Law Commission: Funding

Lord Beecham Excerpts

Tuesday 10th July 2018 Lords Chamber

Asked by

[Lord Beecham]

To ask Her Majesty’s Government what assessment they have made of comments made by the Chair of the Law Commission that reductions in the Commission’s funding could put its independence at risk.

[The Advocate-General for Scotland (Lord Keen of Elie) (Con)]

My Lords, the Law Commission’s independent status is protected in law. Following reductions in its core budget, the commission has undertaken more funded projects. It is for the Law Commission to decide which projects it recommends are taken forward.

[Lord Beecham (Lab)]

My Lords, the commission’s website proclaims that it is a statutory body that aims,

“to ensure that the law is as fair, modern … and as cost-effective as possible … to conduct research and consultations … to codify the law, eliminate anomalies, repeal obsolete and unnecessary enactments and reduce the number of separate statutes”.

The commission’s budget has been cut by 54%—£2.1 million—since 2010, resulting in projects being delayed and, even more worryingly, in the words of the current chair, Sir David Bean, “elbowed aside” in favour of projects commissioned by the Government. Will the Minister confirm the commission’s independence and its right to select projects without being obliged to prioritise unduly work commissioned by the Government?

[Lord Keen of Elie]

My Lords, I have already sought to underline the commission’s independence with regard to these matters. The Government continue to value the important work of the Law Commission and recognise that it must retain the ability to make independent choices about reform projects that it chooses to take forward. There are, of course, circumstances in which departments of government will, as it were, seek to instruct or seek approval for particular projects to assist with the Law Commission’s budget. At this point, I pay tribute not only to the work of the Law Commission but to its outgoing chair, Sir David Bean.

Civil Liability Bill [HL]

Lord Beecham Excerpts

3rd reading (Hansard): House of Lords
Wednesday 27th June 2018 Lords Chamber

[Lord Faulks (Con)]

My Lords, either there is a realistic power to vary the rate—I can see that there are some arguments in favour of that, which found favour with Mr Sumption, as he then was, when sitting in Guernsey—or it does not have any real meaning, as is the case following the decisions of the Court of Appeal. Although flexibility is desirable, if it is meaningless and if we as a legislative body decide that we are not going to overrule any decisions of the Court of Appeal, the noble and learned Lord, Lord Hope, is absolutely right about being accurate in the way that we legislate.

[Lord Beecham (Lab)]

My Lords, I hesitate to take either side of this argument, given the wisdom and experience of both noble and learned Lords, who have given conflicting views. I am therefore perfectly content, for once, to allow the Minister to indicate the Government’s attitude. After all, this Bill is not ending here; it is going to another place and there will be time for people with greater acumen than mine to look into the arguments advanced by the noble and learned Lord. It will be interesting to see what the Minister makes of them, but, of course, it is not the end of the day and perhaps this elevated discussion can take place with a more useful result than we are likely to see today.

[The Advocate-General for Scotland (Lord Keen of Elie) (Con)]

My Lords, I am most obliged to the noble Lord, Lord Beecham, for his positive contribution to the debate, to all noble Lords and noble and learned Lords for their observations on this amendment, and to the noble and learned Lord for moving it.

From the very outset—I go back to the Law Commission’s 1994 report on structured settlements—it was intended that a provision of this kind to depart from a prescribed rate should be very much the exception rather than the rule. Clearly, it recognised that it would be both expensive and time-consuming if the prescribed discount rate could regularly be the subject of challenge on the basis that there might be another more appropriate rate for any number of reasons. That goes some considerable way to explaining the position of the Court of Appeal in the case of Warriner v Warriner.

As the noble and learned Lord, Lord Hope, observed, I referred to a guillotine, but I qualified it with the words “almost complete”—this is a deficient guillotine; it is not a complete guillotine. I said that because, for example, the decision of the Inner House of the Court of Session, the appeal court in Scotland, in Tortolano v Ogilvie Construction, indicated that there may be cases in which the power to depart from the prescribed rate can be applied—but I accept that they will be wholly exceptional. In Tortolano, the court suggested that there might, for example, be a need to take account of a claimant who had to pay tax in a foreign jurisdiction, and that impacted upon the valuation of the award.

These are wholly exceptional circumstances, but the provision in Section 1(2) of the Damages Act 1996, which would be preserved by the words in subsection (2) of the proposed new Section A1, would allow for those wholly exceptional circumstances where the judiciary would be entitled to exercise an inherent discretion in order to achieve justice between the parties. It is in these circumstances that I would resist the amendment; I recognise that there may be room for taking this further, although I have been unable to identify it so far, to ensure that we can perhaps more clearly identify circumstances in which the exception would be applicable.

As the noble Lord, Lord Beecham, indicated, the Bill will be considered in the other place, and I and my officials would be content to explore further with the noble and learned Lord, Lord Hope, if he wishes to do so, whether the provision might be improved in some way. However, I have difficulty with that because I am concerned that if we intrude too much into this quite exceptional discretion, there is a risk of encouraging unnecessary and expensive litigation over the appropriate rate in individual cases.

On that basis, and recognising the point that the noble and learned Lord makes, I invite him to withdraw the amendment.

--- Later in debate ---

[Lord Faulks]

My Lords, I return to a group of amendments concerned with the regularity of the review of the discount rate. I raised this matter at Second Reading, in Committee and on Report, so I will not weary the House by going over the arguments again. Suffice it to say that I entirely agree with what the Bill does in providing for the obligation to have regular reviews at a certain juncture, although the Lord Chancellor has the right to have an earlier review if necessary. My argument, which I am glad to say the noble Earl, Lord Kinnoull, supports, as I think others in the House do, is that it is important that the reviews be regular and there would be an obligation to hold them, but that they do not have to take place too frequently. Why is that? Because those involved in litigation, on both sides, will inevitably seek effectively to guess—however well informed that guess might be—what the discount rate will be after it has been determined.

If there is to be a change every three years, the period leading up to the moment of change is likely not to result in settlements or to result in adjournments—in other words, in perfectly legitimate gaming of the system. This will happen inevitably whenever a review is about to take place, but it will happen less often if it is five years than if it is three years. This will, I think, help to produce more settlements. There are always uncertainties in litigation, but this is a particular uncertainty in large cases, where the discount rate can have such an effect on the quantum of damages. My submission is that five years, for the reasons I have already advanced, remains a better provision than three years. I accept that any provision is arbitrary, but I hope that the Government will listen to me today, will take into account all the evidence they have obtained and decide that, after all, five years might be a better period than three years. I beg to move.

