]
The Chairman of Committees: My Lords, in that case the Question is that the House do not insist on their Amendment No. 14 to which the Commons have disagreed.
On Question, Motion agreed to.

LORDS AMENDMENTS
15 Page 2, line 41, after "body" insert "and the qualifying patient"
The Commons disagreed to this amendment for the following reason:
15A Because it is unnecessary to add additional requirements in relation to community care assessments under clause 3(3) and it is undesirable to differentiate between assessments under clause 3(3) and other assessments carried out under section 47 of the National Health Service and Community Care Act 1990.
16 Page 2, line 42, at end insert—
"( ) Before making a decision under subsection (3), the responsible authority must—

(a) consult the patient and his carer, if he has one;

(b) inform them of the cost of the proposed care plans; and

(c) obtain the consent of the patient and any carer and, where informed consent is given, record that on the patient's file, or if a patient lacks the mental capacity to give such consent, record on the file what steps it has taken to ensure that the patient's best interests have been duly considered."

The Commons disagreed to this amendment for the following reason:
16A Because it is unnecessary to add additional requirements in relation to community care assessments under clause 3(3) and it is undesirable let differentiate between assessments under clause 3(3) and other assessments carried out under section 47 of the National Health Service and Community Care Act 1990.
18 Page 3, line 8, after "consulting" insert "the carer and obtaining the informed consent of the carer to the proposed care plan and after consulting"
The Commons disagreed to this amendment for the following reason:
18A Because it is unnecessary to add additional requirements in relation to carers' assessments under clause 3(4) and if is undesirable to differentiate between assessments under clause 3(4) and other assessments carried out under the Carers and Disabled Children Act 2000.
Baroness Andrews: My Lords, I beg to move that the House do not insist on their Amendments Nos. 15, 16 and 18 to which the Commons have disagreed for their reasons numbered 15A, 16A and 18A.
Moved, That the House do not insist on their Amendments Nos. 15, 16 and 18 to which the Commons have disagreed for their reasons numbered 15A, 16A and 18A.—(Baroness Andrews.)
On Question, Motion agreed to.

LORDS AMENDMENT
23 Page 3, line 37, at end insert—
"( ) The responsible NHS body must give the patient and his carer, if he has one—

(a) notice of the day on which it proposes to discharge the patient, and where informed consent is given, record that on the patient's file, or if a patient lacks the mental capacity to give such consent, record on the tile what steps it has taken to ensure that the patient's best interests have been duly considered, and

(b) information about their right to request a review if they disagree with the decision to discharge."

The Commons disagreed to this amendment for the following reason:
23A Because the decision to discharge should not be subject to the consent of the patient and it is undesirable to discriminate on this issue between patients who are subject to the Bill and other hospital patients.
Baroness Andrews: My Lords, I beg to move that the House do not insist on their Amendment No. 23 to which the Commons have disagreed for their reason 23A.
The amendment raises the important issue of the information received by the patient and carer about the date of discharge. It is extremely important that the NHS gives the patient and their carers all the information they need to make discharge as safe and co-ordinated as possible. We agree that the patient and the carer need information about the discharge date as much as social services. I submit that they need that information just as much for every discharge, regardless of whether it is a discharge conducted according to the processes of this Bill, or whether a routine discharge is involved, by which the patient goes back to the care of his or her family. I again refer to the revised Hospital Discharge Workbook, which makes it clear that every patient is to be provided with information and advice throughout the discharge process, not just about the date but about the care that

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they will receive after discharge. As a further way of reinforcing that, I can confirm today that the regulations around the notice of the discharge date will require that the hospital confirms that that information has also been given to the patient.
Amendment No. 23 is seeking to go beyond that by placing an entirely new duty on the NHS to gain the patient's consent to discharge. As we said previously, that raises serious questions for the NHS as a whole and its general ability to function and to manage admissions and discharges on a rational basis. It would undoubtedly increase delayed discharges and the length of hospital stays.
If a patient had a right to consent to discharge, they would effectively have a legal right to remain in a hospital bed indefinitely. The decision that a patient is ready for discharge is one for the NHS body, but it needs to be taken in consultation with the patient/carer, social services and other health professionals by a suitably qualified member of hospital staff with responsibility for discharge. The guidance for the Bill will make it plain that the decision to discharge is one that must be taken in consultation with all relevant parties, including the patient/carer. That will be made clear in guidance. I would argue that even without that guidance, acting in that way is part and parcel of the NHS's general duty.
I cannot therefore accept that the patient must give informed consent to discharge. However, I understand the real concern that patients may leave hospital with an inadequate care package. The first step, which we have already debated, involves proper discussion between social services and the patient about the adequacy of care.
I know that noble Lords opposite are also concerned about older people who may be desperate to get home and therefore accept a care plan, which turns out, in practice, to be inadequate. We have responded to those concerns: the Section 7 guidance in the Bill will state that where the discharge plan is a care package in the person's own home, social services are to review the discharge care package, including that provided to the carer—if there is one—within a maximum of two weeks to check that the post-discharge care has been adequate and is working. The Section 7 guidance will include advice to monitor the arrangements in an even shorter time if there appears to be any concern that the post-discharge situation might be unstable. That means that any perverse effects that may arise can quickly be identified and addressed on an individual basis in a very short period of time.
There is much flexibility in that arrangement. Each patient's progress through the stages of assessment and care planning may differ and where there is an ongoing assessment, that will in itself be a review. The care plan can be updated as a result of that ongoing assessment. In those circumstances, the short-term review may not be needed or will become part of the longer-term review. A complex assessment could be carried out in interim care or it could be that the
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discharge plan involved a period of intermediate care, which in itself includes a review. Either way, we are providing for all eventualities in terms of home care.
On the other hand, we want that good practice of review after a short time to extend to other points in the care pathway; for example, where the person goes home after a period of care, such as intermediate care. We will introduce that through cross-references between guidance on the Bill and guidance on the single assessment process. We will be consulting fully on all that—we realise that it is a new element in the process, which I am sure noble Lords will welcome.
On the NHS side, we will make it clear in directions that every patient should be assessed against local criteria for fully funded NHS continuing care before social services are contacted about providing community care services and that patients should be fully informed about those criteria and that they can request a review. That will be confirmed in the regulations governing the Section 2 notice. We have also made it clear that the directions about the conduct of continuing care reviews will mean that those reviews must be conducted within 14 days. We have symmetry between the period of reviewing. During this time, if the patient is in hospital, he can remain there. I hope that that relieves some of the serious reservations of noble Lords.
Moved, That the House do not insist on Amendment No. 23 to which the Commons have disagreed for their reason numbered 23A. —(Baroness Andrews.)
[Amendment No. 23B not moved.]
On Question, Motion agreed to.

LORDS AMENDMENT
24 Page 3, line 45, at end insert—
"( ) The Secretary of State shall specify to the bodies charged with inspection of health and social services that they should monitor, at regular intervals, the impact of this Act on patients and their carers."
The Commons disagreed to this amendment for the following reason:
24A Because the inspection and monitoring system for health and social care services is adequate and the amendment is unnecessary.
Baroness Andrews: My Lords, I beg to move that the House do not insist on their Amendment No. 24, to which the Commons have disagreed for their reason numbered 24A. I will also speak to Amendment No. 25.
Amendments Nos. 24 and 25 would impose a permanent statutory duty on inspection bodies to monitor the impact of the Bill on patients and carers and a permanent statutory duty on the Secretary of State to report on an annual basis to Parliament on the outcomes of patients affected by the Act.
Perhaps I could restate the steps that the Government have taken not only to monitor the effects of policies on the NHS and social care in real time so that action can be taken if there are perverse effects, but also to evaluate policies. In addition, I remind noble Lords about the proposals in the Health and Social Care (Community Health and Standards)

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Bill to make the new inspectorates much more independent of government. In the light of that, the major problem that we have with the amendments is that it would be inappropriate, having just proposed that the Secretary of State would agree high level priorities only with the new inspectorates, immediately to start a detailed list of inspections that the inspectorates must perform. I hope that noble Lords accept that it would not be right to undermine their independence in that way.
Health and social care already involves a raft of ways of evaluating performance—performance indicators include delayed discharges, emergency readmissions, home care and people helped to live at home. We are also introducing indicators on the speed of service provision. Those indicators will quickly indicate if substantial problems arise, even if they are in only some local areas. The department is also carrying out work at the moment on improving the sensitivity of readmissions data, so that it more accurately reflects whether a patient is readmitted with the same problem as previously. We need to know that. Those mechanisms are robust.
The department's interest in reducing the unhappiness that delayed discharges cause will absolutely not stop when the Bill is implemented. In response to concerns about the impact of the Bill and incentives on behaviour in the NHS and social services and the effect on patients, we will commission an evaluation of the system and of its implementation during the first year of operation. We want to ensure that the system, and the incentives within it, are bringing about positive changes and identify any barriers to successful implementation. In addition, the implementation team, which is led and staffed by practitioners, will be encouraging local partnerships to have "dry-runs" of the system before commencement, which can also be evaluated by a wider reference group and fed back to the implementation team. We want to learn the lessons as early as possible. We will want to intensify that work from October until full implementation in January so that social services and the NHS feel supported when they introduce the new system of notifying each other and acting on those notices. At the same time, the implementation team can offer support to areas having particular difficulties—it will build on what has worked well elsewhere.
I return to the inspectorate. I know that noble Lords were concerned that there was a gap between the difference between collective quantitative information and quantitative information, so that we knew what was happening to the patient and the impact on him or her. I know that the noble Baroness, Lady Noakes, was concerned about that.
The Health and Social Care (Community Health and Standards) Bill proposes the establishment of two new health and social care inspectorates—the Commission for Health Audit and Inspection and the Commission for Social Care Inspection. One of their functions will be to validate performance statistics, but they will also monitor and report on the "whole system" with an emphasis on the experience of the
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patient and user of the service. We believe that that is a major step forward and one which noble Lords will welcome. The new CHAI inspections will include foundation trusts.
Noble Lords may be interested to know that the current inspectorates and the Audit Commission are already planning a wide-ranging and co-ordinated study of older people's services across health and social care. Field work will begin later this year and it will consider the new structures and report in 2005.
Both the new inspectorates will report annually to Parliament on the provision of NHS and social care. Their independence from the department will mean that instructions from the department about the detail and frequency with which they need to inspect older people's services would not be possible as the relationship between inspectorates and department is currently envisaged.
On that issue, the Commons reasoned that it was neither necessary nor appropriate to impose a permanent specific statutory duty on the inspection bodies to monitor the effects of the Bill or on the Secretary of State to report every year to Parliament specifically on the effect of the Bill. Therefore, I hope that noble Lords will accept that it is preferable to maintain this independence and that the additional evaluation that I have introduced today and the existing very robust mechanisms that we already have in place will meet the reservations raised at previous stages of the Bill.
Moved, That the House do not insist on their Amendment No. 24 to which the Commons have disagreed for their reason numbered 24A. —(Baroness Andrews.)
Earl Howe Earl Howe rose to move, as an amendment to the Motion that the House do not insist on their Amendment No. 24 to which the Commons have disagreed for their reason numbered 24A:
24B Leave out "not".
The noble Earl said: My Lords, I beg to move Amendment No. 24B and shall speak also to Amendment No. 25B. The noble Baroness's remarks today have demonstrated very encouragingly the weight that the Government appear to attach to the concerns that we on these Benches voiced in Committee.
An amendment which requires the Government to monitor the effects of the Bill looks innocent and straightforward enough but, in the context of this Bill, I suggest that it is of the highest importance. Even the Minister will acknowledge that the Bill takes us into new territory. Throughout our debates I have emphasised the possibility—indeed, the probability—of unintended consequences arising from its provisions.
What do we mean by monitoring? The noble Baroness is right. It will not be enough to collect quantities of bald statistical data. It will be necessary to tell the human story. We need to monitor the patient experience—that is, the effect that the Bill has on real patients being discharged from real hospitals.
The role of CHI and its successor body will be critical in that regard. I was interested to hear the Minister say that new CHAI will be more independent. I can tell her that we shall be looking very carefully at that point as the Bill goes through the House.
CHI will need to gain a much better handle, for example, on the causal factors underlying emergency readmissions. At present, I understand that it is simply not possible to say from the statistics available how many patients are being readmitted to hospital on an emergency basis for a clinical condition for which they were previously being treated. That kind of information is essential if the Government are to have any hope of implementing the system of financial flows which they have announced.
There is a need for transparency with this measure if we are to be 100 per cent satisfied that patients are being treated fairly and that corners are not being cut. I should like to hear what other noble Lords have to say on the amendment, if anything. As it appears that there is not a mad rush to speak to it, I believe that it remains for me to say that I am grateful to the Minister for the welcome assurances that she has given.
The Chairman of Committees: My Lords, is the amendment not moved?
Earl Howe: My Lords, the amendment is not moved.
On Question, Motion agreed to.

LORDS AMENDMENT
25 Page 3, line 45, at end insert—
"( ) The Secretary of State shall report on an annual basis to Parliament on the outcomes of patients affected by this Act."
The Commons disagreed to this amendment for the following reason:
25A Because the inspecting bodies for health and social care services will be able to make reports on the operation of the Bill.
Baroness Andrews: My Lords, I beg to move.
Moved, That the House do not insist on their Amendment No. 25 to which the Commons have disagreed for their reason numbered 25A. —(Baroness Andrews.)
On Question, Motion agreed to.
5.15 p.m.

LORDS AMENDMENT
26 After Clause 3, insert the following new clause—
"Duties of responsible NHS body following notice under section 2
(1) The duties under this section apply where notice of a patient's case under section 2 has been given.
(2) The responsible NHS body, and any other NHS body which is considering whether to provide services to the patient after discharge, must consult the responsible authority before deciding what services (if any) it will make available to him in order for it to be safe to discharge the patient.
(3) The responsible NHS body must give the responsible authority notice of the day on which it proposes to discharge the patient.
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(4) The notice under subsection (3) remains in force until the end of the relevant day, unless it has previously been withdrawn.
(5) The responsible NHS body may withdraw the notice under subsection (3) at any time before the end of the relevant day by giving notice of withdrawal to the responsible authority.
(6) For the purposes of this Part "the relevant day", in relation to a qualifying hospital patient, is the later of—

(a) the day specified in the notice under subsection (3); and

(b) the last day of the prescribed minimum interval after the notice under section 2 is given.

(7) Regulations may prescribe a period as the minimum interval after a notice under section 2 is given; but that period must—

(a) begin with the day after that on which the notice under section 2 is given; and

(b) be a period of at least two days excluding Saturdays, Sundays and public holidays.

(8) If the notice under subsection (3) is withdrawn before the end of the relevant day—

(a) the duty under subsection (3) applies again; and

(b) when a fresh notice under subsection (3) is given, subsection (6) applies again for the purpose of identifying a new "relevant day".

(9) Regulations may provide for—

(a) the time at which notices under subsection (3) are to be given;

(b) the form and content of—

(i) notices under subsection (3); and

(ii) withdrawal notices under subsection (5);

and the manner in which such notices are to be given;

(c) circumstances in which notices under subsection (3) must be withdrawn; and

(d) determining the day on which a notice under subsection (3) or a notice of withdrawal under subsection (5) is given (including provision prescribing circumstances in which a notice under subsection (3) is to be treated for any specified purpose as having been given on a day other than that on which it was in fact given)."

