Civil Liability Bill [HL]

Debate between Lord Sharkey and Lord Faulks

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

[Lord Faulks]

My Lords, my amendment is Amendment 59. Everything that I would have said has been said very well by the noble Earl. It is clear that we need to get on with this. The cost is extortionate. There was general agreement at Second Reading that any day’s delay was too many. I accept that there are things that have to be done, but not so many things and over such a long time as is currently within the terms of the Bill. The Minister made some encouraging noises at Second Reading and I hope he can go beyond those in response to this amendment.

[Lord Sharkey]

My Lords, we have Amendments 60, 64, 67, 68 and 71 in this group. They all have the same purpose. All are aimed at bringing forward the date of the first review of the PIDR and I want to thank the MDDUS for its help in drafting.

Amendments 60, 64, 67 and 68 each bring forward, in the appropriate place in the Bill, the start date for the first review of the PIDR to 30 days from commencement, which now seems rather timid in light of the proposals put forward by the noble Earl, Lord Kinnoull, and the noble Lord, Lord Faulks. However, as things stand, the Bill specifies a 90-day period from commencement within which the first review must start. The likely timing for the new rate determination to take effect is set out on page 3 of the Minister’s letter to us of 30 April. He said:

“Assuming the Bill receives Royal assent this year and that the provisions are brought into force within two months, the statutory timetable means the first review would be completed before the end of 2019”.


That is to take too long. Specifically, the 90-day period from commencement to the start of the first review is too long, so is the 180 days from the review start to its conclusion, and so is the unsatisfactory commencement provision in Clause 11(1), which allows the Secretary of State to choose any commencement date that he likes.

Our Amendment 71, which I will come to an a moment, deals with the 180-day period and the noble Earl’s later amendment in this group, Amendment 94, to which he has already spoken, deals with the commencement date issue. For the moment, I will speak only to the amendments that deal with the period within which the rate review must begin after commencement. The Bill specifies 90 days. We see no reason why it should be as long as that and our amendments reduce that period to 30 days.

The protracted timetable imposed by the Bill is unnecessary and inflicts real damage. Most noble Lords would agree that the current PIDR is causing real commercial harm. It is also causing real and irreversible financial damage to the NHS. For each month that the current rate operates, the NHS must accrue an additional £300 million against future clinical negligence claims. Those are enormous sums that would be much better spent on front-line activity in the NHS.

Amendment 71 also aims to bring forward the date of the first review. It addresses the length of the consultation period, who must be consulted and the length of the whole review period. Amendment 71 replaces paragraph 2 in new Schedule A1, inserted into the Damages Act 1996 by Clause 8(2) of the Bill. Paragraph 2 as it stands sets out the various elements of the timetable for conducting reviews of the PIDR and the timetable applies to the first and subsequent reviews. New paragraph 2 also sets out who must be consulted in the course of the reviews. It stipulates that the determination of whether to change the rate must be within the 180-day review period. That period must start no later than 90 days following commencement, which is left entirely to the discretion of the Secretary of State.

Amendment 71 replicates new paragraph 2, except that it addresses itself only to the first review and makes the following changes: it shortens the review period from 180 days to 90 days; it shortens the 90-day consultation period to 60 days; and it restricts the consultation for the first review to the Government Actuary—or his deputy if the office is vacant—and the Treasury. In other words, there is no consultation with the expert panel defined in paragraph 5 of new Schedule A1. Actually, it follows the original proposal made in the September 2017 Command Paper. Amendment 71 then goes on to restore all the existing provisions of paragraph 2 so that they no longer apply to the first review but to every subsequent review.

Our amendments in this group, together with Amendment 94 of the noble Earl, Lord Kinnoull, would significantly bring forward the review. By the Minister’s estimate, the Bill would produce the first review by the end of 2019 if all goes well. Our amendments, taken together, would produce the first rate review by mid-2019, at least six months earlier. This is what we should do and I commend these amendments to the Committee.

--- Later in debate ---

[Lord Sharkey]

I have in this group Amendments 74, 87 and 88. Amendment 74 is a probing amendment. It provides the Committee with an opportunity to debate the value of the Lord Chancellor having a decisive role in determining the PIDR. As things stand, that is what he or she has—a decisive role. It is true that the Bill will create an expert panel to advise him and that it sets out the assumptions on which he must make that determination, but it is the Lord Chancellor who makes the decision. This poses the obvious question—why? What are the merits of having a politician making this judgment? What merit is there and what dangers might there be in having this decision in the political arena?