[Lord Beecham]

My Lords, I am slightly puzzled at the effect of amendment as moved by the noble Lord, because the Bill prescribes that the rate of return must be started within a period; not every three years, or every five years, but within that period. So potentially, it seems to me—perhaps the noble and learned Lord will either correct me or confirm that I am right—that you could have a review at less than five years, depending on the circumstances. If, for example, there were a crash, as in 2008, which affected rates of return and so on very significantly, you would not have to wait up to five years to deal with it; you could have that review within the period. In effect, any time within that five years could mean a three-year review, a shorter review or something with a maximum of five years. If that is the case, is that acceptable to the Government?

[Lord Keen of Elie]

My Lords, I am obliged to my noble friend Lord Faulks and to other noble Lords who raised this matter in Committee and on Report. On the point raised by the noble Lord, Lord Beecham, it is indeed the case that we are talking about a maximum period for review, and therefore it can be at any time within that period. What we are concerned to avoid is the situation that arose in the past where many years passed before a review was carried out.

The choice between the two periods, three years and five years, is essentially a pragmatic one, I suggest. The arguments for the two options appear to me to be quite evenly balanced. A number of noble Lords have made the point that there would be less likelihood of a gaming of the system if that period were extended to five years. It was a point made in particular by the noble Lord, Lord Marks, on Report, when he indicated that he would prefer a five-year period over a three-year period.

Following discussions with several of your Lordships after Report, we have given further consideration to the question of the length of the review cycle and we accept that a five-year maximum period could help to reduce the effect of the litigation practice of trying to game the system, as distinct from a three-year period. In light of the arguments that have been made, the Government propose to accept these amendments.

--- Later in debate ---

[The Earl of Kinnoull (CB)]

I was not intending to speak, but I associate myself entirely with the remarks and thanks made and given by the noble Lord, Lord Marks. I was going to add only what fun it has been working with the Bill team, who have worked immensely hard. They have done a particularly good job on this Bill, which should be recorded.

[Lord Beecham]

My Lords, I am not sure I have enjoyed much fun as we have gone through this Bill but, as it leaves the House, I thank the Minister and his colleague on the Front Bench, and the Bill team for their readiness to discuss its provisions and respond to some, at least, of the concerns and suggestions that have been made from all sides of the Chamber. I also express my admiration for those who have brought their professional expertise and knowledge to our debates and discussions. It has been quite an awesome experience to listen to some of those who have spent a lifetime dealing with these matters.

Nevertheless, from these packed Benches, we believe that the Bill is fundamentally flawed and hope that, when it returns to us, it will have been improved. In particular, we would like to see the definition of “whiplash” made by medical experts and the damages determined by the judiciary based on Judicial College guidelines, rather than by a tariff specified for whiplash injuries. If there is to be a tariff, the college should be involved in determining the levels.

The Law Society suggests that the Government should clarify what would constitute a failure to take reasonable steps to mitigate the effect of an injury, which is part of the Bill’s proposition. It is also concerned about the provision in Clause 3 that means the capacity of the Lord Chancellor to allow discretion to increase the award in exceptional circumstances is by way of regulation, again, rather than being left to the judiciary to determine what constitute such circumstances.

Underlying the Bill and the proposals to raise the small claims limit for whiplash injuries to £5,000, and for other personal injuries to £2,000, is the effect of creating obstacles to justice likely to deter legitimate claimants from pursuing and receiving compensation. Where they do, they are likely to add to the growing difficulties experienced by the courts in dealing with unrepresented litigants. To most Members of this House, the sums involved are very modest; to many potential claimants, they are not. For our part, we will in future seek to oppose the intended increase of the small claims limit to all RTA cases to under £5,000 and for all other personal injury claims to £2,000, when the relevant regulations are laid.

We look forward to a review of the impact of this legislation on the much-vaunted claims of the insurance industry significantly to reduce insurance premiums—the noble and learned Lord has referred to that aspiration, as I would describe it—and, more positively, to a significant growth in the number of periodical payments orders in the most serious cases of injury, which are the subject of Part 2 of the Bill, which deals with the discount rate. That is the most positive part of the Bill, and it certainly has our support.

It has been an interesting experience to participate in these debates, and I hope that the Bill will return to us in due course, in an improved form. I await that moment with barely contained impatience.

Bill passed and sent to the Commons.

Privately Financed Prisons

Lord Beecham Excerpts

Wednesday 27th June 2018 Lords Chamber

[Lord Beecham (Lab)]

My Lords, of course I will follow the noble Baroness’s advice—up to a point. We have one of the highest incarceration rates in Europe, exceeded only by those in some of the less advanced countries in the east of Europe. Yesterday, the Prisons Minister, Rory Stewart, said that prison numbers would rise from the current 83,000 to 93,000—the figure inadvertently quoted by the Minister—by 2022. The state of our prisons is a national disgrace as the Government struggle to recruit and retain staff, yet the Minister in the other place feebly states that he would like the prison population to go down but that it is not very likely to happen because he is not sure that there is a will among the people or Parliament to take measures to reduce the population. Given this craven approach to a critically serious problem, should not that Minister resign?

[Lord Keen of Elie]

My Lords, there is nothing craven about the approach that has been taken to the very real and challenging issues relating to our prison population. We are concerned that we should look more carefully at alternative forms of sentence, such as community orders, that would in themselves replace the requirement for sentences particularly of less than 12 months’ imprisonment. That is a matter for consideration. In addition, I remind the noble Lord that we are in the course of taking active steps to provide not only additional but new and refurbished prison accommodation in order to improve the standard of our prisons across England and Wales.

National Probation Service

Lord Beecham Excerpts

Wednesday 27th June 2018 Lords Chamber

Asked by

[Lord Beecham]

To ask Her Majesty’s Government what plans they have to review the effectiveness of the National Probation Service.