The Commons agreed to this amendment with the following amendment:
26A Line 25. leave out "excluding Saturdays. Sundays and public holidays"
Baroness Andrews Baroness Andrews rose to move that the House do agree with the Commons in their Amendment No. 26A to the Lords Amendment No. 26 and do propose the following further amendment to Lords Amendment No. 26:
26B Line 26, at end insert—
"(7A) Until 31st March 2005 the period of two days referred to in subsection (7) is exclusive of Sundays and public holidays in England and Wales."
The noble Baroness said: My Lords, throughout the Bill, we have discussed the inclusion or exclusion of weekends and public holidays from the minimum interval—that is, the time within which social services must assess and arrange services for a patient. The argument has been made that social services departments cannot and should not be expected to perform these functions outside of the normal working week.
However, as the noble Baroness, Lady Greengross, pointed out in our previous debate on this subject, we should surely be looking forward to a time when ways of working have changed and health and social care

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really do work together and support each other. She said that keeping people in hospital, for whatever reason, longer than is absolutely necessary is not acceptable in this day and age and that to put this requirement on the face of the Bill would not help patients.
An older person delayed in an acute hospital bed does not disappear or become any less vulnerable to the consequences of a delay simply because the weekend occurs and social services do not work at weekends. I believe that we should be moving towards a more flexible approach to working hours that means that the needs of individuals for community care services can be more effectively met. We believe that excluding Saturday, Sunday and public holidays from the face of the Bill would send entirely the wrong message about what is acceptable and what we expect in the future for our older people.
However, I know that many local authorities are not yet in the position where they would be able to provide services, for example, over the Easter bank holiday weekend. Although I believe that all local authorities should aspire to the practice of the best, which already provide assessment teams with extended hours and at weekends, I am prepared to give a commitment that we shall exclude Sundays and public holidays from the minimum compliance period in the first instance.
The amendment tabled by the Government would require the regulations to exclude Sundays and public holidays from the minimum period until 31st March 2005. That means that local authorities have nine months from now, without financial consequence, to prepare for Saturday working—something that most social services are already moving towards. But, because we accept that not all social services currently provide a seven-day service and could not move overnight to doing so, social services will have more time—until April 2005.—to plan for this. I also want to emphasise that April 2005 is the earliest date that seven-day working could be introduced.
The amendment gives only the date before which the regulations cannot be changed; it does not specify that the regulations will change on that date. Furthermore, we shall also state that any notice given by the NHS to the local authority in respect of a patient on a public holiday will be treated as if it were given on the following day. That means that there will be an extra day before the Section 2 notice informing the local authority of the patient's likely need for community care services and before the Section 5 notice informing it of the discharge date become effective.
I hope that noble Lords recognise that this represents a positive compromise. I hope they will accept that we do not want to give the message on the face of the Bill that it is acceptable for older people routinely to wait in hospital five or more days for an assessment or for services to be in place, which would be the case if the whole weekend were also excluded.
But I am happy to put on the face of the Bill that the regulations will exclude Sundays and public holidays until 2005 and will therefore give local authorities more time to adjust to new ways of working. I reflect
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again on what the noble Baroness, Lady Howarth, said about the need to recognise the pressure that local authorities are under. They will now have more time to carry out their duties from implementation. I hope that noble Lords will agree with the change. I hope that they will feel that they no longer need to insist on their amendment and will accept the government amendment in lieu. I beg to move.
Moved, That this House do agree with the Commons in their Amendment No. 26A to Lords Amendment No. 26, and do propose Amendment No. 26B to Lords Amendment No. 26.—(Baroness Andrews.)
Lord Clement-Jones: My Lords, the Minister has rehearsed the arguments. We have had them at every stage of the Bill. This has been one of the most closely argued areas of the Bill. I do not propose to go into all the rebuttals. There is much that I disagree with in what the Minister said. I still think that the arguments are strongly felt on both sides. The concerns on both Opposition Benches are about unsafe discharge at weekends and the problems of staffing in local authorities, which would have a knock-on effect on the patients. None of our arguments has been about the convenience of local authorities. They were about patients. We have to agree that that is common ground. The arguments were about what was best for patients.
In the best of all possible worlds—I think the noble Earl, Lord Howe, used that phrase earlier—we would press the amendment. We would like weekends and bank holidays to be excluded permanently as long as the Bill is in effect. However, we all recognise that the Minister has made a fair compromise. Time will tell whether local authorities can change their practices and whether discharge will be safe. They will at least have a fair run at it of a year and six months to get their house in order and see whether they will be able to start up at bank holidays and weekends as if they were ordinary working days.
I am pessimistic about that, but on the other hand, as with all these things, it is a matter of how far amendments should be pushed back and forth between the Commons and the Lords. We have reached the point at which insisting further would not be fruitful. We need to see the outcome of the proposals. The Government have come up with an elegant interim solution. Let us see whether it works.
Earl Howe: My Lords, I have a question to add to the remarks of the noble Lord, Lord Clement-Jones. If the Government see fit at some stage to introduce regulations that would bring about seven-day working, it is terribly important that local authorities are given adequate and reasonable notice. It would be helpful to hear from the noble Baroness that the Government will bear that point closely in mind should they decide to introduce seven-day working.
Baroness Howarth of Breckland: My Lords, I welcome the noble Baroness's compromise, but I should like to put straight on the record some of the

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underlying assumptions. I agree with the noble Lord, Lord Clement-Jones, that none of us wants to put the convenience of services above the needs of consumers, patients or users of any kind. That is the underlying position.
I am concerned that an impact assessment may well not have been carried out to look at workforce planning and the availability of staff over these periods. After all, social services run a number of seven-day services, including residential services for children and home care services. However, those workforces are already seriously in difficulty, as the noble Baroness will know from the various taskforces looking at workforce planning in that area. Like my colleagues, I am gravely concerned that we will be in difficulties and will be discharging people unsafely unless we have made that impact assessment before we move to a different work pattern.
Baroness Andrews: My Lords, we all share the concern that discharge should be as safe as possible. That is one reason why we have given such careful thought to the ideas that noble Lords put forward. I assure the noble Earl, Lord Howe, that we will certainly consult local authorities on any further changes and take advice, as we have done before.
I am conscious that the noble Baroness, Lady Howarth, knows more about good practice in social services than does any other Member of the House. She has rightly spoken about the need for proper workforce assessment and planning to determine the impact. Many professions are changing the way they work. Social services have already done so. The changes that we are proposing will be a natural development from where social services are at the moment, taking into account where they want to be in the future. I hope that in time the changes will be positively welcomed in the modernisation of the profession.
On Question, Motion agreed to.

LORDS AMENDMENT
35 After Clause 4, insert the following new Clause—
"Delayed discharge payments: supplementary
(1) In prescribing an amount under section 4(4) the appropriate Minister must have regard (among other things) to either or both of the following matters—

(a) costs to NHS bodies of providing accommodation and personal care to patients who are ready to be discharged; and

(b) costs to social services authorities of providing community care services to, and services to carers in relation to, persons who have been discharged.

(2) Any payment which the responsible authority is required to make under section 4 in relation to a qualifying hospital patient shall, subject to subsection (2), be made to the responsible NHS body.
(3) In case of any description prescribed in regulations the payment shall be made to the person prescribed in relation to cases of that description.
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(4) Section 4 shall not come into force until 30 days after the Secretary of State has determined that the systems of incentives within NHS bodies operate to discourage NHS bodies from discharging patients inappropriately."
The Commons agreed to this amendment with the following amendment:
35A Line 16, leave out subsection (4)
Baroness Andrews: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 35A to Lords Amendment No. 35.
Subsection (4), which Amendment No. 35A removes, would delay the coming into effect of the part of the Bill that deals with delayed discharge payments until 30 days after the Secretary of State has determined that there are sufficient incentives within the system to prevent the NHS from discharging patients too early. Noble Lords will know that we had some problems with the amendment, because it does not fit with the main structure of the Bill. However, I understand the concerns of noble Lords, and the noble Baroness, who has been particularly concerned with this, that we have over-focused on social services and that there should be an explicit fairness between them and the NHS so that patients are not discharged too early, with all the consequences that brings.
Noble Lords are right to want to ensure that discharge follows proper procedures and is safe. We certainly do. The existing Commission for Health Improvement has a remit to monitor quality and to ensure that trusts provide a high standard of care. Clearly, they would not provide that standard of care if they discharged patients too early. I referred earlier in the debate to the successor body to CHI, which will be more independent of the department and will have a remit to monitor and report on patient experience and behaviour. The noble Baroness was very concerned that we should get away from data and statistics to look at real people and real hospitals. That monitoring will clearly cover aspects such as the patient's journey through hospital and discharge to another care setting. Noble Lords will recall that older people's services are the subject of a forthcoming Audit Commission study.
The National Centre for Health Outcomes Development is working with the department on improving data on readmissions. In the light of what the noble Earl said in our previous debate, that is very good news. We will certainly keep noble Lords up to date on that. It will help us discern when readmissions are caused by bad discharge factors and not, for example, by the epidemiology of the area, the demography or the high rate of chronic illness.
However, in response to concerns that the NHS may have got off lightly, we need to emphasise that strategic health authorities have a particular role to play through their performance management, because readmission rates are a specific performance indicator and therefore also have a direct effect on waiting times and access targets, which are all used to determine a trust's star rating. It is not in the interests of a trust to discharge patients too early and risk their being readmitted, because the impact on a trust's star rating carries with it a real financial penalty for trusts, in that access to

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performance funds is limited to high-performing trusts. So, a trust with a high rate of readmissions risks losing access to extra funding and freedoms. A core discharge policy that led to readmissions could also lead to a trust failing its clinical audit.
Thirdly, the impact that high numbers of readmissions will have on the hospital's capacity acts as a disincentive to discharging patients too soon. If hospitals need to treat the same patient twice because they have come back as an emergency admission, they will have less capacity to treat patients on waiting lists. We are talking about enlightened self-interest as well as proper performance management.
It is essential to ensure that the system that we put in place is fair to patients and to social services and does not have any unintended consequences, such as causing a riot and readmissions. I believe that we have robust systems in place to prevent that occurring. Noble Lords will remember the commitment I made in our earlier discussion on Amendment No. 23, that we will issue guidance requiring social services to review the care package within two weeks of an older person returning to their home from hospital. This review will take place earlier if that person is particularly frail or vulnerable or living alone, which means that any problems can be picked up. As I said, this guidance will be issued under Section 7 of the Local Authority Social Services Act 1970. Councils will be under a duty to follow it.
The three-month period between October and December when reimbursement operates in shadow form also provides extra time for the NHS and social services to ensure that the new systems introduced by the Bill function properly and to make any necessary changes. I believe that the monitoring that will be carried out by the new inspection bodies, the two-week review of the care package, the period of shadow operating and the existing incentives on trusts to perform well are powerful enough to prevent the NHS from trying to cut corners in its discharge practice and will ensure that patients are protected when reimbursement is introduced.
This may be the last time that I shall speak with, as it were, any freedom on the Bill, so I conclude by saying that I am grateful to all noble Lords who have informed and illuminated the Bill and its impact on people leaving hospital in a vulnerable condition. It has been a robust but extremely positive and constructive debate. We are all agreed that the Bill is the better for it and it sends a strong powerful signal to those implementing the Bill that Parliament is fully behind it.
I also pay tribute to my noble friend Lord Hunt of Kings Heath who carried the Bill through four-fifths of its passage and responded with his usual commitment and intelligence—and slight scepticism at times—but always in good heart. At the end of the day there is absolutely no distance between us. As the noble Lord, Lord Clement-Jones, said, we have the common interest of the individual patient at heart. We very much hope that this Bill will make a material difference to their prospects when they leave hospital.
Moved, That the House do agree with the Commons in their Amendment No. 35A to Lords Amendment No. 35. —(Baroness Andrews.)
5.30 p.m.
Earl Howe Earl Howe rose to move, as an amendment to the Motion that this House do agree with the Commons in their Amendment No. 35A to Lords Amendment No. 35, leave out "agree" and insert "disagree".
The noble Earl said: My Lords, the noble Baroness will know that one of our objections to the Bill—and she has implied this in her remarks—is its one-sidedness. There is a yawning absence in it of any financial incentives and penalties which would bear down on the NHS in a manner commensurate with those bearing down on local authorities. I do not believe that it was an unreasonable expectation on our part that it should have been a more balanced affair than it is. This indeed was the impression conveyed by the Secretary of State when the Government's policy was originally announced. Without such a balance, the risk is that there will be nothing to deter hospitals from discharging patients too early or from rushing through the discharge procedure with excessive speed.
I believe that that is a very real worry. We are not convinced that the gradual introduction of financial flows over the next few years will represent an adequate counterbalance to the measures contained in the Bill, and certainly not for a considerable time. Nevertheless, I do not think that any purpose would be served by sending the amendment back to another place today. I say that partly because of the concessions which the noble Baroness has already made on the issue of monitoring. I was glad to hear what she had to say on that topic. I cannot stress too strongly that it will be the monitoring of how the Bill works in practice that will be of most value in informing and shaping future hospital practice.
That is not to say that ex post facto monitoring is as powerful a determinate of behaviour as financial incentives. We could have hoped for such incentives to be in place from the outset. Alas, they will not be. Nevertheless, I think we have some powerful substitutes in the work that will be done by CHI and its successor.
In the light of that perhaps cautions acceptance of what the noble Baroness has said—I welcome all the thought and care that she has devoted to the Bill since she took over the mantle from the noble Lord—I beg to move in order to give the noble Baroness, Lady Barker, an opportunity to say a few words. I beg to move.
Moved, as an amendment to the Motion that this House do agree with the Commons in their Amendment No. 35A to Lords Amendment No. 35, leave out "agree" and insert "disagree". —(Earl Howe.)
Baroness Barker: My Lords, I am sure with the minimum of three days I could get the hang of the procedure. I wish to ask the noble Baroness to clarify

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something she said. She talked about the reassessment happening within two weeks of discharge from hospital. I understood from her comments on an earlier amendment that the period was two weeks after someone had returned to their own home from intermediate care or another form of care and not just from an acute hospital.
I was being flippant earlier on, but actually I believe that is one of the most important parts of the Bill. It is its underpinning and the determination of whether it works in the best interests of older people. I am extremely serious.
I wish to pay tribute to the noble Lord, Lord Hunt. He approached the Bill, as he did many others, with a wonderful mixture of conviction, scepticism, charm, tolerance and occasional bewilderment at the antics of these Benches, for which I thank him. I congratulate the noble Baroness on the way that way she has taken over so effectively.
Finally, I want to put my thanks on record to the Bill team. We have made contributions to this Bill which have been far more of the real world than some of those made in another place. I believe it has been a combined effort by us all to make an unworkable Bill much more workable.
Baroness Andrews: My Lords, in response to the noble Baroness's question, I said that we would look at both discharge from hospital and discharge from other forms of care. But all those matters will the subject of consultation. I am sure that the noble Baroness will be able to join in that process.
Earl Howe: My Lords, I join the noble Baroness, Lady Barker, in everything she said about the helpful and constructive approach adopted by the noble Lord, Lord Hunt, and the noble Baroness, Lady Andrews. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Motion agreed to.

