Social Action, Responsibility and Heroism Bill

Debate between Lord Hunt of Wirral and Lord Hodgson of Astley Abbotts

Tuesday 6th January 2015 Lords Chamber

[Lord Hodgson of Astley Abbotts (Con)]

My support for this Bill has been very well documented. Notwithstanding the attacks on it from noble Lords and, especially, noble and learned Lords, I continue, albeit as a non-lawyer, to believe it will play a useful role in encouraging, or at least not discouraging, individuals getting involved and participating and in consequence strengthening our civil society and so improving social cohesion. I fully admit there are aspects of the Bill which overlap with the provisions of the Compensation Act and that the provisions of the Bill will not provide a complete solution to what some people argue risks becoming an increasingly atomised and introverted society. It is just as important that the Bill will help with better insurance provision and the busting of myths.

One of my principal reasons for supporting this short Bill is that it provides clarity; it uses short, uncomplicated language that is comprehensible to the regulars in the saloon bar of the Dog and Duck. On Report, this approach seemed to come under attack from what seemed to be two diametrically opposed reasons, which have started to reappear in our debate this afternoon. The first approach, which was adopted by the noble and learned Lord, Lord Lloyd, and which was supported on Report to some extent by the noble Lord, Lord Pannick, at col. 17, which I will not quote this afternoon, appeared to argue that this legislation was superfluous in that judges could always be relied upon to take into account the factors that form the subject of the Bill. Later on in our debates, the focus changed and a number of noble Lords, in particular the noble and learned Lord, Lord Walker of Gestingthorpe, at col. 46, argued that the provisions of the Bill were too wide and required focus and definition to guide the courts and judges.

This amendment in the name of the noble and learned Lord, Lord Brown, seems to be moving towards the second approach. I therefore have concerns about the impact this amendment may have upon the clarity of the Bill, at least as it is seen through the eyes of the regulars in the saloon bar of the Dog and Duck. I have listened carefully to the two noble Lords who proposed the amendment, and I hope that they will forgive me if I say, again as a non-lawyer, that I have concerns about what they propose. My question to my noble friend on the Front Bench is: do we need three words in the place of the current one word? “Activity” has a simplicity and a clarity which may be clouded by those additional words. Generally, the shorter the better, so my instinct is to resist this proposal. However, I await his further advice.

Before I conclude I turn briefly to government Amendment 2. I am grateful to my noble friend for having taken away the amendment I proposed on Report on 15 December and for having responded so positively. The amendment was originally put down in the name of my noble friend Lord Hunt of Wirral, whom I am glad to see in his place this afternoon and who unfortunately was not able to be present on Report. He will be able to speak far more eloquently about this than me. I close by repeating my thanks to my noble friend on the Front Bench. The change that he is proposing this afternoon will improve the balance by encouraging people to get involved but without encouraging them to do so in a thoughtless or irresponsible way.

[Lord Hunt of Wirral (Con)]

My Lords, I declare my interest as a partner in the global commercial law firm DAC Beachcroft and refer to my other interests in the register.

However, for the purpose of this short debate I add that I have just this morning returned from an expedition to Antarctica, where I must say my boundaries were severely tested. I found myself in the company of adventurers, and I have to tell the Minister that they greeted the Bill with enthusiasm. They took the view that we have achieved the wrong balance, with too much emphasis on health and safety, which, sadly, has led to the cancellation of a lot of trips similar to the one that I went on—I now hold an award and a certificate for following in the steps of Roald Amundsen. I did not go quite as far as he did, but I feel that I have seen the effect of taking risks on the development of one’s own personality and abilities. Younger people certainly benefit from those boundaries being tested. Therefore I bring to the Minister unbridled enthusiasm for the Bill and a slight questioning of why senior lawyers have found fault with it so much.

I speak from my own experience, having dealt with the Compensation Bill, which is generally accepted as a good Bill. At the time, it came under severe attack from some of the most senior lawyers in this House, who tried to explain that it did not add anything and that it should all be left to the judges. They asked why on earth we were repeating the judgment of the very senior noble and learned Lord, Lord Scott of Foscote, who set out the position very clearly indeed, which we repeated in Clause 1 of the Compensation Act 2006. But the general view is that that has done a great deal to calm people down and to stop the cancellation of a lot of adventure holidays.