[The Advocate-General for Scotland (Lord Keen of Elie) (Con)]

My Lords, the National Probation Service supervises the highest-risk offenders. The Chief Inspector of Probation has consistently found the overall performance of the National Probation Service to be good. The Ministry of Justice has no existing plans to review the effectiveness of the NPS.

--- Later in debate ---

[Lord Beecham (Lab)]

My Lords, the Justice Committee’s report is a damning indictment of the coalition Government’s so-called transformation of the probation system, with its split between the probation service and community rehabilitation companies, and with privatisation involving the usual suspects such as Serco. The committee is,

“unconvinced that … the … model can ever deliver an effective or viable probation service”,

and asserts that,

“Staff morale is at an ‘all-time low’”.


CRC performance has been “disappointing”, and the voluntary sector is “less involved” than before. The committee also criticises the Ministry of Justice’s ability to let contracts. One shocking revelation by the Chief Inspector of Probation was that 40% of offenders are supervised merely by six-weekly telephone calls. She agrees that the system is “fundamentally flawed”. Do the Government intend at all to address these problems? And can the Minister reassure the House that the chairman of the Justice Committee, Sir Bob Neill, will not be dispatched to Afghanistan when these matters are debated in the Commons?

[Lord Keen of Elie]

My Lords, I am not aware of any Member of the other place having been dispatched anywhere. With regard to the Justice Select Committee report, we are of course aware of its terms, and we are taking action to consider the terms in which it has reported. As the committee observed, it is important to understand the effect that probation can have on those leaving prison. It is often a cross-government and cross-departmental issue; for example, it involves issues such as homelessness, as well as other through-the-gate services. With regard to the situation of the CRCs, there are some instances in which they are working effectively with the National Probation Service, but we accept that there have been challenges. It is clear to us that the CRCs’ services need to be improved, and that is being addressed at the present time.

Courts and Tribunals (Judiciary and Functions of Staff) Bill [HL]

Lord Beecham Excerpts

2nd reading (Hansard): House of Lords
Wednesday 20th June 2018 Lords Chamber

[Lord Beecham (Lab)]

My Lords, I refer to my interests as an unpaid consultant of my former firm of solicitors and as the father of a practising barrister who specialises in employment and housing law and who would, I think, be very interested in the suggestion by the noble Lord, Lord Flight, of a housing court—a suggestion with which, with my other hat on, as a local councillor with concerns about these matters, I would also concur.

The National Audit Office report Early Progress in Transforming Courts and Tribunals, published six weeks ago, begins with a set of key facts, identifying the Government’s expectation of savings of £265 million a year from 2023-24 onwards, with a staff reduction of 5,000—one third of the current staffing—and 2.4 million fewer cases held in physical courtrooms. The NAO describes the change as,

“a very significant challenge”,

with changes,

“far broader than those in comparable programmes in other countries”.

The timetable has been extended from four years to six, interestingly without changing the budget, and this is still shorter than the smaller programmes of this kind in other countries.

Moreover, the Infrastructure and Projects Authority concluded in its latest assurance review that successful delivery of the programme is in doubt. It avers that less progress overall has been made, such that a spending gap of between £61 million and £177 million has appeared, depending on whether the Treasury will allow earlier underspending to be carried forward, while costs have increased and planned benefits reduced. The NAO points out that Her Majesty’s Courts and Tribunals Service still needs to develop how the services will work and that,

“stakeholders do not fully understand how the reformed services will work in detail”.

It concludes that a lack of clarity has contributed to delays and programme failings.

The NAO adds:

“Failure to sustain commitment from all delivery organisations will significantly reduce the likelihood of success and the benefits achieved … Delivering change on this scale at pace means that HMCTS risks making decisions before it understands the system-wide consequences”.


To cap it all, it asserts:

“The benefits claimed so far by HMCTS exceed expectations but risk putting pressure on its ability to maintain services”.


It concludes that, while it has improved,

“its governance and programme management … there is a long way to go”,

and warns of major risks in a number of areas.

This damning critique may resonate with Members who recall the fanfare with which the coalition Government launched the disaster entitled universal credit—or discredit, as I and many others afflicted by the problems are apt to describe it. But the National Audit Office does more than list these problems. It states:

“The scale of the challenge is increasing and the programme is under significant pressure to meet what is still a demanding timetable”.


It makes four critical recommendations, to which I invite the Minister to respond. It says HMCTS should allow enough time to engage with affected parties within the justice system, to consult widely and respond to the results, to provide more detail of how the system will work and to carry the staff along with it. It says HMCTS should resist pressure to claim savings until planned changes are fully embedded. It says HMCTS should provide greater transparency on objectives and progress. Finally, it says HMCTS should work with the department and the Treasury to address the system-wide consequences of planned changes. In more general terms, the NAO suggests that there should be greater transparency on the Government’s objectives and progress, and clarity on how plans are adapted in response to risks.

We are, after all, dealing with a system through which 4 million cases pass yearly: 1.7 million criminal court matters, 1.9 million civil cases and 250,000 family court cases. Thanks to the massive cuts in legal aid and advice, which have led in some areas of law and in different parts of the country to the creation, in effect, of a desert of professional legal support, too many people have to struggle unaided with their legal problems or are driven to rely on claims management companies, the nefarious activities of which featured in our recent discussions on the Civil Liability Bill.

Inevitably, these changes in both the criminal and civil areas are impacting on the supply of qualified professionals, as well as the number of litigants acting in person, causing considerable delays in the court process. But we also have to consider other difficulties which are increasingly confronting people with legal problems. The court closure programme may be saving money for the Ministry of Justice, but it is increasingly impacting on court users in terms of cost and lengthy travelling times—an issue raised by the Law Society, which points to the impact on vulnerable court users in particular. More than 200 courts have been closed since 2011. Yet the MoJ has made the curious decision to close Cambridge magistrates’ court, which already has videolink technology. It seems a rather strange choice for closure.

No doubt the Government’s response will be to talk up the impact of increasing the use of digital technology in the conduct of legal processes—very much part of their reform programme—but I suspect I am not alone among Members of your Lordships’ House in struggling with this new and constantly developing world and being ever grateful for what used to be PICT and is now PDS, the Parliamentary Digital Service, rescuing me from time to time. I find myself in the position exemplified by Groucho Marx, who once declared:

“A child of five would understand this. Send someone to fetch a child of five”.