LORDS AMENDMENT
47 After Clause 17. insert the following new Clause—
"Duration
(1) Subject to subsection (2), Part 1 of this Act shall cease to have effect at the end of five years beginning with the date on which it comes into force.
(2) If the Secretary of State is satisfied that it is necessary for social services authorities to continue making payments in cases where the discharge of patients is delayed for reasons relating to the provision of community care services or services for carers, he may make an order providing that Part 1 of this Act shall continue in force for a further five years.
(3) An order may not be made under subsection (2) unless a draft of that order has been laid before, and approved by resolution of, both Houses of Parliament."
The Commons disagreed to this amendment for the following reason:
47A Because the provisions of Part I should not be made to have only temporary effect.
Baroness Andrews: My Lords, I beg to move.
Moved, that this House do not insist on their Amendment No. 47 to which the Commons have disagreed for their reason numbered 47A. -(Baroness Andrews)
[Amendment No. 47B not moved.]
On Question, Motion agreed to.

Courts Bill [H.L.]
5.40 p.m.
House again in Committee on Clause 92.
[Amendments Nos. 140ZA and 140ZB not moved.]
Baroness Scotland of Asthal Baroness Scotland of Asthal moved Amendment No. 140ZBA:
Page 45, line 24, leave out second "or"
On Question, amendment agreed to.
Baroness Scotland of Asthal Baroness Scotland of Asthal moved Amendments Nos. 140ZBB and 140ZBC:
Page 45, line 27, at end insert ", or

(d) the source of payment under the new method is a government or health service body."

Page 45, line 33, at end insert—
"(1A) For the purposes of section 2(4)(c) and (7)(d) "government or health service body" means a body designated as a government body or a health service body by order made by the Lord Chancellor.
(1B) An order under subsection ( 1A)—

(a) shall be made by statutory instrument, and

(b) shall be subject to annulment in pursuance of a resolution of either House of Parliament."

On Question, amendments agreed to.
Baroness Scotland of Asthal Baroness Scotland of Asthal moved Amendment No. 140ZBD:
Page 45, line 37, leave out "or"
The noble Baroness said: I shall speak also to Amendment No. 140ZBE. In the event of the insolvency of an insurer funding periodical payments, new Section 4, inserted in the Damages Act 1996 by Clause 93, provides that the claimant's payments are fully protected under the Financial Services Compensation Scheme. In order to receive compensation under the scheme, it may be necessary for the claimant to assign his or her right to the payment to the scheme manager. Amendments Nos. 140ZBD and 140ZBE ensure that claimants can do so without having to seek the court's approval. I beg to move.
Lord Hunt of Wirral: I shall know these affectionately as the "zebedee zebedoo-dah" amendments. There must be a better way of listing amendments. The references 140ZBD and 140ZBE give much cause for merriment, but the Minister has moved the amendments with her usual clarity.
On Report, I shall seek to return to the question of whether "or" is disjunctive or conjunctive, and the extent to which throughout the Bill "or" appears

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where I believe that it should not appear and does not appear where I believe that it should. But that merriment lies ahead. In the mean time, I welcome the amendments.
On Question, amendment agreed to.
Baroness Scotland of Asthal Baroness Scotland of Asthal moved Amendment No. 140ZBE:
Page 45, line 40, at end insert ", or

( ) a person's power to assign a tight to the scheme manager established under section 212 of the Financial Services and Markets Act 2000."

On Question, amendment agreed to.
Lord Hunt of Wirral Lord Hunt of Wirral moved Amendment No. 140ZC:
Page 46, line 3, leave out from beginning to end of line 42 on page 47.
The noble Lord said: We now move to a very important debate on periodical payments. As I mentioned, they are much welcomed by a range of bodies, including the National Health Service Litigation Authority, the Medical Defence Union, the Medical Protection Society, the Association of British Insurers, the International Underwriting Association and various other bodies representing claimants and defendants.
That is the general welcome. The concern is that there is provision in the Bill for the structured settlement, involving a series of periodical payments, to be reviewed. That appears to be an open-ended situation. If the provision were implemented, there would be genuine concerns that the concept of reviewability would cause more litigation and endless uncertainty. I know that many people involved in work for and on behalf of people with disability believe that that could put claimants under constant scrutiny and that there would be financial instability for defendants, whether they were government departments, the National Health Service or insurers and re-insurers and their policy holders. There is a belief that it could be a fatal flaw.
One of the points made by the Minister that received a warm welcome was that she foresaw the widespread use of periodical payments. I agree that lump sums are unsatisfactory. To some extent, they place huge pressure on the people least able to cope. The Minister added that she did not want the reviewability provisions to jeopardise the new concept. I could not agree more. If the Bill is to allow reviewability in the way presently outlined, some provision must be inserted to restrict its use. The provision for review could pursue the adversarial system for the rest of a claimant's life and impose undue burdens on defendants. In certain cases, insurers might feel that a programme of surveillance was justified, to make sure that the claimant used the funds appropriately.
Several other issues arise from this group of amendments. I realise that it is not a matter for the Minister, but I must point out that seven amendments in my name have been grouped. I know that we are anxious to make progress on the Bill, but we will need
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time on Report to go into the matters in further detail. I want to hear what the Minister has to say about the amendments before deciding which issues to take forward in a wider debate.
Amendment No. 140ZC would leave out the provision for reviewability. Amendment No. 140C would lay it down clearly that, for reviewability to be allowed, it would have to be envisaged in the original court order that that variation would take place at some stage. The amendment would insert the following words:
"provided that the original court order for periodical payments expressly permits a party to apply to a court for variation in those circumstances".
Amendment No. 141ZA is in the name of the noble Lord, Lord Goodhart, but I have tabled Amendment No. 141ZB, which is a similar amendment. It is a rather lengthy provision, but it would allow variation only if there had been serious deterioration or a substantial improvement. The change would have to be of some magnitude for variation even to kick in at any stage. I shall come back to Amendment No. 141A.
Amendment No. 141AA would delete the provision whereby the Lord Chancellor could take steps, even if those steps would be better taken by the civil justice rules committee. Amendment No. 141 AB would omit lines 27 and 28 from page 46—the Henry VIII provision—which would leave out the opportunity for an order to be brought forward in any way that would amend the enactment. There is another amendment that would delete the words "or amend". Subsection (4) reads:
"An order under this section may apply (with or without modification) or amend an enactment about provisional further damages".
That would create a tremendous uncertainty because it allows anything to be enacted.
Amendment No. 141C seeks to ensure widespread consultation. I do not want to descend into a debate on whether the wording should be "may" or "shall", but I hope that the Minister realises the imperative of consultation. Amendment No. 141D would leave out the opportunity for the Lord Chancellor to consult with,
"such persons as he thinks appropriate",
but to consult,
"as widely as is reasonable in the circumstances".
Perhaps that gives the noble Baroness an opportunity to comment on the extent of the consultation envisaged.
Amendment No. 141E is an important amendment which seeks to ensure that these provisions are not retrospective. Before dealing with Amendments Nos. 141EA and 148A, I shall pause to spend a moment considering retrospection.
The effect of uncertainty cannot be underestimated. Looking back over recent years, there have been many examples of the stockpiling of claims that are awaiting decisions on levels of damages, multipliers, interest rates and now costs. There are also many examples of the backdating of increases in damages and costs. Therefore, there are real concerns that the provision

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for possible retrospective effect would create a serious problem for all those involved in structured settlements.
To give an example: at the moment there are a number of structured settlements being entered into. That is being encouraged. They are being entered into with the consent of the parties. Will they be entered into when the parties to them realise that now these provisions could be retrospective? The structured settlement into which they are entering could be changed at some stage and reviewability imposed on an already existing agreement that does not allow for it. On the face of the Bill that would be possible. Any comments from the Minister would be much appreciated. Otherwise, I fear that we may see a sudden full stop to the evolution of structured settlements.
That demonstrates the dangers of variation. Although I spoke about the need to restrict the provision, I still return to the fact that most people to whom I have spoken outside this House regard the possibility of variation as a very serious flaw—perhaps even a fundamental flaw—in the development of structured settlements. It is a serious worry.
It is a worry not only to insurers, reinsurers and claimants, but I know that it is a particular worry to the National Health Service. I recall a very effective speech today made by the noble Baroness, Lady Finlay of Llandaff. She pointed out that the provision now for the National health Service has been increased so that the anticipated claims for clinical negligence now stand at £5.25 billion. That is an appalling figure. Of course, it takes into account the likelihood of settlement of all claims as determined by actuaries. But in 12 months the total liability has increased by £850 million.
One reason why it has increased so substantially is that there have been a number of retrospective changes to the law which have resulted in damages awards being revisited and increased substantially. As the noble Baroness pointed out, the total of £5.25 billion is not to be paid out in any one year. The actual sum paid out during the 2001–02 financial year amounted to £446 million. But that, in itself, was £31 million more than the amount paid in 2000–01.
Aside from the NHS Litigation Authority, which has made its views very clear, the two main organisations here are the Medical Defence Union and the Medical Protection Society. The MDU has made a strong case against reviewability which includes some of the points I have already made: lack of finality and certainty; difficulty in defining the circumstances that might give rise to review, in particular for the defendant; causation—to which I shall return in a moment; costs; the wishes of the parties and retrospective costs.
Causation is an interesting point. If a structured settlement is reached, but is open to review, in many medical negligence cases or cases involving allegations of medical negligence, it will be necessary to determine the extent to which a change in circumstances is related
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to the negligent act rather than, for example, the effects of an illness, old age or another reason unrelated to the original negligence. That would require revisiting the whole problem. I can well understand why the Medical Defence Union is so concerned about this aspect.
The Medical Protection Society has also demonstrated a point made by a whole range of defendants; namely, that the society needs to be able to close its books, as do insurers and reinsurers. Reviewability will create a continuing uncertain liability that would be extremely difficult to manage. For example, the bodies would need to increase their reserves to meet the possibility of an order for increased payments demanded, say, 10, 20, 30 or even 40 years after the initial settlement. Furthermore, the MPS has pointed out that, as a mutual organisation, it collects from its members the subscriptions needed to meet expected liabilities. The introduction of reviewable settlements introduces a huge degree of uncertainty about those future liabilities.
In many cases of clinical negligence a claim that reaches court may well relate to what had happened years earlier. However, the MPS provides indemnity on an occurrence basis; that is, provided that the doctor was in MPS membership at the time of the incident giving rise to the claim, he or she can apply for assistance even if they ceased to be a member long before the claim is made. So the introduction of rules applying to new claims is retrospective from the society's point of view because they apply to past subscription years. The society also makes the point that I have already put forward concerning claimants being spied on.
I shall end on the most serious point of all. Reviewability may inhibit rehabilitation. I believe that there is now a widespread consensus that what is most important in such claims is to ensure that, where appropriate, everyone's efforts concentrate on helping the individual to secure an early and prompt return to work or, in other circumstances, to an early and prompt return to the community. Later we shall address the question of future medical care, but surely the emphasis in all these structured settlements—we wish them well because a system of periodical payments is far better than the old lump sum damages system—should be that the interests of the claimant, the victim, are paramount.
Lastly, as I mentioned earlier, those involved with organisations promoting disability rights feel strongly that in all this, the central focus must be placed on getting an individual back into the work and back into the community. They fear that reviewability may well inhibit the process. I beg to move.
6 p.m.
Lord Goodhart: I shall speak to Amendments Nos. 141ZA, 141A and 141B in this group. This is part of a very important group of amendments. Clause 92 is probably the most controversial clause outside the provisions relating to the administration of the magistrates' courts. It certainly caused great concern to the insurance bodies such as the Association of British Insurers and the Medical Protection Society.

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The right to re-open a claim for damages in very limited circumstances has existed for several years by virtue of Section 32A of the Supreme Court Act 1991, which was introduced by a later amendment. Basically, that provides that the original damages may be awarded on a provisional basis in very limited circumstances. Amendment No. 141ZA brings the restrictions on claiming provisional damages into the definition of the circumstances in which it will be possible to re-open an award which has taken the form of periodical payments.
What has to be shown before an order can be made is that in the original case it was proved or admitted that there was a chance at some definite or indefinite time in the future that the injured person would develop, as a result of the act or omission which gave rise to the cause of action, some serious disease or suffer some serious deterioration in his or her physical or mental condition and the court assessed the provisional damages on the assumption that the injured person would not develop the disease or suffer deterioration in his or her condition. That simply transposes those restrictions into periodical payments.
A right to re-open a case in those limited circumstances, whether it be provisional damages or periodical payments, seems justifiable. There are clearly cases where a condition may develop and there may be a serious deterioration in the condition, but it is simply impossible at the time of the hearing to determine. In the past, before it was possible to claim provisional damages, it led to the case being delayed as long as possible so it was possible to ascertain as accurately as may be done, whether the condition was likely to develop or not. Introducing provisional damages has made it unnecessary to delay the case in those circumstances.
There are cases where the damages cannot be easily assessed until a future date when it becomes clearer whether a condition will develop. If the court was forced to come to a final view at the original trial it might award a great deal too much in damages or a great deal too little. I entirely accept that in such circumstances a power of variation is needed both as regards provisional damages and periodical payments. I also believe that these are rare circumstances. I understand that few orders have been made for provisional damages.
Therefore, I agree with most, but not all, of what the noble Lord, Lord Hunt of Wirral, said. The issue on which I disagree is retrospectivity. From what I have said it is obvious that I do not agree that there should be no power of variation, but it should be at a limited level on the basis of the provisional damages limitation.
Amendment No. 141ZA would restrict variation to cases where the court, when making the original order, has expressly allowed the claimant to come back for further damages at a later date.
There are a number of reasons for this. First, if there were to be a general right to come back for damages, it would be likely to add substantially to the cost of insurance. It would also mean, for example, that
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medical records relating to any case where the claimant had been awarded damages—or periodical payments—would have to be kept for decades just in case further actions arose.
Despite that, if I thought that, in general, it would be for the benefit of claimants if they were allowed to reopen claims at a later date because of some change in their condition, I would support a general right. However, there is clear evidence—referred to by the noble Baroness, Lady Finlay of Llandaff—to show that a general right to reopen a claim for damages would not be in the interests of most claimants because of the importance of closure and the importance of the claimant, having received damages, being able to get on with his or her life.
Under proposed new Section 2B(1) of the Damages Act the Lord Chancellor may allow a variation of an order to be made in any circumstances that he specifies. As I understand it, the Government intend, at any rate initially, to restrict the circumstances in which an order for periodical payments could be reopened. But that would leave the power, which could be exercised by some future Lord Chancellor, to give a general right to reopen cases. I believe that that is inappropriate. Certainty is of great importance here. It is plainly undesirable that insurers should he faced with the risk that, at some time in the future, the Lord Chancellor might return to this legislation and widen the circumstances in which a variation could be made. I believe that we should place the same limits on the variation of periodical payments as apply in primary legislation to the variation of the order for provisional damages.
I turn to Amendment No. 141A. It is largely consequential on Amendment No. 141ZA. It seeks to remove paragraph (b) in proposed new Section 2B(3) of the Damages Act 1996. It would remove the provision under new Section 2B(3) that an order may make provision,
"which has effect irrespective c f the conditions or other terms of the court's order or of the agreement".
That wording is extremely wide. It is highly undesirable to allow existing orders or agreements to be overridden. That should not be allowed to happen. It is not clear, frankly, what is the purpose of new Section 2B(3)(b). It also appears to be in some conflict with the provision in new Section 2B(2)(b), which allows the courts to reopen a structured settlement only if the agreement for settlement expressly allows that to happen. Will the Minister explain in what circumstances the provision in new Section 2B(3)(b) can be used. It may have some legitimate purpose; but, if so, I believe that it could be contained in a narrower set of words.
I have also tabled Amendment No. 141B in this group. Its effect would be to remove the words "or amend" from subsection (4) of proposed new Section 2B. The noble Lord, Lord Hunt, referred to that. The subsection states:
"An order under this section may apply (with or without modification) or amend an enactment about provisional or further damages".

