Civil Liability Bill [HL]

Earl of Kinnoull Excerpts

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

[Lord Sharkey (LD)]

My Lords, Amendment 92 in this group would require the Lord Chancellor to carry out a review of the impact of any new rate on the extent of the use of PPOs and to lay this report before Parliament. Our amendment has the same general purpose as Amendment 55 and as other amendments in this group.

The noble Lord, Lord Hodgson, has already spoken eloquently to Amendment 55 so I can be very brief. It seems to me that all the amendments in this group are intended to provide a gentle nudge in the direction of PPOs. Their purpose is to create conditions in which the incidence of voluntary uptake of PPOs may increase. Given the scope of the Bill, not to mention the ethical questions that would be created by any reduction in the freedom to choose or not choose PPOs, this is probably as far as we can go.

I hope the Minister will be sympathetic to the thinking behind all of these amendments, coming as they do from various parts of the House. If he is sympathetic, perhaps he would be willing to meet interested noble Lords before Report with a view to drafting an amendment or amendments that he might consider bringing forward or supporting.

[The Earl of Kinnoull (CB)]

My Lords, in supporting Amendment 55, I will speak also to Amendment 92A. I declare my interests as listed on the register of the House, especially those in respect of the insurance industry. I can be very brief, because there have been two brief and excellent speeches before me.

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[Lord Faulks]

My Lords, I begin with my declaration of interest, one I gave in Committee and at Second Reading. It is perhaps of some relevance to the debate that we are currently engaged in that I have for some years been involved in claims of the utmost severity and I am to this day instructed for defendants, particularly the National Health Service, the Medical Defence Union and insurers, but also claimants.

I move Amendment 56 in my name and that of the noble and learned Lord, Lord Hope of Craighead, who is not in his place because he had an unavoidable engagement. He knows essentially what I shall say. I cannot claim a total endorsement of any comment I may make in advance, but I can say that he supports the general tone of what I shall say in support of the amendment.

The desirability of periodical payments is clear, and has been well articulated around the House today—but not, I agree with the Minister, in all cases. The Government have very much acknowledged the need to encourage them but have so far not included in the Bill any specific provisions which would have that effect. The noble and learned Lord, Lord Judge, explained the difficulties of estimating life expectation, and he is of course right—although it may have passed his experience and practice that there is an enormous amount of literature now, particularly from the United States of America, in which very refined estimations of life expectation are provided to the court, particularly in the case of the most seriously disabled, so that you are able to enter an algorithm to see the likelihood of reaching a certain age. Having said that, it may well be the case that there is a spurious accuracy about that documentation, in view of the fact that the expectation of life of a seriously brain-damaged child, for example, has radically increased over the time when I have been in practice. An estimation made 20 years ago would simply not be right now for a child with exactly the same injuries.

Section 2(1) of the Damages Act 1996 gave the courts a power for the first time to order periodical payments, but could not do so unless the parties consented. That was preceded by a structured settlement agreement that had been reached in a particular case; it had attracted much attention and, therefore, Parliament intervened to give judges in appropriate circumstances a power of that sort. Then by Section 100 of the Courts Act 2003 the courts were enabled to order periodical payments, if they thought it appropriate. However, my experience is that they do not generally do so. In fact, I have never heard of the courts ordering periodical payments where a defendant is a secure provider but one side or another objects to such an order.

One consequence of the drastic lowering of the discount rate is that periodical payments have become much less attractive. With such a generous discount rate and the consequent rise in lump sums, there is very little incentive on a claimant to seek periodical payments when he or she can do better even by cautious investment in the market. We do not know what adjustment to the discount rate may be or, indeed, when any such adjustment may be made. Even if there is an increase to +1% as opposed to -0.75%, it may not be enough to discourage lump sums as opposed to periodical payments. It should be remembered that before the case of Wells v Wells in 1998, and for many years, the discount rate was +4.5%. It was lowered to 2.5% in 2001 to reflect the decision in Wells.

Amendment 56 is intended to provide some legislative encouragement to a party to seek periodical payments. The assumption by the courts currently is of a claimant as an incredibly cautious investor; in future, he will be regarded as a slightly less cautious investor by virtue of this Bill. Surely, if an investor is really anxious to avoid the uncertainties of the future, the best way in which he or she can do that is by an order for periodical payments with appropriate indexation. It used to be said, and indeed it has been said this afternoon, that the one thing that one knows about a lump sum is that it is either too much or too little. Inevitable uncertainties about life expectation mean that the degree of inaccuracy may be profound. Surely, then, if a sensible offer of periodical payments is made by a defendant and turned down by a claimant in favour of a lump sum, it indicates that the claimant is not nearly so risk averse as the legislation and the discount rate presumes that he is.