Even children of that age could probably match my performance—and, I suspect, others’—and therefore, almost certainly, that of many of those who will be having to rely on that approach as people involved in the justice system. I fear that, as we have learned from the introduction of universal credit and the dreadful record of the Home Office, the digital world is not one within which everybody is comfortably able to manage.

The Equality and Human Rights Commission draws attention to both pros and cons of the modernisation programme. It welcomes the opportunity to improve accessibility for some disabled people by providing alternatives to attending court in person; I would add some family cases, where one party, perhaps the wife or mother, cannot be face-to-face with an abusive partner—the sort of area that the noble Baroness was concerned about. But it has concerns that,

“people with certain protected characteristics are excluded by digital processes, and that video-link hearings and online courts negatively affect access to justice and fair trial rights. There are also implications for principles of open justice and for public confidence in the justice system”.

One wonders, too, how far these developments will take us. Will we see the development of a “Justice Alexa”, initially providing advice but ultimately deciding cases? The Law Society has expressed concerns that new technology has not been fully tested and evaluated, while court closures proceed in any event. It urges that before embarking on a significant court closure programme and much-increased reliance on new technology and online courts, there should be a full evaluation of these developments. Will the Government agree, and with what sort of timescale in mind? In any event, what is the Government’s estimate of the cost of the new technology on which £100 million has already been spent, or of the likely receipts from the sale of court buildings? As we have heard, 80% of those that have been sold only realised sums equivalent to average house prices—hardly a financial bonanza likely to contribute significantly to the programme.

We are at one with the Government in their intention to modernise the court system, with the important caveat that the objective must be to facilitate access to justice—including the areas raised by the noble Baroness, Lady Newlove, about victims of domestic violence—not merely to engender visible financial savings at the possible expense of those who really need the protection of the law.

Private Burial Grounds

Lord Beecham Excerpts

Monday 18th June 2018 Lords Chamber

[Lord Keen of Elie]

My Lords, I entirely accept the noble Baroness’s observation on the limited regulation of private burial grounds in England. That is why we have agreed that the Law Commission should have a project aimed at addressing this matter. The present regulation, such as it is, goes back to a series of statutes between 1852 and 1857 and is of limited utility today. The London Borough of Enfield has acted on health and safety concerns reported at the cemetery referred to by the noble Baroness, and following an inspection by council inspectors, a temporary closure notice was placed on the site so that necessary repairs could be carried out.

[Lord Beecham (Lab)]

My Lords, what is the current position regarding the policy of the north London coroner, Mary Hassell, of refusing to facilitate prompt funerals in accordance with Jewish and Muslim practice, following the High Court ruling that her policy is discriminatory and unlawful? I ought to declare a potential posthumous interest.

[Lord Keen of Elie]

I deeply regret that the noble Lord’s interest is posthumous. I am not in a position to answer the specific point raised by the noble Lord, but I will write to him and place a copy of the letter in the Library.

Civil Liability Bill [HL]

Lord Beecham Excerpts

Report stage (Hansard): House of Lords
Tuesday 12th June 2018 Lords Chamber

[Lord Beecham]

My Lords, I refer to my interest as an unpaid consultant to my former legal practice. A distinguished former Member of this House in the late 19th century, Lord Bowen, who served as a Lord of Appeal in Ordinary, was a noted wit. He it was who wrote:

“The rain it raineth on the just


And also on the unjust fella;

But chiefly on the just, because

The unjust hath the just’s umbrella”.

In its enthusiasm to deprive the unjust claimant in whiplash cases of the umbrella of justice, the Government’s measures, embodied in Clauses 2 and 3, will effectively remove it from the just claimant—a reversal of Lord Bowen’s scenario. As the noble and learned Lord, Lord Woolf, asserted, this is,

“a proposal which involves a genuine victim of whiplash injuries receiving reduced damages in order to deter a dishonest claimant from bringing a claim”.

Let me be clear. There can be no one in this House who wishes to facilitate false claims. All of us support the need for any claim to be founded on objective medical evidence, and it is right for this to be a requirement of any out-of-court settlement. However, as the Bar Council points out, the effect of the Bill as originally drafted, and the draft regulations that have been published, would result in reductions of between 22% and 89% in compensation for the victims of whiplash injuries for up to two years, coupled with the costs that they will have to bear no longer being recoverable by the defendants. Thus the compensation under current Judicial College guidelines, set in 2017, for a four to six-month duration of injury, would drop from a range of £2,150 to £2,703 to £470 under the draft regulations, and for a 10 to 12-month duration from £3,257 to £3,810 as a range to £1,250. Of course, the new arbitrary figures for damages would relate only to the time factor and not, for example, to the intensity of any pain suffered.

The amendment proposed by the noble Lord, Lord Sharkey, comes closer to the Judicial College guidelines, but it would be better in my submission simply to delegate the responsibility for certain tariffs to the college rather than to either Ministers or Parliament. That should be a matter for the judiciary.

The Minister’s letter of 7 June contains some welcome changes to the Bill as drafted, including a triennial review of Part 1. However, it contains a statement that underlines the problematic nature of the Government’s response. The Minister avers:

“The Lord Chancellor should set those tariffs which will act to disincentivise unmeritorious claims to reduce costs for all motorists but which will also continue to provide a proportionate amount of compensation where genuine injury is suffered”.


In other words, a genuine claimant is to recover less compensation than he would otherwise receive in order to deter the fraudsters.

But why are the insurers not more rigorous in their assessment of claims, and what happens when the fraudsters cotton on to the implication that they simply need to moderate their claims and the insurers will be content to pay up, effectively on demand, without demanding proper examination of the claim? As the noble and learned Lord, Lord Woolf, averred in a note circulated some time ago, this proposal,

“involves a genuine victim of whiplash injuries receiving reduced damages in order to deter a dishonest claimant from making a claim”.

There is of course disagreement about the extent and cost of fraudulent claims, which should certainly be resisted by insurance companies. It has been suggested that they have been too ready to settle dubious claims rather than risk the costs of defending them. But, importantly, the insurance industry’s own estimates show that the amount paid out on whiplash claims declined by 17% between 2007 and 2016, while premiums rose by an average of 71%. Meanwhile, premium tax—imposed, of course, by the Government—doubled to 12% between 2014 and 2017, and the cost of repair bills has risen by 33% since 2013. The noble Baroness, Lady Berridge, gave us further illustrations of where costs are rising. I remind your Lordships at this point that there is not a consensus on the number of fraudulent complaints brought and settled hitherto. Of course fraud must be deterred—but again I say, not at the expense of genuine victims.