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While it may be appropriate to allow consequential amendments, the power appears to go a long way beyond consequential amendments. It could be used to alter the existing primary legislation about provisional damages so as to extend the circumstances in which provisional damages could be awarded. That is a matter we have not discussed and will not discuss. It is highly undesirable that it should be possible to introduce the power by secondary legislation even if, as is provided by subsection (6), it has to be by the affirmative resolution procedure.
Finally, I refer briefly to the issue of retrospectivity. I am unable to agree with the noble Lord, Lord Hunt, on this part of his argument. There is already a power to award provisional damages. Where there is a power to award provisional damages by definition there must be a power to reopen that award; otherwise the damages would not be provisional. I cannot understand any real difference of principle which would require us to refuse to allow an order for periodical payments to be varied in circumstances where, if the order had been made for provisional damages, it could have been varied. I do not believe that the matter would have the serious consequences suggested by the noble Lord, Lord Hunt.
Subject to that, I entirely agree with the noble Lord's views on the issue. Therefore, I am happy to support in general what he said.
Baroness Finlay of Llandaff: I have spoken to this group of amendments but perhaps I may add a couple of points and comment on matters raised.
The noble Lord, Lord Goodhart, rightly highlights how damaging delays are for patients, in particular if that is on the premise that, "We'll see what is going to happen". I understand that for a small number there is an argument for an interim settlement followed by a rapid review. There is a danger that the patient will feel in a state almost of suspended animation from the time of the interim settlement until the review. The benefits are very small. On balance, unsettled issues for patients can be psychologically damaging.
As the noble Lord, Lord Hunt of Wirral, said, uncertainty hangs over patients. It is like a sword of Damacles. Patients are terrified that they will be watched, with any recovery going against them. Uncertainty works against them in clinical care. Perhaps I may outline the reality of a patient currently going through litigation. Everyone is frightened of looking after him. The patient goes into hospital because he is ill or into another part of healthcare because he has something wrong with him and needs treatment. However, because there is ongoing litigation all clinicians are scared of dealing with the problem. It is a natural response. There is a huge tendency towards defensive medicine. Defensive medicine is not good medicine. With good medicine, one is always undertaking risk assessment and going for management which is of least risk and most benefit to the patient. But there are no absolutes. It is always a matter of professional judgment on behalf of the clinicians.
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When one is being defensive in one's practice, that balance and clinical acuity is often impaired. I have seen patients who have gone back for repeated operations, offered to them in good will and with the best of intentions. They have been accepted by the patients in the false hope that they will be a magic answer to their problems but they have only compounded the problems. I had one patient in my care who was operated on 30 times. It all began when he was reoperated on when in the process of a complaint—a litigation—against someone from a previous operation. A downward spiral can occur in clinical care.
The other problem is rehabilitation. I declare an interest, because I run a chronic pain management programme for patients who have chronic intractable pain that has not responded to any interventions when all interventions and investigations have been exhausted. I know from first-hand experience that patients do not do well who undergo litigation and have not achieved closure. They are always worried that someone will say that it is all in their minds, as a way of getting out of financial or care liabilities. Such patients cannot move on in the rehabilitative process, and it becomes almost a waste of expensive resources in pursuing a rehabilitative programme when, psychologically, they and their families are not ready for it.
Such patients come under huge pressure from those around them, who love them. Everything that happens to them is blamed on the original problem. Whenever they get a headache or a backache, which we all get from time to time, it is blamed on the original problem. People tell them that it must be because of what happened to them, which reinforces their inability to rehabilitate and move on. To put it in simple words, it impairs their ability to look at the bits that still work well and maximise them, and to learn to live with the bits that are damaged.
For those reasons, and because of my genuine fear that the clinical care of these patients will be seriously compromised if it is known that they are in the process of litigation that may go on to be revisited, I do not believe that the process of review of structured periodical payments or any other type of settlement would do any patient a service. In fact, I fear that it would do patients a great disservice.
6.15 p.m.
Lord Renton: Unlike the noble Baroness and the two noble Lords who spoke before her, I cannot claim to have had any experience or expertise in the working of this matter. I retired from the Bar when I was 66, which was 28 years ago. However, as a parliamentarian who happens to be a lawyer, I like to see any legislation dealing with the administration of the law put into workable and simple phraseology and practice.
Amendment No. 140ZC would remove from the Bill a system that would cause delays and unnecessary confusion. Surely, the aim of obtaining necessary flexibility should be achieved in ways that do not cause delay. On page 46, in new Section 2B, under the

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heading, "Variation of orders and settlements", we find a most elaborate scheme. The Lord Chancellor is given wide powers to cause variation without, it seems, much consultation on his part.
Under subsection (6) we find:
"An order under this section … shall be made by statutory instrument".
It cannot be made,
"unless the Lord Chancellor has consulted such persons as he thinks appropriate".
But who are they? Are they the parties to the action which perhaps took place long before? The order may not be made,
"unless a draft has been laid before and approved by resolution of each House of Parliament".
Of course it is right for Parliament to lay down what the law should be and endeavour to achieve justice, but it is extraordinary to suggest that the variation of an order should become the responsibility of Parliament, requiring that a draft be laid and approved by resolution of each House of Parliament.
The provision goes into further complication when it states that the statutory instrument,
"may include transitional, consequential or incidental provision".
We are anxious to achieve justice. Indeed, as I understand it, although it is so many years since I practised, the Supreme Court Act 1991 and the Damages Act 1996 have caused justice to be further obtained. However, I sympathise with the views put forward by my noble friend Lord Hunt of Wirral when he criticises the whole scheme of new Section 2B. I most earnestly hope that the noble Baroness, on behalf of the Government, will think twice about it.
Lord Donaldson of Lymington: I have just one small point. The noble Lord, Lord Renton, was speaking, as I understood it, in contemplation of the Lord Chancellor making an order with regard to a specific case. I certainly had not so read it. I had thought that this was a power to create categories of case in which the court can take that action. Perhaps the Minister will tell me whether I am right about that.
Baroness Scotland of Asthal: I thank all noble Lords who have so far spoken. A number of themes are clear. First, there is general assent to the need for periodical payments and for them to be robust. Secondly, there is total agreement that closure—mentioned by the noble Baroness, Lady Finlay of Llandaff—for claimants who find themselves involved in this sort of litigation is absolutely critical. We hope that the way in which the Bill is currently phrased will enable such closure to take place, and the variation which is permitted within the Bill will not do violence to that principle. This group contains some very complex and detailed amendments and I want to do each of them justice. I think that they merit individual consideration.
These amendments, none of which is consequential on any other, all relate to the provisions in the Bill for the variation of periodical payments orders and settlements. Amendment No. 140ZC would remove Section 2B entirely. I am sure that the noble Lord, Lord Hunt, will
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not be surprised to hear that the Government cannot accept this amendment. The principal purpose of periodical payments is to meet as accurately as possible the actual needs of claimants as they arise. The provision of a power to allow scope for variation in defined circumstances is an important element in realising the full benefit of periodical payments. I say in passing that the comment of the noble and learned Lord, Lord Donaldson, was apposite.
Our recent consultation paper sought views on a number of options. The majority of respondents. were in favour of some form of variation, with a significant number wanting something much wider that that which we are now proposing. However, I fully understand the views expressed by the insurance industry and medical defence organisations—and their desire for certainty regarding their outstanding liabilities, which were fully outlined by the noble Lord, Lord Hunt. For that reason, we have adopted a cautious approach to variation.
As stated in the Explanatory Notes, the order will, as far as practicable, adopt the mechanism currently applying to claims for provisional damages. The circumstances in which further damages may be requested shall be set out in the initial order oft he court and relate only to the individual claimant's medical condition attributable to the original accident.
There are two small but important differences when compared with provisional damages: the rules on variation will allow defendants to apply, and the circumstances will include both deterioration and improvements. Circumstances sufficient to justify a variation will have to amount to a significant change, which will keep minor disputes away from the courts.
Our intention is that the power to vary awards of periodical payments will be tightly drafted and carefully controlled—including a requirement for the court's permission before any application can be made. Any future exercise of the Lord Chancellor's power to specify the circumstances in which a n order can be varied would be subject to consultation and affirmative resolution by Parliament.
Such a restricted system of variation should not require additional compensation over and above that already payable. Insurers are already providing for such eventualities—usually by way of contingency payments—but because the amount of the award has to be calculated at the time of the original order, that can involve estimates of future need that may not be accurate. I am sure that your Lordships have known of many such instances.
In some cases, claimants might not receive the compensation to which they are justly entitled, resulting in their needs not being met or having to be funded by the taxpayer. In other cases, defendants and insurers may make substantial and unnecessary payments for events that never occur. That is clearly the worst of both worlds.
In cases where there are real difficulties in assessing the likelihood of a claimant developing a particular medical condition or overcoming a medical disability at the time when the periodical payments order is

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made, a variable order can provide the best solution. The Government recognise that in the majority of cases a non-variable award is likely to be more appropriate. Many foreseeable changes can be built into an annuity—and some are. The annuity can be used in a flexible way to reflect anticipated changes in the claimant's needs. There is no reason for that not to continue. The more creative that the insurance industry can be in providing flexible annuities to meet future change, the less likely that wider scope for variation will be needed. It will be less likely too that the order-making power will need to be used again.
I reassure the Committee that we have no plans to extend the scope of variation after the initial order. We want to see how the intended regime works. But that should not prevent us from keeping open the option of extending or limiting further the extent of variation in the light of experience and future developments in the insurance market, or making any minor adjustments should that prove necessary. I believe that an order-making power provides the flexibility to do so and is the best way of dealing with variation. The need for consultation and affirmative resolution will ensure that any future proposal—and, as I have indicated, none is planned—is subjected to rigorous scrutiny and debate. We believe that the greater use of periodical payments will have benefits not only for claimants but also for defendants and their insurers and that the power to vary is a necessary and important part of the new system.
I understand and have listened carefully to the anxieties expressed. I hope that now, as I respond to specific amendments in turn, I shall be able to allay those anxieties to noble Lords' satisfaction. Amendment No. 140C would limit the power to vary to circumstances where the original court order expressly permits it. We intend that the initial order will allow variation only where it is specifically provided for in the court order. This type of detail is more appropriate to the order-making power. We believe that it is unnecessary and unduly restrictive to include such a requirement in primary legislation.
Amendments Nos. 141ZA and 141ZB limit the provisions that may be included by the Lord Chancellor in an order enabling the upward variation of a court order for periodical payments. The limits they would introduce are based on the wording of Section 32A of the Supreme Court Act 1981 relating to the courts' existing power to award provisional damages, but are considerably more restrictive. Section 32A permits provisional damages to be awarded where there is proved or admitted to be a chance that, at some definite or indefinite time in the future, the claimant will develop some serious disease or suffer some serious deterioration in their physical or mental condition as a result of the defendant's act or omission.
The amendments would require proof or admission at the time of the original court order that the disease, deterioration, and, in the case of Amendment No. 141ZB, improvement, would occur.
6.30 p.m.
Lord Goodhart: I must point out that Amendment No. 141ZA states that it has to be proved or admitted in the original hearing that,
"there was a chance that at some definite or indefinite time in the future".
I confess that in my original amendment I left out the words about chance, but it was replaced by the present version, which refers to "a chance" rather than to proof.
Baroness Scotland of Asthal: I am grateful to the noble Lord for his clarification. By restricting the scope of the order to circumstances where it was proved or admitted that the disease, deterioration or improvement in the claimant's condition would definitely occur rather than where there was a chance that it would occur the amendments would prevent our making the initial order in the terms we propose, which go no further than the provisional damages. If the noble Lord seeks to replicate the position in relation to provisional damage there is probably nothing between us.
Restricting the terms of variable periodical payments beyond those governing provisional damages would discourage their use and could force awards to be made by way of lump sums and provisional damages where variable periodical payments were more suitable. That is our worry. By preventing any future orders being made in different terms in the light of experience and future developments in the insurance market, the amendments would undermine the purpose of the order-making power. Not only would they prevent extensions to the scope for variation, they would also prevent any restriction that might be necessary.
Amendment No. 141A proposes the removal of the provision that allows an order for variation made by the Lord Chancellor under Section 2B(1) to have effect irrespective of the original terms and conditions of the court order or agreement. That provision is intended to ensure that the framework for the order-making power is wide enough to capture all possible eventualities for variation. Any such order would of course be subject to consultation and the affirmative resolution of Parliament under the terms of Section 2B(6).
However, I recognise the concern outlined by noble Lords and the noble Baroness, Lady Finlay of Llandaff, about the provision. They fear that it could create unacceptably high levels of uncertainty, and the Government are therefore willing to accept the amendment. I hope that that gives the noble Lord, Lord Goodhart, pleasure.
Amendment No. 141AA removes the provision enabling an order of the Lord Chancellor to make provision of a kind that could be made by civil procedure rules. The provision in the Bill is intended to provide greater flexibility, as it is likely that provisions relating to variation may contain elements of substantive law which would be more appropriate to an order than rules of court. There may also be occasions where it is more efficient to deal with a particular matter