It is, of course, entirely a matter for the claimant what he or she wants to do with his money, subject only to the unlikely intervention of the courts to order periodical payments. It seems to me, therefore, that it should be open to the court to vary the discount rate to reflect the fact that, by turning down a reasonable offer of periodical payments, a claimant has evinced an intention to be rather more adventurous than the legislation presumes that he will be. This could either have the result of reducing the overall sum, thus making periodical payments more attractive in the light of a different discount rate, or of promoting settlements, factoring in the possibility of a court varying the discount rate in the light of sensible offers of periodical payments. One way or another, it may go some way to redressing the tendency away from periodical payments in favour of lump sums. I do not think it falls foul of what the noble and learned Lord, Lord Woolf, indicated: that Parliament should not tell judges of great experience precisely how to reflect these principles in an individual case.

The other part of the amendment concerns the particular nature of the loss in respect of which damages are sought. In substantial claims, there are a number of different heads of damage, and it may be that with some heads a different discount rate is appropriate. At the moment, the Bill talks of “classes” of case, not of different types of loss within the same case. In large claims there will be many heads of loss. They will include the cost of future care—usually the largest amount—the cost of specialised equipment; adaptations to accommodation; therapeutic and other medical treatment and loss of earnings, to name some of the main established heads of damage. Different considerations as to the appropriate discount rate may apply to different heads of loss.

In 2010, sitting in Guernsey, Jonathan Sumption QC, before his elevation to the Supreme Court, applied different discount rates to loss of earnings claims from those which he applied to other heads. That decision is not, of course, binding on our courts but it does illustrate that it may be appropriate to vary discount rates depending on the type of loss. This is done in a number of other jurisdictions.

My amendment originally contained a further factor to be taken into account in varying the discount rate, namely if a court concluded that a claimant would not in fact seek to recover a particular cost privately but would rely on the state. Very often, an award is made on the assumption that a claimant will, for example, seek to have his medical treatment and care provided privately, when that may not in fact be the case. In certain extreme cases, one is much better off receiving care for complex conditions through the state rather than, as it were, setting up a private hospital. This part of the amendment was initially accepted by the Table Office, but I was then told that it was outside the scope of the Bill. I am bound to accept that ruling but, as other noble Lords have said—and may say again—it is important that an outmoded provision, namely Section 2(4) of the Law Reform (Personal Injuries) Act 1948, is reviewed, and probably repealed, as soon as possible. I beg to move.

[The Earl of Kinnoull]

My Lords, I will speak extremely briefly on Amendment 57. This is merely a drafting suggestion on an issue where there is common ground with the Government. Trouble arises if you use the word “classes” to an insurance-based person like me, for whom it has a different meaning. To me, it means things like motor insurance, medical negligence or employer’s liability. I want to make sure that it is clear that one can not only follow the jurisprudence of Jonathan Sumption sitting in Guernsey—as has just been pointed out by the noble Lord, Lord Faulks—and vary things a little bit by head, but also in terms of what I call the yield curve. The yield curve is a very simple thing: the longer you invest the money, generally, the higher the interest rate you get.

For instance, if you invest the money for a month with the US Government at the moment you will get -0.25% or so; if you invest it for 10 years you will get 3% or so. On the whole, there is a gentle yield curve. That is reflected in Hong Kong and in Ontario, where they have a system of discount rates. In Hong Kong, if you will have future needs for between nought and five years in the court’s assessment, the discount rate used is 0.5%, between five and 10 years it is 1%, and over 10 years it is 2.5%. In Ontario they split it into two rather than three, and again it is based on the number of years of your future needs, which is assessed by the court: between nought and 15 years it is 0% at the moment, and over 15 years it is 2.5%.

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Moved by

[The Earl of Kinnoull]

58: Clause 8, page 8, line 12, leave out “within the 90 day period following” and insert “on”

[The Earl of Kinnoull]

My Lords, Amendment 58 and the others to which I will speak would alter the timing of the review of the discount rate, as set out in the Bill. Amendment 58 seeks to cut the timing of the start of that review from within 90 days of commencement to nil. Amendment 72, which I am afraid appears in another group but is worth talking about now, says that the review period will be 180 days. Amendment 94, which interferes with the commencement part of the Bill in Clause 11, says that commencement will be on the day that the Bill passes and not just when the Secretary of State decides to publish regulations. I am trying to cut down the timing of the first review appearing from 270 days plus however long it takes for the Secretary of State to commence the Bill to 120 days flat from the Bill passing.