Finally, I say to my noble friend the Minister how pleased I am that he has decided to delete the word “generally” and insert the word “predominantly”. I thought about all sorts of other words that could be used, as he may have guessed, but I think that the word “predominantly”—for someone to have to demonstrate “a predominantly responsible approach towards protecting the safety or other interests of others”—really clarifies the position brilliantly. I am very grateful to my noble friend for proposing that amendment today.

All that I will say to the other lawyers in the House, who are far more senior than I could ever aspire to be, although I have been in the same firm now for 50 years, is that I bow to their judgments—indeed, I have to observe them and listen to them on many occasions. However, I question for a moment whether it might not be more acceptable for the House to recognise that this Bill will do much to further the opportunities, particularly for younger people, to take the sort of risks that perhaps at my age I should never even have dreamt of, such as traversing the crevasses that I did over the weekend. I think that it did me a lot of good and will do them a lot of good, too.

Consumer Rights Bill

Debate between Lord Hunt of Wirral and Lord Hodgson of Astley Abbotts

Monday 24th November 2014 Lords Chamber

[Lord Hodgson of Astley Abbotts]

My Lords, I shall speak also to Amendments 41M and 41N. We are still concerned with the implications of Schedule 8, and here we get to the vulgar question of the distribution of the money. This group of amendments is designed to ensure that professional advisers benefit financially only commensurately with the take-up by consumers.

As presently drafted, proposed new Section 47C(5) requires that,

“any damages not claimed by”—

consumers—

“within a specified period must be paid to the charity … prescribed by … the Lord Chancellor”.

So far, so good, but subsection (5) is subject to subsection (6), which allows the tribunal to order that these unclaimed damages,

“be paid to the representative in respect of all or part of the costs … incurred”,

which will presumably include legal and other fees. This surely cannot be right or just. Let us take the case of an opt-out class that assumes that 100,000 consumers were affected. Let us assume that only 20,000 consumers claimed. Under the Bill as drafted, the professional advisers could be paid 100% of their fees, even though only 20% of the affected consumers received any compensation. Amendment 41L would remove the let-out available to the CAT in subsection (5) and Amendment 41M would require that costs be paid out only in strict ratio to the payments to consumers.

My amendment has another useful by-product. Under opt-out class actions, no one can tell precisely how many consumers have been affected because they do not have to reveal themselves. Presumably the representative of a class and the CAT will agree an estimate of the likely number. In the Bill, however, there is no incentive—perhaps even the reverse—for the representative to seek out and provide compensation to those consumers affected. It must surely be important for the representative to have to make a genuine effort to find the disgruntled consumers, and Amendment 41M would give a direct incentive so to do. If we do not do this, we risk replicating what have become known in the US as “coupon settlements”, under which advisers take 100% of their fees and offer affected consumers the sum awarded, say $20, in the form of a reduction on their next purchase in the store affected. Many consumers do not claim; even fewer who have claimed ever use the coupon.

Amendment 41N would merely replicate the provision in respect of new Section 49A where a collective proceedings order has been made. This seems equally important because, as I understand it, this involves a case where parties have agreed a settlement without going through the difficulties, expense and time involved in proceedings and then go to the CAT for approval of the deal they have struck. There must be a real danger that in the course of negotiating the settlement the professional advisers will suggest that a useful part of the settlement could be that their fees are paid in full. A defendant may then be inclined to accept that requirement in an attempt to ensure a speedy settlement.

This group of amendments, like the others which we have been discussing tonight, are designed to put consumers and not professional advisers at the centre of our deliberations. They give the tribunal some additional statutory protection against the pressures that will, I fear, be brought to bear on them. I beg to move.

[Lord Hunt of Wirral]

My Lords, I strongly support my noble friend for all the reasons I outlined a little earlier. His Amendments 41L to 41N seek to promote the interests of the consumers above those of others and should therefore be warmly welcomed. If the representative person and the lawyers and funders working with them are incentivised to find enough of the consumers to make the compensation process worth while, that must be the right way forward. Surely the worst thing we could do is create a system that is intended to provide greater benefit to consumers and succeeds in taking money from the guilty parties, but then fails to pass it on to the consumers themselves. The case is so strongly made, and I support it wholeheartedly.