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wholly by order rather than by rules. As noble Lords are aware, rules of court are subject to negative resolution by Parliament. If it is decided to implement any provision by way of an order, it will be subject to consultation and the greater scrutiny of affirmative resolution.
Amendments Nos. 141AB and 141B would prevent an order for variation amending legislation governing provisional damages. Amendment No. 141AB would also prevent an order from applying such legislation. As we intend that the initial order for variation will operate on similar terms to that of provisional damages, it is clearly practical that an order should be able to apply the legislation that governs those damages. There is also the possibility that the courts may wish to award a lump sum by way of provisional damages in conjunction with a variable periodical payments order. If the power to amend provisional damages legislation was removed from the scope of the order-making power, any necessary amendments to ensure that the two regimes could operate in tandem would have to be made through primary legislation instead. That would be extremely cumbersome and inefficient. We believe that the most effective way to achieve compatibility is through the order-making power. That provision has, of course, been considered by the Delegated Powers and Regulatory Reform Committee, which did not consider that the attention of the House needed to be drawn to it.
Amendment No. 141C raises a drafting point. The use of the word "may" in Section 2B(6)(b) is standard drafting and is not permissive but prescriptive. It is used elsewhere in the Bill. The Lord Chancellor will be required to consult before making an order under Section 2B(1). I hope that the noble Lord will agree that the amendment is unnecessary.
The Bill requires the Lord Chancellor to consult,
"such persons as he thinks appropriate".
The noble Lord, Lord Hunt, raised that issue in relation to Amendment No. 141D. He and the noble Lord, Lord Renton, asked about the people whom the Lord Chancellor was likely to consult. Consultation will include—I hesitate to call them the usual suspects—the legal profession, the Association of Personal Injury Lawyers, the Forum of Insurance Lawyers, the insurance industry, the Association of British Insurers, medical defence organisations, the National Health Service Litigation Authority, the judiciary, the Civil Justice Council, disability groups and other government departments. It will be available on the departmental website.
Lord Renton: I am grateful to the noble Baroness for giving way. She has now made it clear that, although it appears to me from the wording of the clause that the Lord Chancellor can require the courts to deal with cases on an individual basis, that is not the intention of it and that, therefore, there is no question of particular cases being dealt with by an order by the Lord Chancellor but merely dealt with by the powers given to the courts.
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That being so, and I suppose I must apologise for thinking that it could be meant the other way. I believe that between now and Report the Government should consider the wording of the clause in case other people imagine—it is quite easy to interpret it as such—that it gives power for action to be taken in individual cases.
Baroness Scotland of Asthal: I hear and accept what the noble Lord says. However, I hope that during these debates in Committee we shall give those who come to construe the Bill in due course the kind of information that will enable them to be clear as to how these matters should properly be read. I hope that that will prove to be of assistance to them.
Amendment No. 141D would replace the words,
"such persons as he thinks appropriate",
with the words,
"as widely as is reasonable in the circumstances".
The wording used in the Bill is not intended to limit the scope of consultation. It will of course be important to seek the views of all those with an interest before any change is made. If Parliament is not satisfied with the degree of consultation in any particular instance, then it will be able to indicate that under the affirmative resolution procedure. Therefore, I believe that Amendment No. 141D adds nothing further to the existing provision.
Amendment No. 141E provides that an order for variation would apply only to claims arising after the date of the commencement of this section. Amendment No. 141EA has a similar effect but limits the application of an order further—that is, to injuries which occur after the date of commencement. Although I recognise the general concerns of defendants and insurers on the "retrospective" effect of legislative change, the initial order will be no more than is provided for under the current system of provisional damages. I understand that those damages cause no difficulty at present.
In those circumstances, where it is known that there is a chance of medical deterioration in the future, compensation is now paid, one way or another, either as provisional damages or built into the award as a contingency payment. As I explained, this latter practice may well lead to overcompensation overall while leaving some people who need it undercompensated. Where the court makes a variable periodical payment order, insurers should be able to reserve or reinsure against that, as they do now with provisional damages orders.
If the provisions relating to the court's power to vary periodical payments applied only to claims arising or injuries occurring after the date of commencement, it could be several years before the provisions took effect. In the meantime, awards would continue to have to include provision for events which might never occur in cases where a variable order might be more appropriate. The precise transitional arrangements for the provisions regarding periodical payments have yet to be settled.
However, I can say now that the relevant clauses of the Bill will not apply to claims concluded by its implementation date. I hope that that statement will

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give the noble Lord, Lord Hunt, the clarity and assurance that he needs in relation to this difficult and, I accept, testing issue.
While I understand the need for suitable insurance products to fund variable periodical payments, it is not practical to require the Lord Chancellor to be satisfied with all the arrangements that might be put forward by defendants before the provisions come into effect, as Amendment No. 148A would require. Under the intended terms of the initial order, the possibility of variation will be known at the time of the original court order. As I have said, insurers should be able to reserve or reinsure against that.
In addition, the court will have to be satisfied before making a periodical payments order that the continuity of the payments is reasonably secure. It would be open to the defendant to inform the court if the terms of an order would cause particular difficulties. In the event that a second order under the order-making power was considered, the need for different funding options would undoubtedly be taken into account and consulted upon. I therefore invite noble Lords not to press those amendments.
I have tried to answer comprehensively, because these are difficult issues. There has been a lot of worry and concern among all parties about how they will operate, but I hope that there is now sufficient clarity for noble Lords to be comfortable that these are sound provisions that they can support.
6.45 p.m.
Lord Goodhart: I am obviously grateful to the Government for accepting Amendment No. 141A. We shall have to return to Amendments Nos. 141ZA and 141B, together with other amendments in the name of the noble Lord, Lord Hunt, no doubt, because there is still some difference of opinion between us. I am particularly concerned that it is desirable in everybody's interests that the restrictions on the making of orders should be parallel with those in relation to provisional damages and that that should be on the face of the Bill.
Lord Hunt of Wirral: This has been a very important debate. We have spent over an hour productively. There have been some very important speeches. I congratulate the noble Baroness, Lady Finlay, on her moving account of the serious problems that could be caused to rehabilitation. She gave us a practical insight into some of those difficulties. With great experience behind her words, that was of great benefit to the Committee. I congratulate the noble Lord, Lord Goodhart, on his points. If he had not tabled the amendment to delete subsection (4), I would have done so. I therefore share his delight about the Minister's agreement to delete that subsection, although the noble Lord must take the credit.
My noble friend Lord Renton made an important point, although it was helpful to have the contribution of the noble and learned Lord, Lord Donaldson, to put it in context. We shall have to consider further the
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point raised by my noble friend. On the face of it, his interpretation of events looks reasonable, but I take the point of the noble and learned Lord, Lord Donaldson, that that may not be the effect and we must look at the issue further. I thank my noble friend for his comments.
I praise the noble Baroness, who has given the Committee a meticulous and reassuring response. As she knows, there have been some serious concerns. Her statement in summing up this wide-ranging debate will give comfort to those who have had serious cause for concern. She did not answer all the points, but I welcome the wording that she has used, in particular the adoption of a cautious approach to variation, the circumstances that she has clearly set out and the way in which she has made clear that the relevant clauses will not apply to claims concluded by the implementation date of the Bill. That series of matters is of enormous importance. We must now take time to examine carefully what the noble Baroness has said. I believe that I could summarise by saying that she has done much to reassure those who had cause for concern. It is now our task to set her words against the terminology of the Bill to ensure that it has the effect she seeks.
Sadly, rising stars do not stay in the same place for very long. I am sure that the noble Baroness, when she looks down on us from a new Cabinet position in the short time—I suppose I must say—left for the Government, she will understand that we must make sure that the legislation will apply to her successor of whichever colour. It may well occur that her successor does not share her views that it should be as restricted as she has announced, particularly in later form. I hope she will now give us an opportunity to think carefully about what she has said this evening, but we thank her for her reassuring words. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 140A not moved.]
[Amendment No. 140B had been withdrawn from the Marshalled List.]
[Amendment No. 140C not moved.]
[Amendment No. 141 had been withdrawn from the Marshalled List.]
[Amendments Nos. 141ZA and 141ZB not moved.]
Lord Goodhart Lord Goodhart moved Amendment No. 141A:
Page 46, leave out lines 17 and 18.
On Question, amendment agreed to.
[Amendments Nos. 141AA to 141EA not moved.]
Baroness Scotland of Asthal Baroness Scotland of Asthal moved Amendment No. 141F:
Page 47, line 12, after "court" insert "in so far as it is"
The noble Baroness said: My Lords, in moving the amendment, I shall speak also to the other amendments in the group. It is intended that the Bill should maintain the present position that periodical payments in respect of personal injury are exempt from income tax. The amendments ensure that the provisions of Clause 92 accurately achieve this.
Amendments Nos. 141F, 141G, 141H and 141K clarify that the tax exemption for periodical payments paid in respect of personal injuries does not extend to other types of damages.
Amendments Nos. 141J, 141L and 141M clarify that periodical payments made by the Motor Insurers' Bureau, which compensates the victims of uninsured and untraced drivers, are tax exempt.
Amendments Nos. 141P, 141Q and 141R reflect these changes in the definition of "periodical payments" in Clause 93. They appear on the Marshalled List under Clause 92, but that should be Clause 93.
Amendments Nos. 141N and 153 remove subsection (8) from Section 329AA of the Income and Corporation Taxes Act 1988, because the terms it applies no longer appear in the section as amended. I beg to move.
On Question, amendment agreed to.
Baroness Scotland of Asthal Baroness Scotland of Asthal moved Amendments Nos. 141G to 141N:
Page 47, line 13, at end insert ", or"
Page 47, line 14, leave out "settling" and insert "in so far as it settles"
Page 47, line 16, leave out from "varied)," to end of line 22.
Page 47, line 26, leave out "and" and insert—

"(ba) in subsection (6) after "claim or action for" insert "damages in respect of,"

Page 47, line 32, leave out "and"
Page 47, line 36, at end insert—
", and

(c) the reference to an agreement in so far as it settles a claim or action for damages in respect of personal injury also includes a reference to an undertaking given by the Motor Insurers' Bureau (being the company of that name incorporated on 14th June 1946 under the Companies Act 1929), or an Article 75 insurer under the Bureau's Articles of Association, in relation to a claim or action in respect of personal injury.""

Page 47, line 36, at end insert—
", and.

(d) omit subsection (8)."

On Question, amendments agreed to.
Clause 92, as amended, agreed to.
Clause 93 [Periodical payments: security]:
Baroness Scotland of Asthal Baroness Scotland of Asthal moved Amendments Nos. 141P to 141S:
Page 48, line 34, after "court" insert "in so far as it is"
Page 48, line 35, at end insert ", or"
Page 48, line 36, leave out "settling" and insert "in so far as it settles"
Page 48, line 37, leave out from "varied)," to end of line 42 and insert—

"(6) In subsection (5)(b) the reference to an agreement in so far as it settles a claim or action for damages in respect of personal injury includes a reference to an undertaking given by the Motor Insurers' Bureau (being the company of that name incorporated on 14th June 1946 under the Companies Act 1929), or an Article 75 insurer under the Bureau's Articles of Association, in relation to a claim or action in respect of personal injury.""

On Question, amendments agreed to.
Clause 93, as amended, agreed to.
Clause 94 [Power to alter judicial titles: Northern Ireland]:
[Amendment No. 142 not moved.]
Clause 94 agreed to.
Baroness Scotland of Asthal Baroness Scotland of Asthal moved Amendment No. 142A:
After Clause 95, insert the following new clause—
"ALTERATION OF PLACE FIXED FOR CROWN COURT TRIAL: NORTHERN IRELAND
An application under section 48(3) of the 1978 Act (application for variation of place fixed for Crown Court trial) is no longer required to be heard in open court; and accordingly section 48(4) of the 1978 Act ceases to have effect."
On Question, amendment agreed to.
Clause 96 agreed to.
Clause 97 [Rules, regulations and orders]:
[Amendment No. 143 not moved.]
Baroness Anelay of St Johns Baroness Anelay of St Johns moved Amendment No. 144:
Page 52, line 1, after "made" insert "under section 31(4) which contains provision of the type specified in section 31(5) or"
The noble Baroness said: I hate to spoil the party after such a long run of amendments not moved or formally moved. I shall speak to an amendment for a change. Earlier in the Bill, some weeks ago, we debated the pilot schemes for fines enforcement that will be launched under Clause 31 and Schedule 2. Orders made under Clause 31(4) allow pilot schemes to be introduced in particular areas and, in relation to those areas, may modify Schedule 2 or any enactment in connection with its operation.
When the Select Committee on Delegated Powers and Regulatory Reform considered the matter, it said that it would accept that delegation was appropriate as would be the negative procedure. But it said that that would be in the context of Parliament approving the idea of pilot schemes as proposed in the Bill. The difficulty is that, when we debated those matters some weeks ago, noble Lords demonstrated significant concerns about the operation of the new pilot scheme. We share the Government's objective of trying to ensure that fines collection is far more effective and efficient than at present. But considerable concerns were expressed about the manner in which the Government intend that the new scheme should come into operation.
So the reason for tabling the amendment is to ask the Minister whether she has taken the opportunity in the intervening weeks since our last debate to reflect further on whether the negative procedure might be appropriate in this matter, and, if she has so reflected, to share her conclusions with the Committee. If she has not had the opportunity so to consider, will she undertake to do so before we reach the matter, as we surely shall, on Report? I beg to move.
7 p.m.
Lord Bassam of Brighton: As the noble Baroness explained in moving the amendment, it would make a modification to ensure that pilot schemes were subject to the affirmative resolution procedure.
We have given the matter careful thought, and we fully understand the interest in the details of the proposed arrangements that prompted the amendment. The enforcement measures are a radical departure from existing practice, and the Government believe that they should be thoroughly tested before implementation. There would be little merit in piloting the measures unless it were possible to change or even abandon elements of the package that did not work as intended. Pilots will be carried out immediately following Royal Assent, during late 2003 or early 2004, with the aim of introducing the fines collection scheme as soon as possible following evaluation.
The pilots will allow different elements of the scheme to be tested in different areas so that their effectiveness in improving the payment rate can be evaluated. For example, a discount for prompt payment and/or an increase for default may be piloted in one area; wheel clamping or registration of the debt as sanctions for defaulters may be piloted in another.
As the Bill stands, the Lord Chancellor may, once the pilot schemes have been evaluated, make an order under Clause 31(8) modifying Schedule 2 and associated legislation in the light of experience of the pilots. That final package, which may still be the whole scheme as presently envisaged or a modified scheme, would then be put to Parliament for approval under the affirmative resolution procedure before being rolled out nationally. That approach will enable the Government to bring forward a package of tried and tested measures that, we can be sure, will deliver the improvements in performance that the Committee will want to see.
Amendment No. 144 would make the piloting of the schemes, details such as which parts of the scheme were to be piloted in which area and any temporary change to enactments to allow the pilots to take place subject to affirmative resolution. The Select Committee on Delegated Powers and Regulatory Reform found that the power as a negative resolution had been appropriately delegated.
The final package will be subject to the affirmative resolution procedure, and that provides the necessary flexibility. I repeat that the Select Committee found that, in this instance, the negative resolution procedure was as appropriately delegated. We are not providing a blank cheque, and there is an opportunity to have a full and detailed debate on the details of the final scheme. We think that we have covered the concerns that the noble Baroness understandably raised in moving the amendment.
Baroness Anelay of St Johns: I am grateful to the Minister for that explanation. It goes further than was possible when we covered the matters in a grouping on the operation of the pilot schemes.
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I remind the Minister that the Select Committee put its approbation of the negative procedure in the context that it applied only if Parliament approved the pilot scheme, which we have not yet done. That is why I do not wish to take the matter further, even if I disagreed wholly with the Minister, which I do not.
I shall consider the Minister's explanation in the light of the discussions we shall have on Report. At this stage, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Anelay of St Johns Baroness Anelay of St Johns moved Amendment No. 144A:
Page 52, line 2, after "officers)" insert ", section 68 (power to amend legislation in connection with Criminal Procedure Rules) or section 75 (power to amend legislation in connection with Family Procedure Rules)"
The noble Baroness said: In moving Amendment No. 144A, I shall speak to Amendment No. 145. Clauses 68 and 75 contain powers for the Government to amend legislation in connection with criminal and family rules respectively. At the moment, they are subject only to the negative resolution procedure. Our view is that that is inadequate, and the Select Committee on Delegated Powers and Regulatory Reform agreed with that view in its second report, dated 11th December, 2002.
I simply tabled Amendment No. 144A in order to ask the Government when they intend meeting the commitment that they have already given on this matter to the Delegated Powers and Regulatory Reform Committee—in their response to the Committee's report on the Bill at Annex 2 of the seventh report of the Committee—and the commitment given by the Minister on 11th February at col. 658.
After hearing the commitment made by the Minister on that date, I eagerly awaited sight of a government amendment. However, naturally patient as I am in all matters, last week I gave up on patience and tabled my amendment.
Earlier today the Minister was gracious enough to accept another amendment. I live in hope that she might accept this one. However, if she is unable to do so, I should love to know why the drafting is wrong and why the Government are to table an amendment at a later stage—or, indeed, if they will bring one forward.
I shall speak briefly also to Amendment No. 145, grouped with Amendment No. 144A. I tabled this amendment in response to paragraph 17 of the Select Committee's report. We have debated at length the Government's plans to divide England and Wales into administrative areas to be known as local justice areas. That is dealt with in Clause 8.
Clause 97(4)(a) states that the first order under Clause 8 shall be laid before Parliament only. In other words, it is not subject to the affirmative or, indeed, the negative procedure. Subsequent orders under Clause 8 will be subject to the negative procedure, as set out in Clause 97(5). The reason for the Government doing that is that the first order,
"will simply be renaming petty sessions areas as local justice areas and will not change any boundaries".