Another consequence that is highly likely to flow from the Bill’s proposals is on the working of an already overstretched court system, with the increased number of litigants in person already causing delay likely to rise even further. Perhaps the forthcoming courts and tribunals Bill will impact on this, as more people who work in the system will be empowered to offer advice—although not representation, which is no longer available from legal professionals. However, there must be a risk in reducing the level of expertise in this way.

Amendments 6 and 8 in this group would restrict the application of the clause to 12 months rather than two years. Most cases are in that category, and two years of pain and discomfort is surely too long for the lowest level of compensation. Injuries that are serious enough to last over one year and up to two years are not “minor” by any reasonable definition. The effect of the reductions in damages is the removal of the right to claim full compensation. These are arbitrary and disproportionate measures.

Amendment 7 deletes an unnecessary requirement to mitigate the effect of damages which of course is already part of common law. We on these Benches support Amendment 9. On Amendment 10, there has been much pressure, understandably, for the tariff to be in the Bill. However, the problem with that amendment, and generally with Clause 2, is that the figures would be determined by the Lord Chancellor—with all due respect to former Lord Chancellors in your Lordships’ House. Our view is that, while any changes would be made by secondary legislation, the setting of the tariff should be determined by the Judicial College—and we concur with the argument of the noble and learned Lord, Lord Woolf, in that respect—in accordance with the practice as exemplified by the 14th edition of the Guidelines for the Assessment of General Damages in Personal Injury Cases. It should be for the judiciary, not the Government of the day, to determine this, and we do not favour Amendment 10 on that ground.

Amendment 12 goes some way to meet that requirement, but still leaves it open to the Lord Chancellor of the day—now, of course, no longer necessarily someone well-versed in legal matters, as other noble Lords have pointed out—to take a position contrary to that of the judiciary. This could be a troublesome precedent for other areas of justice at a time when it seems to be increasingly difficult to recruit judges of calibre, let alone with the experience of the noble and learned Lords participating in today’s proceedings.

Amendment 29A follows in seeking to leave out Clause 13 and giving the court power where it seems that the tariff is inadequate in respect of damage inflicted. We on these Benches support Amendment 46, which would require regulations for the FCA to report on the effect of insurance practices in relation to premiums and savings.

The noble and learned Lord, Lord Woolf, made a powerful case for removing Clauses 2 and 3 from the Bill. If the real concern is the prevention of fraud, with which we all concur, we should look at other measures. These could include heavier sentences for insurance claims fraud, higher no-claims bonuses and, above all, not punishing a genuine claimant for the misdemeanours of the fraudulent or the laxity of the insurance industry in resisting the fraudster. Of course, the role of claims management companies demands rigorous examination and action.

In the light of our support for the noble and learned Lord’s proposal to delete Clause 2, we will not push our amendments to Clause 2 today, as we hope that the clause will disappear. However, should it remain, we will need to bring our amendments back at Third Reading.

[The Advocate-General for Scotland (Lord Keen of Elie) (Con)]

I am obliged to noble Lords for their contributions. I will speak to Amendment 6 and to Amendments 7, 8, 9, 10, 11A, 12, 17, 17A, 17B, 18, 19, 20, 25, 26, 27, 29A, 30, 32, 39 and 46. I hope noble Lords will forgive me if I take a little time over some of the points.

I begin by picking up on some of the observations made by noble Lords but will begin with a generality. I sometimes have the feeling that, were some noble Lords faced with an enormous edifice, their response would be, “You have to explain how every component part is held together before I am prepared to believe that I face an edifice”. The reality was outlined by my noble friend Lord Faulks, who pointed out that there has been a 70% rise in whiplash-based claims in the past 10 years, during which time the number of road traffic injuries reported has dropped dramatically and during which time Thatcham Research has identified that the safety of seats and headrests in cars has improved in something like 88% of vehicles on the road, up from 18%.

Seven hundred and eighty thousand personal injury claims arising out of road traffic accidents were reported in 2016-17. That is the totality. Of those, 670,000 were whiplash claims. It is an astonishing statistic, and the edifice, let alone its component parts, is enormous. As some have already observed, there is clearly widespread abuse.

We have heard reference to the need to test the validity of claims. I noted the reference of the noble Lord, Lord Beecham, to the impact on the courts of increased litigation. One has only to stop and imagine the impact of trying to litigate 650,000 claims in the courts in order that liability can be established and the claim can be tested in each case. The cost implications of that go wider than just the impact on the courts.

There was a call from the noble Lord, Lord Marks, to do more to test the validity of claims. Again, one of the difficulties is the sheer magnitude of the problem that we now face. He also alluded to the need for further measures in relation to aspects such as cold calling, which feed this enormous industry.

To address that point, the GDPR and the Data Protection Act 2018 ensure that, where personal data is obtained through an unlawful cold call, further use of that data will not be allowed, and indeed the ICO can impose very large fines. In addition, the Financial Guidance and Claims Act bans any legal person, not just claims management companies, from making unsolicited calls relating to claims services without having first obtained consent. Crucially, changes made by that Act make it explicit that any organisation in the United Kingdom cannot make unlawful cold calls and, in addition, cannot instigate others to do so on their behalf. Notwithstanding that, there is an enormous unregulated industry out there, much of it based abroad where we cannot touch it, and it continues with these practices. It is a major social problem and requires a policy decision.

Touching on the matter of the damages, the noble and learned Lord, Lord Woolf, referred to a highly complex judicial process, but I take issue with that. As my noble and learned friend Lord Mackay of Clashfern pointed out, the assessment of damages for pain, suffering and loss of amenity is essentially a jury question. Whether you give it to a judge or a jury is neither here nor there; it is essentially a jury question and it always has been.

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[The Deputy Speaker (Lord Faulkner of Worcester) (Lab)]

I advise the House that if Amendment 32 is agreed I shall not be able to call Amendments 33 and 34 for reasons of pre-emption.