It is true, of course, that the rate decision has many serious consequences—for claimants but also for insurers and for the NHS, as we have discussed. These consequences are far reaching—but so are the consequences of changes to the Bank of England base rate. Changes in the base rate affect everyone who has a mortgage, every borrower and every saver. Some recent changes to the base rate have had dramatic effects on millions of people and continue to do so. For example, millions of people with savings have been dramatically disadvantaged by rate changes since 2007. Equally, millions of mortgage holders have benefited enormously from these changes. But these decisions on the base rate were taken not by politicians but by the MPC—an expert panel. If decisions on such wide-reaching and consequential matters can be taken by an expert panel without political involvement, why have political involvement in the PIDR? Why have the Lord Chancellor involved?

I raised this question when I met Ministers to discuss the Bill. The noble and learned Lord, Lord Keen, commented that the Lord Chancellor’s role was a matter of government policy. I understood that. However, we did not have time to go into the question of why it was government policy or whether there were better alternatives. We did not discuss what grounds the Government might have for maintaining the policy or whether any assessment had been made of alternative arrangements. We now have a little more time to discuss the issue and the merits of removing this role from the reach of politicians for reasons analogous to removing control of the base rate from them. I look forward to the Minister’s reply.

Amendments 87 and 88 are straightforward. They deal with the expert panel itself, as set up in paragraph 5 of the new Schedule A1 to the 1996 Damages Act, inserted by Clause 8(2). This panel is to be consulted by the Lord Chancellor in determining the rate. The Bill specifies the members of the panel as the Government Actuary, or his deputy if the office is vacant, who is to be chair, and four other members appointed by the Lord Chancellor, one of whom must have experience as an actuary, one experience of managing investments, one experience as an economist, and one experience in consumer matters relating to investments. All these roles seem pretty well defined, except possibly the last one. Could the Minister flesh that out a little? Can he give examples of the kind of persons who might qualify as having,

“experience in consumer matters … relating to investments”?

It seemed to us that the panel might benefit from an additional member with different expertise. Amendment 87 would add a member who is medically qualified and has experience of changes in medical science and their effects on life expectancy. The PIDR has a very significant effect on the damages awarded against the NHS for clinical negligence, as we have mentioned. Payouts last year amounted to £1.7 billion and the amount has been rising steeply in recent years.

Awards for clinical negligence frequently have to take into account estimates of life expectancy. The Committee will know that the PIDR has a very significant effect on damages awarded against the NHS for clinical negligence. As I said, payouts amounted to £1.7 billion last year, and much of this was determined by reference to life expectancy. Of course, actuarial methods can and do give an estimate of life expectancy, but for the most part this will be based on extrapolations of current trends. What might not be taken into account is the likelihood of discontinuous change brought about by the speed of advances in medical science. We live in a golden age of medical research. It is not a total exaggeration to say that one hears nowadays almost daily of some remarkable medical breakthrough that will in due course benefit patients by curing disease, improving quality of life and prolonging life itself.

It seems to us that the expert panel would benefit from having first-hand, direct experience of these new treatments and their likely effects. A member with such experience would make a valuable contribution to any assessment of the role played by life expectancy in determining awards. I look forward to the Minister’s thoughts on the matter.

Amendment 88 would impose a duty on the Lord Chancellor to secure that,

“each of the appointed members approaches the work of the expert panel as an expert with the object of recommending a rate of return that is fair to … both claimants and defendants”.

It could be argued, for example, that the last change to the PIDR was not fair to both claimants and defendants in that it produced a huge rise in the amounts awarded to claimants. And it works the other way: there might be rates that a panel thought unfair to claimants. If so, it would be important that that view helped form the recommendations. We see our amendments as allowing a dispassionate view of the effects of a change to the PIDR for both claimants and defendants, and this should have an explicit role in informing the panel’s recommendation. I hope that this is not controversial. In fact, I rather hope that the Minister will be able to demonstrate that the amendment is unnecessary and that the requirement for fairness is somehow already built into the procedure.

[Lord Faulks]

My Lords, the question of whether this should be a political decision or one taken by the panel is difficult. I thought carefully about this, as I am sure other noble Lords did. Ultimately, I respectfully submit that it should be a political decision taken by the Lord Chancellor. Of course, that decision will be critically informed by what the panel tells him or her. The provisions in the Bill provide that, when a Lord Chancellor makes a rate determination, he or she must,

“give reasons for the rate determination made, and … publish such information about the response of the expert panel established for the review as the Lord Chancellor thinks appropriate”.