The reason is simple. It is found in the latest annual report of NHS Resolution, which makes it clear that moving the discount rate from plus 2.5% to minus 0.75% has meant that the cost of medical negligence to the NHS, every year, will be an extra £1.2 billion. That means that every day £3.3 million is not being spent on the NHS front line. If the rate does not go all the way back to 2.5%, but is like the rate in France of 1%, that adds up to £2 million a day. So that is somewhere between £2 million and £3 million a day, which is quite a lot of money. That is why am trying to cut the review period from 270 days-plus down to 120 days. I hope the people in charge of getting the discount rate review done have on their desks, in front of their screens, a Post-it note saying, “I need to get this done quickly. It is costing the NHS £2 million to £3 million a day”. In a nutshell, that is the reason for this set of amendments.

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Finally, I want to turn to Amendments 93 and 94, which supplement Amendment 58, relating to the commencement of the provisions. Clearly, as we have indicated before, we are determined to see the provisions commenced as soon as possible. The view has been expressed that we should perhaps take that a step further and have it reflected in Clause 11. Again, I will give that further consideration going forward. In the light of my response, I invite the noble Earl, Lord Kinnoull, to withdraw his amendment.

[The Earl of Kinnoull]

My Lords, I thank all those who have taken part in this short debate—only 22 minutes, but we have discussed an awful lot of money. In good news terms, I am delighted to hear that at least some preparatory work is going on in appointing the panel, and that it will arrive in 2019.

It was good to hear praise of Amendment 71—I congratulate the noble Lord, Lord Sharkey—and what I thought were warm words about Amendment 94. However, I have quite a lot of experience with discount rates and I simply do not buy that this is so complicated that it will take 180 days. An awful lot of people here are familiar with discount rates. I am looking at one: the noble Baroness, Lady Vere, sitting next to the Minister. I find what was said plausible but thoroughly unconvincing. I wonder whether a couple of extra teabags can be put into the teapot so that we can come round when the Minister is at home, discussing the Bill, and talk about how we could trim days off. Every day that we can chop off is a big win for the country. With that said, I beg to ask leave to withdraw the amendment.

Amendment 58 withdrawn.

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[The Earl of Kinnoull]

My Lords, I support the noble Lord, Lord Hodgson. A standing panel would be a great advantage to a Lord Chancellor. Quite apart from the hassle of trying to reassemble a panel every whatever the periodicity is and the cost of assembling one—I assume a firm of suitably expensive headhunters would be involved—you would then have to take the panel up a learning curve as to exactly what is required of it, which would take some time. We do not need to go there.

The biggest thing, though, is that if I was the Lord Chancellor and Black Wednesday happened for a second time I would like to ring someone up and say, “Do I need to do anything here?” I would assume that, as Lord Chancellor, I would not be super-familiar with discount rates and things like that because my expertise would lie somewhere else. Having a standing panel that could answer curveball questions and interact as and when would not be expensive. It would probably cost the same as the periodic panel because of all the start-up costs associated with it, and it would be very helpful for a Lord Chancellor if something really bad happened.

[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.

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[Lord Faulks]

My Lords, we have had a debate effectively asking the Government to get on with the process of fixing the discount rate. We have now had a debate about who should be on the panel and how they should go about exercising the function of deciding the discount rate. This group of amendments is to do with a shorter, but very important, issue—namely, the regularity of reviews.

It is plain, I suggest, that there must be regular reviews, and much more regular than in the past. One of the problems that existed, and still exists until the law is changed, is that there was no particular period in which the Lord Chancellor had to exercise his or her power to alter the discount rate. It was very rarely done, not least because of the potentially significant political consequences of the decision. When, finally, the then Lord Chancellor, Ms Truss, altered the discount rate in 2017, it had the most dramatic effect. While more regular reviews are desirable, the question is: how regular should they be?