[Lord Beecham]

My Lords, I shall speak very briefly to the amendments in my name and that of my noble friend Lady Chakrabarti. There is not, I think, a great deal of difference across the House on the need to ensure that there are proper medical reports and that the MedCo website should be used. The amendments would allow the Government to employ others with medical qualifications, in addition to MedCo, if that was thought to be helpful. Our amendments expressly state that there must be appropriate medical evidence of injury. The amendments are fairly straightforward: we do not dissent from those of the noble Lord, Lord Sharkey, and we hope that the Government will look sympathetically on the amendments here.

[Lord Marks of Henley-on-Thames]

I shall speak very briefly to Amendments 35 and 36, both of which concern medical reports. These and also Amendment 39, to which my noble friend Lord Sharkey spoke, are in my name. The purpose of Amendment 35 is simple. While it is very difficult to prove, there is widespread concern that the quality of medical reports and, sadly, sometimes the quality and genuineness of those who provide them, is low.

Of course, it is notoriously difficult for clinicians to give reliable evidence of whiplash injuries, both because the symptoms are self-reported—and reported differently by different patients depending on their robustness—and because patients’ accounts are hard to test objectively. Assessment of the likely duration of whiplash injuries, which becomes increasingly important in view of a cliff edge-type tariff, is also very challenging because the course of recovery is extremely difficult to predict and varies from patient to patient, again often dependent on no more than the robustness of the patient concerned. However, some clinicians develop considerable experience of these injuries, and a sensible system of accreditation, with the assistance of MedCo—which is already involved in assisting with the criteria for qualifications to produce medical reports, and quality assurance—ought to be able to encourage some consistency. That is why we seek the incorporation of a reference to MedCo in the legislation.

Amendment 36 would require the Lord Chancellor,

“by regulations make provision for the cost of obtaining appropriate medical evidence … to be recoverable by a claimant who succeeds … unless the court decides that such recovery would be contrary to the interests of justice”.

This is a topic on which I have sought reassurance from the Minister in previous stages, and I have received some. But the current position is that recoverability is a matter of discretion. With the proposed change in the small claims limit and the proposed new portal, we would like to hear a statement that it is intended that in all cases where a claimant, even one below the small claims limit, succeeds in recovering damages for pain, suffering and loss of amenity under the tariff, the cost of obtaining the medical report, which will be compulsory, will go with it, unless doing so,

“would be contrary to the interests of justice”.

--- Later in debate ---

[Lord Faulks]

My Lords, I could not hope to better that very compelling speech and I will not try to add any confusion to the analysis. I agree with what my noble friend Lord Hodgson said about the desirability of periodical payments, but all is not gloomy on that front. I regularly act for the NHS in settlements involving periodical payments even now, when it is probably less attractive for periodical payments than it has ever been, having regard to the change in discount rate. Nevertheless, the desirability for periodical payments is a point that the House is generally agreed upon and I entirely accept what my noble friend has said.

However, it has to be said—my noble and learned friend the Minister will confirm it—that the courts have power to order periodical payments by virtue of Section 100 of the Courts Act 2003, which built on the original Act—the Damages Act 1996. The fact that they do not is usually because both sides are advised at a reasonably high level, having regard to the size of the claim and the complexity of injuries, so on the whole the courts will stand back and not seek to impose on or insist against somebody’s periodical payments. None the less, it is something that all advisers will be very much bearing in mind, and I do not disagree with the suggestion that the rules of the court may well be useful to ensure that as far as possible these are considered by the courts, the parties’ advisers and the parties themselves.

I turn to the amendment tabled by the noble and learned Lord, Lord Hope, which, as he kindly said, built on something that I put down in Committee. He puts it much better in his amendment than I did. Of course, the variation in rate is something that was explored, as I said in Committee, by Jonathan Sumption QC, as he then was, in a case in Guernsey, when he decided that it would be appropriate in certain cases to have a different discount rate. As the noble and learned Lord, Lord Hope, said, the amendment makes the scope of the power clearer. There is much in what he says.

I look forward to what will apparently be a fruitful analysis by the noble Lord, Lord Beecham, when he comes to address his amendments. The review that he suggests in Clause 89 troubles me a little because, although all noble Lords are concerned to encourage periodical payments, I am not quite sure how that will work. There are all sorts of reasons why people may or may not have periodical payments. Certainly by changing the discount rate in an upward direction from, say, 0.75% to 1% or 2%, it is much more likely that they would go for periodical payments. However, there are a plethora of reasons why they will or will not seek periodical payments. It is quite a difficult thing for that review to provide the sort of clarity that I am sure the amendment is seeking to achieve. I look forward with interest to the explanation behind it.

[Lord Beecham]

My Lords, I shall attempt to provide some sort of explanation. The amendment seeks a review of what is actually happening in the light of the changing circumstances; it does not prescribe a particular solution. It offers precisely the opportunity for the professions to contribute to ensuring that the arrangements for periodical payments suit the client, particularly those who have suffered significant injuries and may be looking for lifetime support. It is very much an open request, and the expertise of the noble Lord—and others, of course—is very welcome in dealing with it.

Amendment 73A in my name also seeks a different review on the assumptions on which the discount rate itself is based and how investors have dealt with that over time. As will be seen, the review should, I hope, indicate whether the assumptions on which the discount rate is based need to be changed, and set out any recommendations.

This is entering new territory, and it is reasonable to have a report within a reasonable time—three years is probably long enough—to allow a proper examination of the impact of the new arrangements. For that matter, there is a question of course about how often there should be such a review. It would be difficult to prescribe, because interest rates and returns on investments change. We have been living in a fairly good period in terms of returns, but that may not last. So periodic reviews should be very much part of the agenda.

On the amendment proposed by the noble Lord, Lord Hodgson, I strongly support the position that he takes and hope that the Minister will feel sympathetic to it and to the other amendments in this group.

[Lord Keen of Elie]

I am obliged to noble Lords. In speaking to Amendment 49, I shall also address Amendments 50, 73, 73A and 89. Clearly, we welcome the support on all sides of the House for the appropriate use of periodical payment orders as a means of ensuring that the anticipated future needs of an injured person are met. Of course, periodical payment orders avoid many of the uncertainties inherent in taking damages for future loss as a lump sum.