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But, as the Committee points out, the power to make the first order is not limited in this way. The Committee goes on to state that it considers that unless it is so limited, there is no reason why the first order should not he subject to the same procedure as subsequent ones. I agree on that matter too. It is another case in which it is to be hoped that the Minister will say that she will accept the amendment or, indeed, return with a better drafted amendment. But how on earth one could draft something better than leaving out paragraph (a), I shall live and learn! I beg to move.
Lord Goodhart: Amendment No. 146 standing in the name of my noble friend Lord Thomas of Gresford and myself is also in this group. It deals with the statutory instruments made for the purpose of changing court fees. The existing position is that an order to vary fees must be laid before Parliament. It is not subject to any parliamentary scrutiny and it cannot be prayed against.
Clause 87, taken together with Clause 97(4) would keep the existing position. The Delegated Powers and Regulatory Reform Committee criticised this and recommended that a fees order should be subject to the negative procedure and so could be prayed against. In response to the Committee, the noble and learned Lord the Lord Chancellor said in his letter:
"The Committee was also concerned about the scrutiny afforded to Clause 87. allowing the Lord Chancellor to set fees by order. I have carefully considered the views of the Committee and agree that it would he preferable that this clause be subject to negative resolution".
This amendment does exactly that. It takes the order under Clause 87 out of the list of orders referred to in Clause 97(4) which lists those amendments which are not subject to parliamentary procedure.
Orders relating to fees under Clause 87 would then fall to be covered by Clause 97(5) which applies the negative resolution procedure to all statutory instruments not otherwise dealt with. As the Government have not put down their own amendment I hope that they will accept ours. I, too, support the noble Baroness, Lady Anelay, in her Amendments Nos. 144A and 145.
Lord Bassam of Brighton: I think that I shall make noble Lords happier, though I feel rather mean because I believe that my noble friend Lady Scotland should be doing so having toiled as long as she has today.
I shall work through each of the amendments in turn. Amendment No. 144A is similar to an amendment tabled earlier in Committee. On that occasion, I said to the noble Lord, Lord Goodhart—at col. 658 of the Official Report of 11th February 2003—that it was the Government's intention to follow the recommendation of the Select Committee on Delegated Powers and Regulatory Reform with regard to Clauses 68 and 75.
The Select Committee on Delegated Powers and Regulatory Reform reported that it was not satisfied that the Government had made the case for the negative
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resolution procedure in those clauses. As a consequence, in January the Lord Chancellor responded to the noble Lord, Lord Dahrendorf, stating that he accepted the recommendation and would consider an appropriate amendment to the clause.
I want to reassure noble Lords once again that this remains the Government's intention. We shall bring forward an amendment to the Bill on Report addressing the issue. The amendment will provide that any order made under these clauses to amend or repeal primary legislation would be subject to the affirmative resolution procedure. I hope that the noble Baroness will feel able to withdraw her amendment.
The effect of Amendment No. 145 would be to make the first order made under Clause 8 setting up local justice areas subject to the negative resolution procedure. We are grateful to noble Lords for raising the matter. If the amendment has been prompted by concerns that the Lord Chancellor would radically alter local boundaries when making the first order under Clause 8, then the amendment is unnecessary. I can assure noble Lords once again that the boundaries of local justice areas will be the same as those of petty session areas when the new arrangements set out in the Bill come into operation.
As I said during our debate on Amendment No. 35, we shall spell this out in the transitional provisions of the Bill to be introduced as a government amendment. Current petty session area boundaries are of course subject to changes made by magistrates' courts committees using the existing procedures. In our view it is not necessary to make the first order under Clause 8 subject to any parliamentary procedure.
Finally, I turn to Amendment No. 146. Its effect would be to make orders under Clause 87 subject to the negative resolution procedure. The current, separate fee-setting powers for each of the three tiers of courts are not subject to parliamentary scrutiny and Clause 87 sought to replicate that position. However, following the reports of the Select Committee on Delegated Powers and Regulatory Reform and the Human Rights Select Committee, along with the views wisely expressed by the noble Lord, Lord Goodhart, in his remarks at Second Reading, the Lord Chancellor has considered the matter again and has determined that it would be preferable if this clause was subject to the negative resolution procedure.
While the Government agree with the principle behind the noble Lord's amendment, I am afraid that, as currently drafted, it is technically deficient. On page 52 of the Bill, the word "or" should be inserted at the end of line 6, while the word "or" should be deleted at the end of line 8, in addition to the noble Lord's proposal to omit paragraph (c) in line 9.
I can confirm that the Government intend to bring forward an amendment on Report to achieve the same effect and I therefore invite the noble Lord not to press his amendment.
Baroness Anelay of St Johns: We wait with bated breath to see what superior drafting the Government bring forward, but we welcome the commitments just

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made by the Minister. However, I am little concerned with regard to his response to Amendment No. 145 when he spoke of the government amendment being part of a package of transitional provisions. Naturally we shall want to look at that to ensure that it properly covers the point. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 145 and 146 not moved.]
Clause 97 agreed to.
Clause 98 [Minor and consequential amendments, repeals, etc.]:
Baroness Anelay of St Johns Baroness Anelay of St Johns moved Amendment No. 147:
Page 52, line 31, at end insert—
"( ) An order under subsection (3) shall not be made until a draft has been laid before both Houses of Parliament and approved by a resolution of each House."
The noble Baroness said: In moving the amendment, I shall, with the leave of the Committee, speak to Amendment No. 148 and also to Clause 98 stand part. I appreciate that I shall take a little longer than is usually the case when moving amendments, but I thought it appropriate to group these together and, it is hoped, knock the matter on the head today rather than take up time on Report. I hope to reach a position where I shall not need to return to this matter at the next stage.
I tabled Amendment No. 147 because I was concerned that the Government thought that the negative procedure would be appropriate for future amendments to primary legislation in connection with the Bill. It is important that changes to primary legislation are made by affirmative order. I have raised these matters in the presence of the noble Lord, Lord Bassam, during our previous debates on the Crime (International Co-operation) Bill. I have not done so within the context of this Bill.
The Delegated Powers and Regulatory Reform Committee points out that Clause 98 enables the Lord Chancellor to lay orders to make any supplementary, incidental or consequential provision and any transitory, transitional or saving provision which he believes is necessary or expedient for the purposes of, in consequence of, or for giving full effect to any provision of the Bill. That includes the power to amend or repeal primary legislation. But these orders are only subject to the negative procedure. So the committee's conclusion is that in view of the fact that orders under that section may amend or repeal primary legislation, the Committee may wish to consider whether the negative procedure under this section is justified.
I have concerns overall about Henry VIII clauses. I was very intrigued to note the suggestion of the chairman of the Select Committee, the noble Lord, Lord Dahrendorf, in the debate on 14th January. He spoke not as chairman, but as an individual giving his personal views. He said that the debate on these matters,
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"goes right to the heart of the key constitutional question of the limits of executive power, and of the ability as well as the duty of Parliament to prevent the unchecked extension of these limits"".—[Official Report, 14/1/03; col. 165.]
He went on to raise the question of whether there should be sunset clauses on such matters.
My questions relate to issues which arose from that debate. I begin with the last first, which is the matter of sunset clauses. I appreciate that the delegated powers committee has a further special report on such clauses, which would be valuable. I ask the Minister to undertake that the Lord Chancellor's Department reviews very carefully the use of sunset clauses and how it might concentrate the minds of Ministers as regards the proper drafting of Bills. As ever, I do not point the finger of blame at those who physically draft the Bills. They are at the mercy of Ministers who change their minds at the last minute, sometimes with good reason, but sometimes not. Has the Lord Chancellor's Department any intention to review the possible good uses of sunset clauses?
I have two specific questions which relate to the issues raised by the scrutiny committee. The first is as regards the presumption in favour of the affirmative procedure. The committee recommended this. As regards this Bill, it said at that stage that if the Government choose the negative procedure they should give their reasons in full before departing from the affirmative procedure and the Explanatory Notes. Why should these notes precede the comments of a Select Committee?
The question is whether in future the Lord Chancellor's Department will be of good behaviour or be bound over, so to speak. However, I understand now from Europe that we are not allowed to say that. I shall be a recidivist and keep to the old wording for the time being. Could the Government give an assurance that the LCD will follow the committee's recommendation on that matter?
As regards the wording of such clauses, the committee accepted that they could not always follow a standard form, but it was persuaded that when the Government drafted the Explanatory Notes they should offer an explanation of the reasons why a particular form of wording has been used in each case for a Henry VIII clause. Will the Lord Chancellor's Department follow that procedure in future if there is another blockbuster Bill or a teeny-weeny one? I hope that it is going to follow good practice on that. I beg to move.
Lord Bassam of Brighton: We are grateful to the noble Baroness for tabling this amendment, which raises wider issues surrounding delegated powers contained in legislation of which the Government are well aware. The Government are keen to take seriously the views of all those with an interest in powers of this nature, particularly those of the Delegated Powers and Regulatory Reform Committee. Indeed, the report of the noble Lord, Lord Dahrendorf, published on 11th December last year was welcomed by the Lord Chancellor in his letter of 6th January. We agreed to address all of the committee's concerns. We have given

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that undertaking. As I am sure the Committee is aware, the Delegated Powers and Regulatory Reform Committee, in its special report on delegated powers, recommended a,
"presumption in favour of the affirmative procedure",
for such powers. My noble and learned friend Lord Williams, in response to the report, expressed the view that each case should be looked at individually; and, in this case, we agree that amendments to primary legislation should be subject to the affirmative procedure. To this end, we intend to bring forward a government amendment which will subject all orders by the Lord Chancellor amending primary legislation under Clause 98 to the affirmative resolution procedure. It would clearly not be sensible to subject amendments to statutory instruments to the affirmative resolution procedure. I am sure that that is not the intention of the noble Baroness, although it would be the result were the amendment to be accepted.
Amendment No. 148 proposes that orders made by the Lord Chancellor for supplementary, consequential and transitional provisions be limited to a period of three years following the passing of the Act.
I do not think that we can be quite so accommodating on this amendment as on the previous one. The provision under Clause 98, as I am sure the noble Baroness will be aware, is necessary for a number of reasons. Given the scale of the consequential amendments necessitated by the Bill, we believe that a clause of this nature is unavoidable. It is impossible to know which other Bills in the current parliamentary Session will receive Royal Assent before the Courts Bill. This could mean that Bills containing, for example, references to petty sessions areas could be enacted before provisions in the Courts Bill, requiring a consequential amendment.
We believe, therefore, that imposing an arbitrary time limit on this provision could impair the effectiveness of the Bill. It is, unfortunately, impossible to ensure that all references to petty sessions areas, for example, are dealt with before the expiry of, say, a three-year period. Noble Lords may be amazed to learn that we have identified some 1,025 different references to petty sessions in primary and secondary legislation, all of which would need to be dealt with, whether by the Bill or by orders made under it. It is not simply a matter of substituting one phrase for another in every case. Some legislation dates back to the 19th century and is not easy to amend. As your Lordships can imagine, guaranteeing that we covered every single reference would be something of a major exercise, and, were one to be identified at a later stage, the amendment would mean that a suitable opportunity would have to be found to amend the relevant statute by primary legislation.
I would, however, like to reassure the noble Baroness that the scope of this order-making power is limited and will be used only to make minor supplementary, incidental or consequential amendments or transitional provisions. It is our intention to be specific in using the power. It would not be possible for an order made under this clause to make amendments to legislation introducing new policy.
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In addition, as it is our intention to make orders which amend primary legislation subject to the affirmative resolution procedure, this House will have the opportunity to debate any such amendments whenever made. I hope that that reassurance and the explanation I have given go some way towards satisfying the noble Baroness and that she will feel able to withdraw the amendment.
The noble Baroness asked whether the Lord Chancellor would keep these matters under review. Yes, of course, the Lord Chancellor will keep all the matters relating to sunset clauses and so on under very careful review.
Baroness Anelay of St Johns: I am grateful to the Minister for his helpful and thorough response. I, too, shall keep matters under review, in particular as regards good behaviour on what should or should not appear in the Explanatory Notes.
I am grateful to the Minister for telling us about the scale of consequential amendments necessitated by the Bill. It chills the heart and numbs the brain to think of the numbers that he has thrown at us. How I look forward to them! I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 148 to 148A not moved.]
Clause 98 agreed to.
Schedule 6 [Minor and consequential amendments]:
Lord Donaldson of Lymington Lord Donaldson of Lymington moved Amendment No. 149:
Page 104, line 19, at end insert—
"Judicial Pensions and Retirement Act 1993 (c. 8)
In section 26 (7) (retirement date for holders of certain judicial offices etc.)—

(a) at the end of paragraph (a), insert the words "or a person who has been a Lord of Appeal in Ordinary or a judge of the Court of Appeal";

(b) at the end of paragraph (b), insert the words "or a person who has been a Lord of Appeal in Ordinary or a judge of the Court of Appeal"; and

(c) at the end of paragraph (c), insert the words "unless he is a person who has been a judge of the Court of Appeal"."

The noble and learned Lord said: There have been many times when I wondered whether this day would ever come. The provision was the last amendment. It has been overtaken by some later amendments. But the day has now come and I am very happy to move the amendment.
Let me clarify that where the amendment states,
"In section 26(7) (retirement date for holders of certain judicial offices etc.)",
we are not concerned with retirement dates but 'with "etc". Section 26(7) of the Judicial Pensions and Retirement Act 1993 states:
"After the day on which a person attains the age of 75, he shall not hold any relevant office nor shall he—

(a) be a member of the Judicial Committee of the Privy Council…

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(b) participate in the hearing and determination of any appeal, or any petition for leave to appeal, to the House of Lords, unless he is the Lord Chancellor;

(c) act as a judge under or by virtue of section 9(1) of the Supreme Court Act 1981".