My noble and learned friend will correct me if I am wrong, but, if the Lord Chancellor were to take a perverse view, ignoring all the advice or not giving sufficient reasons for it, he or she would potentially be liable for judicial review. Ultimately on the question of accountability, this is a political decision and a politician should be answerable for it.

Of course I yield to no one in my admiration for doctors—we have a number of distinguished doctors in your Lordships’ House, and they are the experts who can assist the House on questions of life expectation. However, with great respect, that is not quite the question that the panel is there to answer; it is there to answer the question of yield for investment having regard to an investor of reasonably cautious nature. While some doctors might have a view about this, I am not sure that questions of life expectation have anything to do with what is essentially an actuarial or financial calculation. Therefore, I am afraid that I am unable to support that suggestion.

Criminal Finances Bill

Debate between Lord Sharkey and Lord Faulks

Committee: 1st sitting (Hansard): House of Lords
Tuesday 28th March 2017 Lords Chamber

[Lord Sharkey (LD)]

My Lords, I will speak to Amendments 10, 13, 20 and 22 to 25 in this group, all of which are probing amendments. Amendment 10 modifies subsection (4) of the newly inserted Section 362B of the Proceeds of Crime Act 2002. The subsection sets out one of the three conditions that must be satisfied before an unexplained wealth order may be made:

“The High Court must be satisfied that … the respondent is a politically exposed person, or …there are reasonable grounds for suspecting that … the respondent is, or has been (whether in a part of the United Kingdom or elsewhere), or … a person connected with the respondent is, or has been, so involved”.


As I read it, it means that simply being a politically exposed person satisfies the condition. That is enough for the High Court: it does not need,

“the reasonable grounds for suspecting involvement in serious crime”,

to be satisfied as well. That seems unnecessarily and dangerously broad.

It is probably unnecessary to remind the Committee that we are all PEPs. So are our families and our close associates. As the Government have made clear, and as the FCA is about to say in guidelines, most Back-Benchers, their families and associates should not require additional due diligence. Given that, we or our equivalents abroad should not be exposed to a harsher, more extensive and more intrusive regime. By replacing “or” with “and”, and by qualifying the definition of PEPs by inserting,

“who merits additional due diligence according to Financial Conduct Authority guidelines”,

my amendment removes this harsh, special treatment of non-EEA PEPs. For the condition to be fulfilled, the amendment requires that the PEPs are not ordinary PEPs but merit this additional due diligence and that there should be reasonable grounds for suspecting involvement in serious crime.

Amendment 13 removes the exemption of UK and EEA PEPs from the conditions in subsection (4) of new Section 362B, in order to give the Minister the opportunity to explain why UK and EEA PEPs should not be treated exactly as all other PEPs.

Amendment 20 gives the Minister an opportunity to clear up an apparent anomaly. On page 5, subsection (2)(b) of the newly inserted Section 362E sets out the penalty for failure to respond properly to an unexplained wealth order. For summary conviction in England and Wales—and later, we see, in Scotland too—the penalty is imprisonment for a term not exceeding 12 months, or a fine, or both. However, on the very next page, in subsection (2)(c), the penalty on summary conviction in Northern Ireland for exactly the same offence is set at imprisonment for a term not exceeding six months, or a fine, or both. So in England and Wales and Scotland, you can go to prison for up to 12 months, but in Northern Ireland it is up to six months. Why? I would be grateful if the Minister could explain.

[Lord Faulks]

Before the noble Lord goes on to the next amendments, could he help the Committee with one point? He points to the position of PEPs and describes the potential vulnerability that quite ordinary people might have to these orders, but does he not think that subsection (3) of new Section 362B is a sufficient protection? It provides that the High Court,

“must be satisfied that there are reasonable grounds for suspecting that the known sources of the respondent’s lawfully obtained income would have been insufficient for the purposes of enabling the respondent to obtain the property”.

That provides a hurdle that has to be surmounted, as well as establishing that someone is a PEP.

[Lord Sharkey]

If it were absolutely clear that you cannot obtain an unexplained wealth order without satisfying that condition, I would be happy, but I am not entirely sure that it is, and I would welcome the Minister’s confirmation that the noble Lord is correct.

Amendments 22 to 25 will allow the Minister to point out—if other noble Lords do not do so beforehand—where I have entirely missed the point. They refer to page 7 and subsections (2), (3) and (4) of new Section 362H. These subsections allow rules of court to provide for the practice and procedure to be followed relating to unexplained wealth orders before the High Court in Northern Ireland. There are similar but not identical subsections later in the Bill dealing with the same matter in Scotland. However, the Bill seems to be silent on how these matters are to be dealt with in the English and Welsh courts. I am sure I have missed something obvious here and would be grateful for enlightenment from the Minister.