My noble friend’s Amendment 49 would require new rules of court to be made to highlight features of PPOs that may make them more appropriate than a lump-sum payment for a person with a long-term injury who is risk-averse, who would otherwise receive a large award for damages for future pecuniary loss. In responding to the very similar amendment tabled by my noble friend in Committee, the Government underlined their support for the use of PPOs. However, they also recognised that claimants and defendants must be able to make choices, and that the best choice for any individual is dependent on the circumstances of their particular case. My noble friend Lord Faulks pointed out that under Section 100 of the 2003 Act it is open to the court to insist on a PPO being utilised. As far as I am aware, the court has never actually exercised that power, but it does exist in statutory form.

It is vital that claimants who have suffered long-term serious injuries are well informed as to the implications of their choice between a lump-sum payment and a PPO, irrespective of whether their particular case reaches such a stage that the court has to consider whether to order a PPO. The Government remain fully committed to ensuring that appropriate advice is available to claimants in all cases. We are working to encourage the use and understanding of PPOs. In particular, we will over the coming months provide, or at least endorse, guidance that ensures claimants fully understand the choice between a lump sum and a PPO, and investigate whether current advice received by claimants on the respective benefits of lump sums and PPOs is effective.

Over and above that, we have listened carefully to the points raised in Committee and in further engagement with noble Lords. I am obliged to many of them for their engagement in the period running up to this stage of the Bill. The Lord Chancellor has now written to the Master of the Rolls on this matter, and I am pleased to say that he has recently agreed in principle to the Civil Justice Council, with its specialist expertise, exploring the issue with a view to suggesting the most practical, beneficial steps to increase the use of PPOs within the current system. The Government are grateful to the Master of the Rolls for this.

Taken together, we believe that these steps will ensure that focused and practical action will be taken to identify effective reforms that will encourage the use of PPOs whenever they are suitable. These measures can be tailored to address specific identified problems. Rules of court may be part of the solution, but they will relate to the practice and procedure of the courts. That is the appropriate function of rules of court and their related practice directions, not providing guidance as to when one form of taking an award of damages might be better than another, which might be better in guidance itself. In light of that explanation, I hope that my noble friend would consider it appropriate to withdraw his amendment.

I turn now to Amendment 50 in the name of the noble and learned Lord, Lord Hope, which, as he says, would require the court to consider certain factors in deciding in an individual case whether it would be appropriate to take into account a different discount rate to that prescribed by the Lord Chancellor. As he pointed out, the wording in the present Bill reflects almost exactly the wording that appeared in the original provisions in the Damages Act 1996. The application of those earlier provisions is, of course, coloured by the decision of the Court of Appeal in Warriner, and the more recent decision in the Inner House in Tortolano. In light of that, I wish to give further consideration to the matter that the noble and learned Lord has raised to come to a view as to whether something might be done to tailor the wording to address the almost complete guillotine that is, in effect, in place in the two Appeal Court decisions.

Civil Liability Bill [HL]

Lord Beecham Excerpts

Report stage (Hansard - continued): House of Lords
Tuesday 12th June 2018 Lords Chamber

[The Earl of Kinnoull]

I will speak extremely briefly in support of the noble Lord, Lord Hodgson of Astley Abbotts. It seems to me that the Lord Chancellor would, very properly, have two questions in life that he would want to ask of an expert. The first is: “Do we need a review?” The second is: “Please will you conduct the review?” However, unless there is a standing panel, who on earth can he ask the first question of? I assume that he will not have anyone within the Ministry of Justice to whom he can turn and say: “Are we in circumstances where we need a review?” That is, in itself, a powerful argument for having a standing function that would allow him some access to expertise in this difficult and esoteric area. So, if the Minister is not minded to be amenable to the amendments proposed by the noble Lord, Lord Hodgson, how will that question be answered?

[Lord Beecham (Lab)]

My Lords, at this late hour I propose only to express agreement with much of what has been said from all round the Chamber in these debates. I am not as concerned as the noble Lord is about the role of the Lord Chief Justice. It does not seem at all inappropriate for the Lord Chief Justice to be consulted, which is all that the amendment suggests, in the course of making these very difficult decisions. The noble Lord need not worry very much about the consequences of that.

I am happy to support all the amendments that have been discussed and I congratulate noble and learned Lords on the progress that has been made. I assume that the Minister will be inclined to accept, and I certainly hope that that will be the case.

--- Later in debate ---

[The Earl of Kinnoull]

My Lords, I support the noble Lord, Lord Faulks, in his amendments. I should explain why I did not support them in Committee. In Committee, I listened to two eloquent speeches—one from the noble Lord and one from the Minister. They went carefully through the arguments about gaming and not gaming. I thought it was very interesting. I have a lot of knowledge in this area, but I did not actually know. I then spoke to a large number of practitioners on the insurance side to try to form my own view on whether three or five years was right for gaming. I am afraid I strongly formed the view that five years was right and therefore strongly believe that the noble Lord, Lord Faulks, is on to something that would greatly benefit all concerned. That is why I support the amendment.

More importantly, I have tabled Amendments 68, 70 and 71, which are to do with the timing of the second review. Broadly, they try to bring the timing in from what I thought was 180 days to what I thought was120 days. Those thoughts were prior to the arrival from the Minister’s office of the draft terms of reference of the expert panel, which I have in my hand. It is very interesting because the expert panel is established at the very moment that the review trigger is pulled—or, I suppose, immediately after. In fact, in a section entitled “Preparation”, before the review is triggered there is a call for evidence, which asks for all sorts of evidence all round.

That raises two issues for me. The first is that it extends the period of uncertainty. There is a 180-day review period and the call for evidence period, which I assume is at least 60 days—probably 90 days—to increase the level of uncertainty. During this uncertain period, the people who suffer are not the banks of lawyers on either side of the argument; the fee clock is still running. The people who suffer are the individuals who have the catastrophic injuries. So I worry about that.

The second thing I worry about is that if I were an expert, I would not want someone else to draft my call for evidence. I probably do not need the call for evidence because I am an expert. The idea that the poor old Ministry of Justice will be able to ask for all this expert evidence is wrong. The Ministry of Justice is not full of this sort of specialist in the esoteric areas around the setting of a discount rate. I do not believe that is a wise thing to do, so will the Minister look again at the draft terms of reference? Maybe, when we have our coffee to discuss timings, we could have a short session on the terms of reference so that we can try to align this. The basic point behind Amendments 68, 70 and 71 is a desire to allow enough time for a panel of experts very well versed in discount rates to arrive at the correct answer, without extending that time unreasonably. The uncertainty is bad for the victims of the catastrophic injuries.

