Criminal Injuries Compensation Scheme: Structured Settlements (Hansard, 7 November 1995)

§ Baroness Blatch

Structured settlements can be a highly advantageous way of paying compensation to victims in higher value cases. It affords them the option of receiving their award, not as a lump sum, but in the form of a stream of periodic payments under an annuity. These payments will be tax-free and can be index-linked, thereby providing guaranteed payments for life or other specified period.

Under provisions in the Criminal Injuries Compensation Bill, this facility will be available to claimants under the new, enhanced tariff scheme to be established under the Bill's powers. The Bill also provides for the facility to be extended to claimants under the present (1990) scheme although, as previously announced (10 July 1995, col. 389, and 17 October 1995, col. 723) that will first require a complementary amendment to the 1990 scheme to allow payment of compensation by the purchase of annuities. Once the Criminal Injuries Compensation Bill receives Royal Assent, we will accordingly amend the 1990 scheme by making some small alterations to paragraph 12, and by the insertion of new paragraphs 12A and 29(g). The revised paragraph 12 and the new paragraphs will read as follows:

"12. Subject to the other provisions of this Scheme, compensation will be assessed on the basis of common law damages and will normally take the form of a lump sum payment, although the Board may make alternative arrangements in accordance with paragraph 9 above or with paragraph 12A below. More than one payment may be made where an applicant's eligibility for compensation has been established but a final award cannot be calculated in the first instance—for example where only a provisional medical assessment can be given. In a case in which an interim award has been made, the Board may decide to make a reduced award, increase any reduction already made or refuse to make any further payment at any stage before receiving notification of acceptance of a final award. Once an award has been paid to an applicant paragraph 12A does not apply."

"12A. Where prior agreement is reached between the Board and the applicant, an award may consist in whole or in part of an annuity or annuities, purchased for the benefit of the applicant or to be held on trust for his benefit. Once that agreement is reached, the Board will 200WA take the instructions of the applicant as to which annuity or annuities should be purchased. Any expenses incurred will be met from the award."

"29(g). Paragraph 12A of this Scheme will apply additionally to applications otherwise falling to be considered under the 1969 or 1979 Schemes."

These changes will be made when the Criminal Injuries Compensation Bill receives Royal Assent.