There is another apparent anomaly in the sections dealing with the variation or discharge of an unexplained wealth order. I notice that the provision in Scotland is significantly different from that in Northern Ireland. On page 18, line 43, to line 1 on page 19, the Bill allows applications for variation or discharge to be made by “Scottish Ministers” or by,

“any person affected by the order”.

That is not the case for Northern Ireland, where application can be made only by the enforcement authorities or the respondent. Why is there this difference between Scotland and Northern Ireland? My Amendment 24 makes the process in Northern Ireland the same as in Scotland but, again, what about England and Wales? I look to the Minister to put me right on all this.

Criminal Justice and Courts Bill

Debate between Lord Sharkey and Lord Faulks

Monday 20th October 2014 Lords Chamber

[Lord Faulks]

My Lords, I thank the noble Lord, Lord Sharkey, for his continued concern and interest in this matter, and for his elegant and accurate summary of the progress of the amendment and the resultant meetings that took place with me, my noble friend Lord Bates and Home Office officials. I hope that the noble Lord is reassured that the Government now recognise his concerns, which have been eloquently supported this evening by my noble friend Lord Lexden, as they were in Committee.

The Protection of Freedoms Act reflected the Government’s determination that people’s lives should not be unfairly blighted by historical convictions for consensual gay sex with people over 16. However, where someone has died, these provisions would not have the same effect. The Government accept that, as well as removing obstacles for the living to find work, there is a recognition that a disregard puts right a historic wrong, and that this would apply to the deceased as well as the living.

Following the helpful discussions the noble Lord, Lord Sharkey, had with me, my noble friend Lord Bates and Home Office officials, the Government are willing to explore ways of achieving disregards for the deceased, over a longer timescale. What I mean by “over a longer timescale” is not while this Bill is going through its process and not by Third Reading, as I understand my noble friend was indicating. He may ask why not. We have made some progress, but officials would want to carry out a full and proper assessment. Some issues that require attention include a precise definition of who could apply on behalf of the deceased. We have made progress in that. There is an assumption that the amount of applications will be manageable, but we want to carry out more work to obtain greater confidence on this, as each application does place a significant burden of work on the police in tracing local records. On documentary evidence, the effect of a disregard is not clear, as there are no police records to delete, and we would not want to destroy historic records from the National Archives.

These points were touched on in our meetings, but officials are most anxious that all those matters should be completely resolved before proceeding to legislate rather than to impose too heavy a burden, when we ask them to focus on so many other issues. We want to ensure that the decision to disregard maintains the current exacting standard to ensure that only the deserving are granted a disregard. Of course, there are very deserving cases.

While I cannot accept this amendment and I am not committing to introduce such a change in this Bill, the Home Office repeats its commitment to consider this matter and would be happy to include the noble Lord, Lord Sharkey, in any further discussions. He has done the House a great service by bringing this to our attention but I hope the assurances that I have given will allow him to withdraw his amendment.

[Lord Sharkey]

I thank the Minister for his reply and am grateful for the progress that we have been able to make in advancing the case for the posthumous disregard. I would have been even more grateful had he been able to say that the matter could be dealt with at Third Reading, but I understand that it is important to do this in a timely and proper manner.

I would like to know, however, what timescale is envisaged. We know what we are trying to check; we know what assessments we have to make. I wonder whether the Minister can give me some sense of how long it might take and perhaps some reassurance that, when it comes to discussions about the scope of Home Office Bills, there will be some liberality in the interpretation of “scope” to enable an amendment, if we get to that point, to be brought forward in a forthcoming Home Office Bill.

Having said all that, I repeat that I am grateful for the help given by the Ministry of Justice and the Home Office. I hope that we can make fairly rapid progress from hereon. I beg leave to withdraw the amendment.

Criminal Justice and Courts Bill

Debate between Lord Sharkey and Lord Faulks

Monday 21st July 2014 Lords Chamber

[Lord Faulks]

My Lords, this has been a short, very well informed and powerful debate. I pay tribute to my noble friend Lord Sharkey and others for all they have done relating to Alan Turing and to the amendment to the Protection of Freedoms Act. That Act reflected the Government’s determination that people’s lives should not be unfairly blighted by historical convictions for consensual gay sex with people aged over 16. The House is grateful too to my noble friend Lord Lexden for his usual accurate and illuminating historical analysis of the origins of this sad state of affairs, which gave rise to so many convictions and caused so much unhappiness.