[Lord Beecham]

My Lords, I am inclined to agree with the noble Earl about Amendments 68 and 71, but I am afraid I remain unconvinced about the five-year period as opposed to the three-year period, and find myself in the rather strange position of agreeing with the Minister. It is not as though all claimants will be five years off a review. Some will be and others will not necessarily be. There will be different timescales for individual claims, and I do not think five years is necessary to protect the integrity of the system. Some people will try to game, whatever the period. Five years is not necessarily more likely to protect against that than otherwise. Rather unusually—I am sure the noble and learned Lord will stick to the three-year period in the Bill—I will have to agree with him.

I should like to say at the end of this very long day that the House has done its usual very good job of scrutinising difficult legislation. It is a little late to try to recall everything that we have discussed and agreed, but a good job has been done today and I hope the Bill will be improved. The Minister has offered to consider a number of matters before Third Reading—and, in any case, the Bill will go somewhere else in another week’s time and come back to us eventually for further consideration. There may be changes that we have to consider at that stage.

On behalf of these Benches—or what is left of us—I thank the Minister for his running of the Bill. He has been more than willing to talk to colleagues, even when some of them, like me, are rather slow on the uptake in this rather technical area. It is not one where, in practice, I had very much to do with cases at this level, as a personal injury lawyer—thank heavens. Around the House, we have heard some very important contributions from Members from all sides, and there is every prospect of further changes being made at Third Reading or in another place on the basis of the level of debate, discussion and argument that we have had. That is a signal tribute to the work of the House.

[Lord Keen of Elie]

I am obliged to noble Lords for their contributions, not only to this grouping but to the debate as a whole that has taken place this afternoon and evening. In speaking to Amendment 54, I shall speak also to Amendments 57, 61, 62, 67, 68, 70 and 71. I do so because, although they were not formally moved in this grouping, the noble Lord, Lord Marks, made it clear that he was addressing the amendments in this group when he spoke earlier. I appreciate his determination not to repeat himself.

As I explained in Committee, the choice between three and five years is not one of principle. The three-year period adopted in the Bill represents a compromise approach based on the responses received to the March 2017 consultation, which included a wide range of views, ranging from automatic reviews at short intervals up to a 10-year fixed maximum. We have listened carefully to the arguments this evening and in Committee from noble Lords about the potential for the gaming of the system, depending on whether there is a three-year or five-year maximum between periods.

I note the observations of the noble Lord, Lord Beecham, who brought himself to agree with the Government on this matter. Tempted as I am to move away from the Government’s position in light of that, I maintain that, overall, it would be appropriate for us to look to three years. But there is no clear-cut case, and I am perfectly content to speak again to noble Lords before Third Reading if they wish to make further representations to the Government with regard to the period. So I do not close the door on that, but our position is that three years would be appropriate, and we would have to be persuaded by something that might be termed “new evidence” before we would consider moving away from that position. However, as I say, the door is open.

Amendment 67 largely replicates the provisions already in the Bill for the conduct of a review, but applies them only to the second and subsequent reviews, in light of Amendments 65 and 66. But Amendment 67 in isolation makes a relatively small number of changes to the procedure for the conduct of the second and subsequent reviews. First, it adopts the language of advice rather than response to describe the panel’s reply to the Lord Chancellor. Secondly, it makes clear that it is not just the question of whether the rate is to be changed but what the new rate is to be that is subject to the provisions for determining the review in paragraph 3 of the new Schedule A1—and that, in reaching these decisions, the Lord Chancellor should have regard to the advice from the panel. Finally, that amendment would introduce a requirement that the Lord Chancellor will consult the panel within 10 days of the start of the 180-day period for the completion of the review. This is new, but noble Lords’ proposals for the first review contain a similar provision, albeit with a 25-day period, and we are conscious of that.

Rape Trials

Lord Beecham Excerpts

Wednesday 6th June 2018 Lords Chamber

[Lord Keen of Elie]

My Lords, I am not a regular viewer of the television and I am not aware of the programme to which my noble friend refers. However, at present there are no indications that the criminal cases review operation is not operating in accordance with its remit or that it is not capable of discharging its functions.

[Lord Beecham (Lab)]

My Lords, the chief constable of Surrey has described the situation as having had a “catastrophic effect”. It is two years since warnings were first given about this problem. Will the Government now ensure that further inquiries are made for the period before that time to see whether other cases need to be dealt with? Will he also ensure that a view will be taken not just in relation to sex offences, which have been the subject of the present findings, but across the field of criminal offences? Clearly, there is a risk that we will see the same kind of failings affecting other offences.

[Lord Keen of Elie]

My Lords, a joint justice systems inspectorate investigation on disclosure issues took place in 2016 and the report was published in July 2017. We were in the process of implementing a series of recommendations when a number of further cases arose in early 2018, and that is what has given rise to the Attorney-General’s determination that there should be a review. We will await the outcome of that review before taking further decisions with regard to disclosure. However, disclosure is not of course limited to cases of rape or other sexual assault. We appreciate that this issue has to be addressed across the board so far as the criminal justice system is concerned.

Courts: Modernisation

Lord Beecham Excerpts

Wednesday 6th June 2018 Lords Chamber

[Lord Keen of Elie]

My Lords, I entirely agree with the observations of the noble Earl.

[Lord Beecham (Lab)]

My Lords, the Government’s concept of modernisation of the court system seems to include court closures up and down the country and a reduction in the availability of legal aid, which has led to a growth in the number of litigants in person, causing great delays in the courts. In the circumstances, is it not the Government’s duty to ensure that any modernisation of the system is reflected in securing access to justice as opposed to making some fairly minor financial savings?

[Lord Keen of Elie]

My Lords, of course what is paramount in the context of this reform is access to justice. As the reform programme progresses, we expect that we will need fewer courts and we will continue to review our estate to make sure that it is able to maximise the benefits of the reformed courts and tribunal service.