Civil Liability Bill [HL]

Debate between Baroness Bowles of Berkhamsted and Lord Beecham

Committee: 2nd sitting (Hansard): House of Lords
Tuesday 15th May 2018 Lords Chamber

[Baroness Bowles of Berkhamsted (LD)]

My Lords, I apologise for not having been able to speak at Second Reading. I will briefly intervene on these amendments, because I find the content of all of them quite persuasive. The mover of Amendment 56 touched on an important point: who owns the risk if you accept a lump sum payment instead of periodic payments? If, hopefully, the routine is that in most circumstances, one finds out what a periodic payment would look like, one needs to consider this: if you prefer to have a lump sum and take the investment risk, the person who makes that choice owns it, which in turn reflects upon how you would make presumptions about their investment strategies. I intended to touch on this when we come to my amendment in a later group, but as this is the other side of the argument, I wished to raise that point now and to say that I am in the “shove” rather than “nudge” brigade.

[Lord Beecham]

My Lords, the noble and learned Lord, Lord Mackay, referred at Second Reading to Clause 8(3) and the assumptions to be followed in determining the rate as set out in, notably, paragraph 3(3)(a) of proposed new Schedule A1, in which the Lord Chancellor must assume that the relevant damages are payable in a lump sum rather than under an order for periodical payments.

Paragraph 3(3)(d) of proposed new Schedule A1 prescribes an assumption that the relevant damages are invested using an approach that involves,

“more risk than a very low level of risk, but … less risk than would ordinarily be accepted by a prudent and properly advised individual investor who has different financial aims”.

The noble and learned Lord observed that the Lord Chancellor would have to have,

“a certain element of the prophet about him”,

and that:

“Getting an expert panel to agree … will be very difficult” .—[Official Report, 24/4/18; cols. 1504-05.]


Perhaps the Minister could confirm this, or make it clear that this a not-for-prophet provision.

The decisions that will be made will impinge heavily on the innocent victims of negligence or breaches of statutory duty over a wide range of circumstances, hence the noble Lord’s amendment that would provide that an order may distinguish between different classes of case by reference to the description or anticipated scale of future pecuniary loss involved. But the amendment to Section 1 of the Damages Act 1996—in Clause 8, lines 29-34—which states that the provision of the preceding subsection requiring the court to,

“take into account such rate of return (if any) as may from time to time be prescribed by an order made by the Lord Chancellor”,

is qualified such that it,

“does not however prevent the court taking a different rate of return into account if any party to the proceedings shows that it is more appropriate in the case in question”.

This seems to create the possibility of the courts departing significantly in individual cases from the Lord Chancellor’s prescribed tariff. This would be welcome, but can the Minister confirm that that is the intention behind the Bill in that context?

I certainly endorse the noble and learned Lord’s Amendment 57A and I hope the Government will adopt it.