A disregard results in a person’s relevant convictions being removed from the records held by the police and the courts. Those convictions will therefore no longer appear on a criminal records check and the individual never has to declare them, in any circumstances. However—this is where the amendment is concerned—where someone has died, the intended effect of these provisions would apply. The provisions in the Protection of Freedoms Act are designed to help living individuals get on with their lives free of the stigma of the disregarded offence. I fully appreciate and sympathise with the intention behind the amendment, but the Government are concerned that there would not be a practical benefit to the change. A disregard would not allow the applicant, on behalf of a deceased person, to say that the deceased person was incorrectly convicted, nor that he or she has received a pardon. It is important to remember the rationale that lies behind this. The objective of the Protection of Freedoms Act, in disregarding certain offences, is that they should no longer affect a person’s life or career. The intention is to support living people who are disadvantaged when they apply for work, rather than to set the record straight.

The Government are still concerned that such an amendment would introduce a disproportionate burden on public resources; reference was made to a similar answer given from the Dispatch Box, not by me but by another Minister. For living people, the Protection of Freedoms Act will amend the data used for criminal records checks for living people. When someone is deceased, the offence is more likely to have taken place prior to the establishment of the National Policing Improvement Agency’s names database. Identifying appropriate records would be a lengthy, expensive and uncertain task. There is less certainty that any records can be identified, and those that are found may be insufficient to be sure that offences were consensual and with a person aged over 16.

The Government are concerned this would place a disproportionate burden on existing resources at the Home Office and on the police service. My noble friend Lord Sharkey referred to the answer he was given by a Home Office Minister to a question about the number of people who had made applications, following the estimate of 16,000. I am told that it is true it has now risen to 192 from 185. However, noble Lords will appreciate that departments are operating under severe financial restrictions. While we believe that the cost of dealing with applications from those whose lives continue to be affected is justified in the current climate, we cannot agree that costs, which we believe will be significantly higher for each application, could be justified in trying to deal with the records of those who have died. In our view, the limited resources should be directed at those who continue to have difficulties as a result of their conviction or caution for these offences. I need hardly stress that there is a difference between a pardon and a disregard.

The noble Lord, Lord Beecham, made an interesting, bold suggestion. He rightly predicted that I was unlikely to swallow the suggestion from the Dispatch Box, sincerely though it was made. My initial reaction is that, if there were to be a blanket amnesty, as I think he was proposing, we would need to go through this case by case to establish whether this act was consensual and therefore within the scope of the Act.

Therefore, while having considerable sympathy with all that lies behind the amendment, the Government are still not in a position to accept it as tabled by my noble friend Lord Sharkey. However, I appreciate that there is a feeling that something ought to be done to right a historic injustice. I can certainly—without, I hope, raising any expectations—at least agree to facilitate a meeting with the Minister to discuss this matter further. However, I emphasise that I cannot raise expectations and the position at the moment is precisely as I have outlined it. In those circumstances, notwithstanding the arguments that have been put forward, I hope that my noble friend will be prepared to withdraw his amendment.

[Lord Sharkey]

My Lords, I am very grateful to all those who have spoken in favour of the amendment. They have, in my view, spoken persuasively and eloquently. I cannot help feeling that in many ways the Minister is simply missing the point. He talks in terms of practicality and cost; that is essentially the argument that he is putting forward. As I pointed out a few moments ago, there are elements to this other than practicality and cost. There is the notion of moral duty; there is the notion of taking into account the feelings of the friends and relatives of those convicted but now dead; and there is the notion of the devaluation of the disregard for those convicted but still alive if the purpose of this is purely practical and contains no element of public recognition for the wrongs done to these people.

I am sorry that the Minister and the ministry have chosen to take this path. It seems to be legalistic, mean-spirited and ungenerous. I am sufficiently encouraged by the words that I have heard around the Chamber this evening to say to the Minister that, although I will now withdraw the amendment, I will return to it on Report and perhaps use the opportunity to test the opinion of the House at that point.

I finish by saying that of course I would welcome a meeting with the Minister. In fact, I wrote to the ministry on 3 July proposing that. I got a letter back last Thursday saying, “We have passed your letter on to the Home Office because of course the Protection of Freedoms Act belongs to the Home Office”. There was no mention of a meeting or any kind of consequent follow-up; it was just a case of “It’s not our business”. I knew that the Protection of Freedoms Act belonged to the Home Office but I also knew that the Minister was going to be answering this debate, which is why I wrote to him. I expected him, or his department, to answer on behalf of the Government and not simply to say, “Well, over to them and let’s not talk about a meeting”. I am now very glad to hear that he is talking about a meeting. Having said that, I beg leave to withdraw the amendment.