The problem about having a review every three years is that parties to litigation will have a quite understandable tendency to try to guess the outcome of the determination of the new discount rate and to game the system. I do not wish to imply anything inappropriate about such gaming; it may well be done by either side in a dispute, and is simply a factor in the uncertainty involved in negotiations, where a party thinks it would be to their advantage either to wait until after determination of the discount rate or to ensure that a trial or settlement is concluded before the discount rate is altered.

Large claims take some time to get to court. A brain-damaged baby does not have to begin a claim—or, at least, a claim does not have to be begun on their behalf—until after he or she attains their majority at the age of 18. The normal limitation period for personal injuries is three years, but there are exceptions in terms of date of knowledge and, under Section 33 of the Limitation Act 1980, there is the power to disapply the limitation period in certain circumstances.

In a complicated criminal negligence case, it may be a number of years before there is clarity in terms of causation and, indeed, prognosis, once all the various experts’ reports have been assembled and exchanged, and there have been meetings of appropriate experts. There is then the problem of finding a court date for trial.

There is thus plenty of time and room for manoeuvring. In my view, a three-year period is definitely too short. I would have favoured, if I had been asked, a seven-year period, but I suggest in this amendment five years as a compromise. If any evidence is needed of the gaming of the system, it is apparent now. That evidence may be anecdotal, but there is such an accumulation of this anecdotal evidence that it simply cannot be ignored. Parties are either anxious to conclude their cases before the putative date of the variation of the discount rate or to delay matters. There is much speculation as to when this Bill will become an Act. I fear that such manoeuvring will take place almost continuously if the three-year period is maintained.

I therefore ask my noble and learned friend the Minister seriously to consider altering the period to five years, which will mitigate to some degree the uncertainty that prevails on discount changes. Uncertainty, I accept, is inevitable in litigation, but where there is such a degree of uncertainty, with potentially large consequences in the size of a claim, it militates against settlement. Settlement of claims avoiding court hearings is surely desirable and unless the Government change the frequency of the review, I fear that there will be a very real increase in the number of claims that do not resolve themselves. Alternatively, there will be a number of applications to court to try to adjourn matters or accelerate them to reflect some perceived advantage to one side or another. I beg to move.

[The Earl of Kinnoull]

My Lords, I shall speak very briefly to Amendments 72, 73 and 75. Essentially, the points I made about the initial review apply here as well, and I shall not repeat them. But it seems to me that the sparking off of a review within a review period —not right at the end—because something has made the Lord Chancellor feel that there had better be a review now indicates that there is probably a need for one, either up or down. Therefore, I feel that we should trim the period of the review down. This is only a discount rate—it is not a very big thing and can be done relatively quickly. The three amendments merely suggest a way of trimming it down. Perhaps I may suggest to the Minister that when we have that very large cup of tea, we kick this around as well. It would be a great shame if future trimming reduced the rate heavily. There may be people whose cases are being settled at the wrong rate, so we have a duty to try to do things at a reasonable pace.

[Lord Faulks]

Does the noble Earl not accept that there is a risk that if there is such a frequent review, those who are parties to litigation will simply feel that they are in a permanent state of uncertainty about what the discount rate may be? They have to rely, for at least a reasonable period, on a certain discount rate.

[The Earl of Kinnoull]

I am sorry if I have confused the noble Lord. I am merely saying that once the review has been sparked off by the Lord Chancellor’s decision—it does not matter what the periodicity is; I was very interested in the arguments advanced by the noble and learned Lord—it should take place at a reasonable pace, because somebody is suffering if it is done slowly. That is the purpose of trying to trim the rates. This is not difficult; one discount rate has been set by a group of people who will have exactly the right sort of skills. I therefore think it can be done a bit quicker but, as I said, it is probably best discussed not in the Chamber but with the Minister.

[Lord Beecham]

I am not really persuaded by the logic of the amendment of the noble Lord, Lord Faulks. It is not as if all claims will be faced with a five-year period. If a case is brought two years before a review, the courts will be dealing with a more recent determination than if it had been five years. I do not see the advantage of the noble Lord’s proposition. There will be some cases that will obviously be closer to that date than others.

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[Lord Hope of Craighead]

I have one point to add to the remarks of the noble Lord, Lord McKenzie, on the effect of the different approach to the level of risk. One factor which was mentioned by Lord Lloyd of Berwick in Wells v Wells was the need to have a relatively stable, constant fund from which funds could be drawn as the need arose over a long period of time. The risk he was contemplating in that part of his judgment was not that of the funds running out, just that the value of the fund would diminish as the stock market went down. In its turn, this would prejudice the viability of the fund to maintain itself at the appropriate level as time went on. The risk we were contemplating then, in looking at the appropriate rate of return, was differentials in performance which would affect the ability of the fund to meet ongoing costs which would not fluctuate. They were the constant costs of equipment maintenance or nursing services which the injured person had to meet from time to time: a level rate of costs, against a fluctuating value in the fund available to pay for them.