My amendment does not affect the question of whether anyone shall continue to hold a relevant office after the age of 75 because it refers throughout to former holders of office.
So when one strips it down, one comes to this position: if the amendment is agreed, we shall restore the position to that which existed when I ceased to be Master of the Rolls in 1992 whereby, when pressed for judicial manpower, it is open to the Master of the Rolls to invite those who have retired, usually recently retired or who have been appearing recently as members of the court, to assist on a daily basis.
The great saving grace of that system was that particular retired lords justices could not arrive suddenly and say, "Now I should like to sit" if the Master of the Rolls had grave doubts about whether age had overtaken their usual faculties. So there was no problem about that. In my experience I thought it right—no one has ever suggested that I was wrong in this respect at least—to invite Sir John Megaw and Sir David Cairns to sit from time to time, often at very short notice (a matter of hours) in the Court of Appeal. I gave up inviting them when they each reached the age of 84, not because they were not as bright as buttons (if I may use the expression) but because they themselves felt that perhaps the age of 84 might create some criticism if anyone ever discovered it. No one ever did discover it because it was certainly not apparent from the way in which they framed judgments and so on. That is what I suggest, but it is a matter not for me but for the Master of the Rolls, the noble and learned Lord, Lord Phillips. When I spoke to him on this matter, he said that he was in favour, as he is very pressed indeed.
I hope that the amendment commends itself to the Minister. I should make it clear that, prima facie, I have a considerable interest in this matter because it would enable me to sit as a member of the judicial member of the Privy Council and as a Member of this House judicially, which I have never done. I could also go back to the Court of Appeal. However, let me make it clear that wild horses—including the Master of the Rolls—will not drag me back. When one has not done that kind of thing for 10 years, the strain of doing it again would be overwhelming. The amendment intends to enable those who have recently retired to be brought in and to help out. If they have kept their skill up, those of a considerably greater age might be invited to come back. But that is a matter for the Master of the Rolls, not for me.
Having declared my interest and negatived that interest, I beg to move.
7.30 p.m.
Lord Borrie: I commend the noble and learned Lord for introducing the amendment. It is not surprising that a number of people in this House are not keen on compulsory retirement ages. I commend the noble and
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learned Lord for striking a blow at compulsory retirement ages. For example, the age of 60 for civil servants is absurdly young.
On the other hand, of course—and I am sure that the noble and learned Lord will agree with me, although I have not discussed it with him—there is a particular justification for a compulsory retirement age for High Court judges.
Lord Donaldson of Lymington: I did, I hope, make it clear that I was not striking blows in relation to retirement ages. I referred only to post-retirement.
Lord Borrie: I am not sure that I have fully understood the difference. If the noble and learned Lord intervenes in the course of my remarks, I shall happily give way to him.
I believe that he will agree with me that there is a particular justification for the existence of a compulsory retirement age for High Court judges, which has existed since 1959. They enjoy a substantial security of tenure, which is justified in its turn by the constitutional imperative to ensure the independence of the judiciary. High Court judges, as all your Lordships know, may be dismissed only by a vote of both Houses.
The difficulty before a compulsory retirement age was introduced was that, inevitably, some judges who did not appreciate their declining abilities stayed in their posts for too long. Professor Robert Stevens was, until recently, the Master of Pembroke College, Oxford. After delving into the records of the Lord Chancellor's Department, he wrote of the very great difficulties that successive Lord Chancellors and their Permanent Secretaries have had when struggling to ease out judges who were past their prime.
The late Lord Denning referred in his memoirs to a High Court judge in the 1950s who was strongly criticised by the Court of Appeal for his unusually extensive questioning of counsel. The then Lord Chancellor arranged for the judge to continue to sit for a little while and then to resign, which he did a few months later.
The extension of the service of a judge for a certain period, after the compulsory retirement age of 70, depends no doubt on careful consideration by the Lord Chancellor's Department in consultation with senior judges. If a judge is asked to continue to sit as a judge until he is, let us say, 75, his sitting does not depend on the decision of the judge himself; it is of course a request that is periodically renewed by the Lord Chancellor's Department.
However—I mention this because it was the view of the Peel Commission, in 1936—there is at least a theoretical risk that the power to extend a judge's judicial life may be used as a means of control over judges. He will get the opportunity, he may think, to continue to be asked to sit only if he acts in a way that he thinks the authorities would approve of. In 1936, the Peel Commission—on which some distinguished judges sat; it was chaired by a former member of the

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Cabinet, who I think was the first Earl Peel—thought that any such power to give a conditional extension to a judge's judicial life was undesirable.
Unfortunately, the noble Lord, Lord Lester of Herne Hill, is not in his place. I have not discussed it with him. but he might say that the European Convention on Human Rights is not being complied with if judges can continue to sit on the say-so of the Lord Chancellor's Department or of particular heads of particular courts. That service can, of course, be discontinued. I have great sympathy with the flexibility of Amendment No. 149, but I wonder how it would fit with the European Convention on Human Rights.
Although the noble and learned Lord himself referred principally to the example of the Master of the Rolls—a position which he held, as we all know—asking judges to continue to sit from time to time, his amendment is much wider than that and refers to other courts including, as he himself mentioned, the Judicial Committee of the Privy Council. I myself see no reason why a judge beyond the age of 75—into his eighties, if you like—may not be perfectly fit. But I am not sure that I like the idea of judges being allowed to sit only on the say-so of senior judges or the Lord Chancellor's Department. I am not sure that I see that as fitting in with the principle of an independent judiciary.
Lord Donaldson of Lymington: Perhaps the noble Lord will accept it from me, first, as I said, that this amendment has nothing whatever to do with retirement; and, secondly, that the retirement age is not 70 for a large number of judges. Anyone appointed after 1993, I suppose—I forget the exact date—is subject to 70. Up to that date, the age is 75. As for the noble Lord's idea that any sort of pressure would be exerted on a retired Lord Justice because of the possibility that the Master of the Rolls might not wish to ask him back to the Court of Appeal, all I can say is that he can never have met them.
Lord Borrie: Of course the noble and learned Lord is absolutely right. However, it is a matter of perception. I can assure him that the Peel Commission, in the 1930s, was worried about that risk. He may also think that the European Convention on Human Rights is somewhat concerning in this respect.
Baroness Anelay of St Johns: The noble and learned Lord, Lord Donaldson, has instigated a very interesting debate. I am much struck by his argument that flexibility may be needed to call upon those who have great experience, and to do so at fairly short notice. However, there is a question that I must put to the Minister. If the Government feel that they cannot accede to the request of the noble and learned Lord—if so, we would be interested to hear their reason—can they give an assurance that sufficient numbers of the judiciary will be able to perform the necessary tasks? I note that there was recently a statutory instrument from the Lord Chancellor's Department to increase the number of judges by two. In response to my noble friend Lady Seccombe, the reason given concerned the huge
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increase in judicial review appeals regarding asylum. One can see greater volume arising in that way, so there may need to be not only greater flexibility but more full-time appointments. If the Minister cannot accede to the noble and learned Lord's request, one hopes that she will be able to assure the House that there will be sufficient numbers of the judiciary to perform the appropriate work.
I end by wishing the noble Lord, Lord Borrie, a happy 72nd birthday this month—proving the noble and learned Lord's point that 70 is no bar to effective service.
Lord Goodhart: My Lords, I have some sympathy with the amendment. One of the greatest 20th-century judges in the common law world, Oliver Wendell Holmes, was not appointed to the American Supreme Court until he was in his 60s. He continued to sit with no loss of skill until he was past 90. So there are cases where persons of advanced age can continue to add to the court.
I take the point of the noble Lord, Lord Borrie, about the International Convention on Human Rights, but it has not been suggested that the present system—by which former judges can be called upon to sit between their retirement age and 75—contravenes the convention. I imagine that is because the selection of panel members is in the hands of other judges, not of the Lord Chancellor or the Lord Chancellor's Department.
Baroness Scotland of Asthal: My Lords, this has been an enlightening debate. I hope that your Lordships will not think that I am burdened by youth when I comment that having witnessed the performance of the noble Lord, Lord Renton, this evening, anyone who claims that one reaches one's prime before the age of 92, 93 or 94 might be much mistaken.
I understand entirely the purpose of the amendment so eloquently moved by the noble and learned Lord, who is right that the facility to invite skilled judges to sit when the need arises was much taken advantage of before 1993. I am not surprised by the noble and learned Lord's comments in relation to the acceptance by the current Master of the Rolls that it might be a tempting consideration.
I assure the noble Baroness that there are sufficient judges to meet current needs—and the Lord Chancellor, as already demonstrated by a recent order, will take steps to enhance their number if further needs are identified. The Court of Appeal has made significant improvements in minimising delay and the momentum is being maintained through continued skilled management.
I recognise the noble and learned Lord's concerns in seeking to exempt former Lords of Appeal and Court of Appeal judges. I am also conscious that in passing the 1993 Act, Parliament sought to strike a delicate balance in sensitive constitutional territory. Earlier decisions may need reappraisal in light of developments. Your Lordships will know that a European Council directive establishing a general framework for equal treatment in

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employment and occupation in terms that, it is believed, encompass the judiciary includes provisions to prevent discrimination on the basis of age. Domestic implementation is required by 2006 and careful consideration will be given to how the age provisions are to be implemented. The continuing relevance of the retirement regime established by the 1993 Act will form part of that consideration.
I believe therefore that it will be preferable to address age-related restrictions as a single exercise rather than through piecemeal changes to existing arrangements. Of course I bear in mind the historical references made by my noble friend Lord Borrie; the importance of preservation of independence and the need to give certainty. Those issues will have to be taken into account when these matters are reconsidered.
There is no way to diminish the qualities that continue to be displayed in abundance, as on this occasion, by the noble and learned Lord, Lord Donaldson, and other noble Lords who left the 75-year mark behind a little time ago. I endorse everything the noble Baroness, Lady Anelay, said about the performance of my noble friend Lord Borrie. He is a mere youth and there is much to expect from him, as indeed there is from the noble Baroness, Lady Seccombe, whom I see in her place. I had the great pleasure of telling her earlier how surprised I was when she said that she is now a retired magistrate. I rightly expressed my disbelief that that could be so.
I hope that the noble and learned Lord will withdraw his amendment. He has had to wait a long time. This issue should and could be looked at again before 2006 when we come to consider the implementation of the directive.
7.45 p.m.
Lord Donaldson of Lymington: Once again kind flattery by the Minister gets me nowhere. In 1993 ageism was on the ascendant. The position is entirely changed now. It is ridiculous to say, "Oh well, this is piecemeal. We have to look at it all in the light of a European directive". What does it have to do with Europe? It is our judicial system. The Master of the Rolls says that he wants to do this and I have no reason to doubt him. I do not want anyone to be misled by the Minister's perfectly bona fide assurances that orders will be brought forward—as they have been recently—to increase the number of judges.
I have lived with this situation for 10 years. What happens is that under extreme pressure the Lord Chancellor brings forward an order for the number of judges—I forget what it is called. That looks fine. The trouble is that it is subject to the Treasury's consent and the Treasury does not give consent, so it is purely a paper transaction. The matter should have been dealt with straightaway. Whether there will be sufficient support at a later stage to divide the House I do not know; I do not command any battalions, so I have to leave it to others. But it is a great pity.
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I am 82 now. I hope to live until 2006, but the matter should be dealt with long before then in the interests of doing things for a mass of people who will probably have different objectives. This is a unique body where it is left to independent people to decide whether they should continue giving service to the state. Nowhere else is that true. I beg leave to withdraw the amendment. I hope that before the Bill leaves this House something can be done about the matter.
Amendment, by leave, withdrawn.
Schedule 6 agreed to.
Schedule 7 [Repeals]:
Lord Hunt of Wirral Lord Hunt of Wirral moved Amendment No. 150:
Page 107, line 34, at end insert—
"Law Reform (Personal Injuries) Act Section 2(4)." 1948 (c. 41)
The noble Lord said: In view of the limited time I have in which to move the amendment, I merely point out that representations have been received from a range of bodies, especially those in the National Health Service, to the effect that the old 1948 provision should be removed; that is, the provision that prevents the courts from taking into account the provision of future care by the NHS. Under Section 2(4) of the Law Reform (Personal Injuries) Act 1948, no regard can be given in determining the reasonableness of any claimed future care costs and expenses or in reducing those costs and expenses by taking advantage of facilities for providing future care services, which may be available under the National Health Service. That produces a ridiculous situation, under which the NHS—or the Medical Defence Union or the Medical Protection Society—are compelled to make substantial awards for setting up in effect private care at home on a 24-hour basis for one individual for the rest of his or her life when there is evidence that it is not in the best interests of the claimant to have what is virtually a private hospital built around them. The NHS must allow the claimant to receive what may be better treatment from the NHS when all the money has been spent. The person can then claim that better treatment free of charge on the NHS.
At the moment, the courts are precluded by this provision from balancing the cost of private treatment against the cost of public treatment even where evidence is presented to the court that the claimant, in their own best interest, should receive treatment under the NHS. I have in mind my own experience of cases in which isolating the claimant in a 24-hour private hospital that is built around their home is probably the last thing that should happen, particularly with regard to their rehabilitation. They should be among other people with similar injuries, who are often receiving better care. The courts cannot currently review the reasonableness of future private expenses or the possibility that the extra costs can be minimised or avoided by taking advantage of facilities that are available in the NHS.
How serious is that? The experience in the NHS in dealing with claims is that future care costs are the largest single item in damages awarded in large claims. About two-thirds of the total liability for clinical negligence resides in a small number of large claims

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where much of the award payments are channelled into the private sector for the patient's long-term care. That means that, for patients who suffered their injuries in NHS hospitals, a large amount of money is transferred out of the NHS and into the private sector for the benefit of a very small number of people.
I understand that the Medical Defence Union believes that about £1,000 million leaves the NHS—I refer to the total NHS liabilities, which have been estimated at £5.25 billion—in order to set up those facilities. It estimates that £1,000 million could be redirected into NHS care if patients who needed longterm care were guaranteed that care under the NHS rather than the NHS having to pay damages that reflect the cost of private provision of long-term care.
I hope that the Minister will take time between now and Report to consider that matter. It is strongly felt by many doctors, dentists, nurses, consultants and people in the NHS. I have not discussed the amount of money coming from insurance premiums to pay for that care. With regard merely to the NHS, we should consider how much better that money could be spent within the NHS by setting up even better facilities for everyone. I beg to move.
Baroness Finlay of Llandaff: I rise briefly to support the amendment. The noble Lord, Lord Hunt of Wirral, has outlined the case very eloquently from the financial perspective. But I believe that another perspective needs to be outlined—that of the patients themselves.
A large amount of complex, highly technical and skilled care is now available to the NHS but is not available in the private sector. If a patient has had the misfortune to put forward a complex and unusual negligence claim and he has a rare and complex condition requiring ongoing intervention, he will almost inevitably have to access NHS care. There may almost be a duplication of care provision and continuity will be lost. Perhaps I may cite one simple example. If someone has lost his whole bowel and is dependent on total parenteral nutrition, even if he is managed at home on a 24-hour basis, he will inevitably have to access the NHS.
Legislation made in 1948 was appropriate to the services of the time, but there is a danger that the level of technical care available today bears no resemblance at all to what was scientifically known in 1948. I worry that the care delivered to patients does not, in this sense, offer redress. It does not help them to live with whatever problems they have and it does not help them towards a more integrated and better quality of life.
Baroness Scotland of Asthal: I say both to the noble Lord, Lord Hunt, and to the noble Baroness, Lady Finlay, that I understand the concerns which the amendment seeks to highlight. I am not able to accept the amendment because the implication of the change would not be restricted to personal injury claims involving periodical payments alone, and it is questionable whether the amendment is within the scope of the Bill.
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In any event, I do not believe that such a significant change to the substantive law on damages would be appropriate without full consultation. The amendment, as proposed, would also have considerable resource implications for the National Health Service.
In opposing the amendment, we do not wish to prejudge any recommendation that the Chief Medical Officer might make on possible reforms to the arrangements for clinical negligence cases in the longer term. The Government would wish to consider those before deciding the appropriate way forward. I can certainly tell the Committee that the issues referred to by the noble Lord, and alluded to by the noble Baroness, have been raised and are being considered. We await the report of the Chief Medical Officer with not only great anticipation but interest. I can assure noble Lords that that report will be read with great care, and any recommendations that the Chief Medical Officer may make will be given the utmost consideration.
Lord Hunt of Wirral: I am grateful to the noble Baroness. It would be helpful to know what kind of timescale we are operating on and whether or not the Chief Medical Officer's report will be made public.
Baroness Scotland of Asthal: I do not know at this moment and I am not privy to that precise information. I know that we have been anxiously awaiting the report. Particularly bearing in mind the scope of the issues which the Chief Medical Officer must address, the noble Lord will know that we would obviously prefer the consideration to be comprehensive. We await the report within the timescale appropriate to the Chief Medical Officer.
We are very aware how important this issue is. I know that a great deal of care is being taken in structuring the recommendations. If I am able to give the noble Lord specific details, I shall certainly write to him.
Lord Hunt of Wirral: I am very grateful to the noble Baroness. Obviously I shall consider carefully the points that she raised. I am particularly grateful to the noble Baroness, Lady Finlay of Llandaff, for, again, having brought us face to face with some very practical consequences of the 1948 legislation. Of course the amendment must be within the scope of the Bill or it would never have been accepted by the Public Bill Office. However, I shall reflect on it and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
8 p.m.
Baroness Scotland of Asthal Baroness Scotland of Asthal moved Amendment No. 151:
Page 109, line 18, column 2, at beginning insert—
"Section 48(4)."
On Question, amendment agreed to.
Lord Bassam of Brighton Lord Bassam of Brighton moved Amendment No. 152:
Page 109, line 18, column 2, at beginning insert—
"In section 70(2)(a), the words ", or in the case of the Official Solicitor a solicitor,"."
The noble Lord said: I am extremely tempted to read out the long explanation, which is technical, detailed and full of exciting information—the stuff that I know noble Lords love to hear at this time of day—but I shall resist that temptation. The purpose and effect of the amendment is to repeal any remaining legislative references that are inconsistent with the removal of the Official Solicitor, principal secretary and legal secretary posts from the list of statutory officers in Schedule 3 to the 1978 Act. I beg to move.
On Question, amendment agreed to.
Baroness Scotland of Asthal Baroness Scotland of Asthal moved Amendments Nos. 153 and 154:
Page 110, line 40, at end insert—
"Income and Corporation Taxes Act 1988 Section 329AA(8)." (c. 1)
Page 111, line 43, at end insert—

"Judicial Pensions and Retirement Act 1993 (c.8)

In Part II of Schedule 1, in the entry for Schedule 3 to the Judicature (Northern Ireland) Act 1978, the words from ", other than" to the end.

In Schedule 5, in the entry for the Judicature (Northern Ireland) Act 1978 the words "or 75(1)"."

On Question, amendments agreed to.
Lord Hunt of Wirral Lord Hunt of Wirral moved Amendment No. 155:
Page 112, line 13, column 2, at end insert ", except section 26"
The noble Lord said: I do not propose to speak at length to the amendment, but it is a further opportunity for us to refer to the duties of the Chancellor of the Duchy of Lancaster. I declare an interest as a previous holder of that office.
We shall debate the issue at length in the many days that are being set aside for Report. I do not wish to preempt that. However, I hope that the noble Baroness will assure us that she is conducting wide consultation on the proposals in the Bill as they affect the Chancellor of the Duchy of Lancaster. She will be aware that another previous holder of the office— Mo Mowlam—conducted extensive consultation about a proposed change and then concluded that no change was advisable. There has been no similar consultation period this time, but the proposals have now come forward.
As the noble Baroness acknowledges, some strong views are held on the subject. It would be helpful to have an assurance that widespread consultation is planned or is proceeding at the moment on this important issue. I beg to move.
Baroness Scotland of Asthal: I am not able to accept the amendment. I heard with trepidation the noble Lord's words that he will return to the issue at length on Report. Of course I understand why he says that.
The amendment is deficient. Section 26 of the Justices of the Peace Act says that references to the Lord Chancellor, in Sections 5(1), 6, 7(4) to 7(6), 8 and 25 should be construed as references to the Chancellor of the Duchy of Lancaster. These sections will naturally be different under the Courts Bill. Additionally, Clause 6(4) of the Courts Bill would need to be amended. So, in any event, we would not be able to accept the amendment in this form.
However, as the noble Lord knows, I have wider and less remedial concerns. First, I should set this question in context. I know that noble Lords are concerned that the provision to transfer the duchy's responsibilities for the appointment and removal of magistrates is unwelcome to some magistrates in the region.
There has been a great deal of concern expressed by the Chamber during the passage of the Bill about the lay magistracy, and the Government's regard and intentions for it. I hope that the Committee will agree that we have gone some distance to meet these concerns. We have promised to restore the Supplemental List. We have demonstrated our commitment to the role of the lay magistracy in its general criminal jurisdiction and its specialist jurisdictions. The plans to extend magistrates' sentencing powers are also a demonstration of the faith in the magistracy. We have enhanced the position of Benches in statute as a step to allay magistrates' concerns about local justice; and also because we believe that Benches are a valuable institution and important to magistrates. I do not think that we can be accused of disregarding those issues.
I welcome the opportunity to explain why Ministers of both departments are in agreement that we should transfer those responsibilities to the Lord Chancellor. The current split of responsibility for appointing magistrates is anomalous even under the current system. It does not apply to professional judges. It does not apply to other ancient duchies. Other historical counties and regions accept that local advisory committees, chaired by lord lieutenants of counties and advising the Lord Chancellor, constitute a valid means of appointing magistrates for the locality. That system will continue in the duchy area, as it will across the jurisdiction. Indeed, many would argue that in such an important matter as the appointment and removal of magistrates, the heightened opportunity for inconsistent practice represented by the split of responsibilities is hardly acceptable.
On the last occasion I answered this question I outlined the nature of the consultation. I went through the fact that when Lord Justice Auld consulted on the matter there was wide consultation about whether there should be jurisdiction bringing all the courts together to unify the system. Those matters were taken into account. Because of the lateness of the hour, I shall not go through the extensive reasons why this

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decision was taken. I have set out the full reasons in a letter to noble Lords. If the noble Lord returns to the issue on Report, I shall delight in extolling the reasons in full. I hope that the noble Lord will not think it discourteous of me if I do not go into any further detail at this point and that he feels content to withdraw the amendment.
Lord Hunt of Wirral: I caution the Minister not to discard those very detailed notes because they will be necessary. Tomorrow I shall table for consideration on Report the kind of amendment that she seeks in order to be able to utilise those extensive notes and the speech that she has in preparation.
I warn the noble Baroness that extensive feelings are held on this issue by many people across the Duchy of Lancaster and elsewhere. There is a feeling that they have not been specifically consulted about this proposal, save by Mo Mowlam, albeit a short time ago. The virtually unanimous view was that this provision should be retained. Someone decided to alter that view without any further consultation on the specific proposal. That is why such strong feelings are held. We shall return to the matter on Report. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Scotland of Asthal Baroness Scotland of Asthal moved Amendment No. 156:
Page 113, line 8, at end insert—
"Justice (Northern In section 18(9), the words "and in the Ireland) Act 2002 (c. entry relating to the Official Solicitor"." 26)
On Question, amendment agreed to.
Schedule 7, as amended, agreed to.
Clause 99 agreed to.
Clause 100 [Extent]:
Baroness Scotland of Asthal Baroness Scotland of Asthal moved Amendment No. 157:
Page 53, line 10, leave out "or 95" and insert ", 95 or (Alteration of place fixed for Crown Court trial: Northern Ireland)"
On Question, amendment agreed to.
Clause 100, as amended, agreed to.
House resumed: Bill reported with amendments.

Criminal Justice and Police Act 2001 (Powers of Seizure) Order 2003
8.11 p.m.
Lord Bassam of Brighton Lord Bassam of Brighton rose to move, That the draft order laid before the House on 24th February be approved [12th Report from the Joint Committee].
The noble Lord said: My Lords, this order has been seen by the Joint Committee on Statutory Instruments. In my opinion, its provisions are compatible with the European Convention on Human Rights. The order makes minor changes to the extensive list of powers of seizure in Schedule I to the Criminal Justice and Police Act 2001.
Part 2 of the Act, which comes into force on 1st April 2003, gives police officers and other investigators powers to seize property from premises and persons for examination elsewhere. Those may be necessary because there is insufficient time to conduct an effective examination on the premises or there is a need to use special technical equipment.
As noble Lords will recall, the provisions in Part 2 were introduced to deal with the problem identified in the case of R v Chesterfield Justices and the Chief Constable of Derbyshire ex parte Bramley, which highlighted the difficulties faced by the police where material that they are entitled to seize is contained with a large collection of material, some of which they might not be entitled to seize.
Provision has also been made in Part 2 for the seizure and retention of inextricably linked material, such as the contents of an entire computer hard-disk drive, where it is necessary to prove when specific items of information were created or amended. The legislation recognises that, with the huge increase in the use of computers, investigators need to be able to seize and forensically examine an entire disk or hard-drive to determine when individual documents have been created, amended or even deleted.
The new powers in Part 2 are not free-standing and can be exercised only in support of an existing power of seizure. Those powers are listed in Schedule 1 to the Act. The draft order will be made under Section 69 of the 2001 Act but cannot be made until it is approved by resolution of each House. Under Section 69(1) of the 2001 Act, my right honourable friend the Home Secretary has the power to add, modify and amend the powers of seizure listed in Schedule 1. The section thus provides a mechanism to allow for changes to other legislation containing powers of seizure that might need to be added to Schedule 1 or to amend it. Since the 2001 Act received Royal Assent in May 2001, new powers of seizure have been created and existing ones amended by the legislation. This order, therefore, merely tidies up the schedule to incorporate the changes. I beg to move.
Moved, That the draft order laid before the House on 24th February be approved [12th Report from the Joint Committee].—(Lord Bassam of Brighton.)
Lord Luke: My Lords, there is nothing to object to in the order. On these Benches, we approve of it.
Lord Dholakia: My Lords, I support the order. The Minister has given his explanation, and we are delighted that the provisions are compatible with the European Convention on Human Rights. I am happy with the assurance that the new powers in the order can be exercised only in reliance on an existing power of seizure and the powers listed in Schedule 1 to the Act. I support the order.
On Question, Motion agreed to.

Nationality, Immigration and Asylum Act 2002 (Consequential and Incidental Provisions) Order 2003
8.15 p.m.
The Minister of State, Home Office (Lord Falconer of Thoroton)The Minister of State, Home Office (Lord Falconer of Thoroton) rose to move, That the draft order laid before the House on 28th February be approved [13th Report from the Joint Committee].
The noble and learned Lord said: I beg to move that the draft Nationality, Immigration and Asylum Act 2002 (Consequential and Incidental Provisions) Order 2003, laid before the House on 28th February, be approved.
Ideally, every last consequential and incidental provision would normally be settled before Royal Assent to an Act. It became clear, when we put additional provisions into the Act, including the safe country list and non-suspensive appeals, that it would be impossible to ensure that all consequential amendments had been identified prior to Royal Assent. We tabled an amendment to Section 157(4), with Parliament's agreement, giving us the power to do so later by affirmative order. This order allows for the amendment of previous statutes affected by the coming into force of the various provisions of the Nationality, Immigration and Asylum Act 2002. They relate mainly to appeals and nationality.
The consequential amendments that relate to appeals amend Section 12 of the Immigration and Asylum Act 1999. Without them, the new appeals framework at Part 5 of the 2002 Act, which also contains new provisions on the certification of clearly unfounded claims by the Secretary of State, could not operate. The Part 5 provisions of the Act are due to commence on 1st April.
Several nationality provisions at Part 1 of the 2002 Act are also due to commence in April, including deprivation of citizenship and several categories relating to registration of citizenship. The consequential amendments that are required relate to deprivation and the ceremonies associated with citizenship.
The consequential and incidental amendments in the order are necessary to ensure that previous pieces of legislation affected by the coming into force of various provisions of the 2002 Act sit with the new legislation. The order forms a small but vital part in the restructuring of the appeals and nationality systems. I commend the order to the House.
Moved, That the draft order laid before the House on 28th February be approved [13th Report from the Joint Committee].—(Lord Falconer of Thoroton.)
Lord Luke: My Lords, once again, we on these Benches are in favour of the order and support it.
Lord Dholakia: My Lords, many of the provisions relating to new registrations and naturalisation procedures and matters relating to appeals, such as detention, are consequential and incidental provisions. We have no difficulty in approving the order.
On Question, Motion agreed to.

Rehabilitation of Offenders Act 1974 (Exceptions) (Amendment) (England and Wales) Order 2003
8.18 p.m.
Lord Falconer of Thoroton Lord Falconer of Thoroton rose to move, That the draft order laid before the House on 25th February be approved [12th Report from the Joint Committee].
The noble and learned Lord said: My Lords. I beg to move. In my view, the measures contained in this statutory instrument are compatible with the rights protected by the European Convention on Human Rights.
It is important for those who offend to be able to reform, pick up their life again after paying the penalty and have a fresh start. As long as the Rehabilitation of Offenders Act 1974 has been in place, there has been a list of positions for which the offender, even if his or her conviction under the Act is spent, cannot escape his or her past. If asked an excepted question in respect of all past convictions by a person entitled to ask such a question, he or she must answer in respect of all past convictions, not merely those that are unspent.
The order contains several additional exceptions. The first relates to applicants for private hire vehicle drivers' licences in London. The amendment adds London's private hire drivers—minicabs and so on—who will become subject to licensing on 1st April 2003. The order will also cover those applying to be licensed by the new Security Industry Authority. The SIA will be responsible for licensing those employed in a number of private security industry sectors. Licensing will be introduced by sector beginning with door supervisors and wheel clampers at some time in 2004. Social workers and social care workers, including those in training, are to be registered by the General Social Care Council in England and the Care Council for Wales. This order will permit criminal records checks as part of the registration process which is due to commence on 1st April 2003.
The order also covers any employment or other work within a high security hospital; that is, Ashworth, Broadmoor and Rampton hospitals. The existing health service execption covers many, but not all, of those who work in the hospitals. This amendment is necessary to ensure that all staff can be made subject to the appropriate criminal records checks.
The final amendment concerns staff working in probation and bail hostels. All posts in those hostels involve contact with residents and thus it is proposed that the amendment should cover all staff. I commend the order to the House.
Moved, That the draft order laid before the House on 25th February be approved [12th Report from the Joint Committee]. —(Lord Falconer of Thoroton.)
Lord Luke: My Lords, this draft order covers several different areas. The general public will be happy to see questions being allowed with regard to spent convictions in certain cases. We support the order.
Lord Dholakia: My Lords, we welcome the measures, which are designed to add to the list of
1038
exceptions to the regime for the rehabilitation of offenders under the 1974 Act. The draft order has our support.
On Question, Motion agreed to.

Police (Northern Ireland) Bill [H.L.]
Returned from the Commons agreed to with amendments and with a privilege amendment.
House adjourned at twenty-two minutes past eight o'clock.