There is much to be said for reducing the level of risk to the minimum possible compatible with the aims of the Government, to avoid the problems of fluctuation which affect the viability of the fund. I mention this because it is another factor which lies behind the point made by the noble Lord, Lord McKenzie. As the noble Lord, Lord Faulks, has pointed out, the advantage of the Wells approach is that investment advice was not needed. I am not quite sure how these things are structured, but if the fund were to be put in the hands of an adviser, there is usually a performance factor taken out of the management of the fund. It is not so much investment advice as the cost of managing the fund. The larger the fund, the more likely it is that the best way of handling it is to put the whole fund into the hands of an investment adviser who would simply manage it accordingly.

It is rather difficult to extract from that a recoverable figure of the kind that the amendment in the name of the noble Lord, Lord Faulks, is directed at. There is a lot to be said for just taking that factor out of the award altogether and leaving it up to the individual to decide how best to have the money managed. If it is a management figure, then that is all right: it is just part of the choice that the injured person makes. It should not be added in as an additional element of damages.

[The Earl of Kinnoull]

My Lords, I will speak briefly to Amendments 80 and 81 in my name. I congratulate the noble Lord, Lord McKenzie, on his heart-rending speech, but it seemed only to go back to saying, “My goodness, PPO is a good idea”. So many of the risks which the noble Lord identified would be sorted out by that, but that is in the past.

New Schedule A1 to the Damages Act is inserted by Clause 8(2). At Second Reading, I said that I was worried that paragraph 3(3) did not give sufficient clarity to what was being asked for in the investment. I was concerned that, without that clarity, there could be a plethora of new Wells v Wells cases, with people trying to grapple with what was actually meant. Amendment 80 probes the word “investments” in the phrase,

“the assumption that the recipient of the relevant damages invests the relevant damages in a diversified portfolio of investments”.

We should at least be clear that those investments were debt securities, not equities.

Secondly, I thought it would be helpful to try to define a “very low level of risk”. That does not actually mean anything to me, with my background, and I suspect it does not mean anything in law. I have tried to define it as the level of risk you have when you buy UK Government debt security. These are probing amendments and I regard this as a discussion, but clarity in this area of the Bill would be greatly to the advantage of everyone concerned.

[Baroness Bowles of Berkhamsted]

My Lords, we are dealing with sensitive issues here. Nobody wants claimants to get a raw deal, but we need to examine presumptions that we appear to be writing in, especially in the light— as has just been mentioned again—of the possibility of periodic payments. In his reply to the first group of amendments, the Minister seemed to say that the possibility of periodic payments was a lot more open than it appears to be, due to the statistics.

Amendment 80B is another probing amendment. I tabled it because the language of paragraph 3(3)(d)(ii) of new Schedule A1—it is much easier to say “the last three lines at the bottom of page 9”—does not seem quite right. The wording concerns how it is to be assumed the relevant damages are invested and says to assume,

“less risk than would ordinarily be accepted by a prudent and properly advised individual investor who has different financial aims”.

My amendment deletes the whole sub-paragraph, but it is a vehicle for probing and there are less extreme ways to fix it.

I understand the intention of the words: the claimant should be reckoned to invest in a cautious and advised way, perhaps more cautiously than an individual who does not have the same vulnerability. Paragraph 41 of the Explanatory Notes explains it as,

“less risk than would ordinarily be taken by a prudent and properly advised individual investor (who is not a claimant) with similar investment objectives”.

Those investment objectives clearly need to be the purposes set out in paragraph 3(2) of new Schedule A1, at lines 25 to 31 of page 9, which includes, for example, that the damages,

“would be exhausted at the end of the period for which they are awarded”.

However, the actual wording in the three lines at the end of page 9 does not seem to say the same thing. The first two lines—

“less risk than would … be accepted by a … properly advised individual investor”—

are broadly okay, but it then says,

“who has different financial aims”,

which is very different from the “similar investment objectives” of the Explanatory Notes. I am therefore slightly puzzled. Was the intention to state that they are different because they are not a claimant, is it a mistake, or have I missed some other point?