Civil Liability Bill [HL]

Debate between Lord Faulks and Lord Hunt of Wirral

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

[Lord Hunt of Wirral (Con)]

My Lords, this group contains 18 amendments, of varying importance. I declare my interest as having been a partner for 50 years—this year—in the global commercial law firm DAC Beachcroft LLP. I was so pleased to see the noble Lord, Lord Morris of Handsworth, in his place earlier because for many years I had the honour to act for the Transport and General Workers’ Union when, on the instructions of Mr Albert Blyghton, I went into battle to recover substantial damages where people had been seriously injured.

In supporting the words of the noble and learned Lord, Lord Brown of Eaton-under-Heywood, and the noble Earl, Lord Kinnoull, I remind the House that here we are dealing with a racket, as described by the noble Lord, Lord Blencathra, which has grown up in this country thanks to what is termed the compensation culture, encouraging not just fraudulent but spurious—I think that is a better description—claims, which have now made us the global whiplash capital. I greatly regret that.

After all, in this group of amendments we are talking about only minor injuries. As has been pointed out by the noble and learned Lord, Lord Brown, there has been a political decision. I remind noble Lords that in the Red Book in 2015, the then Chancellor of the Exchequer, Mr George Osborne, said:

“The government will bring forward measures to reduce the excessive costs arising from unnecessary whiplash claims … including by … removing the right to general damages for minor soft tissue injuries”.


I am not sure everyone here was present when we had a debate—and we have had a number of subsequent debates—about the need to tackle this whiplash culture.

Not everything George Osborne said in that Autumn Statement was received with universal acclamation but I well remember that that particular announcement was welcomed on all sides of the House. “At last”, we said, “we’re going to get rid of the whiplash culture”. There was a clear consensus in this House that the law and the courts had allowed a racket to flourish, leading to a manifest and substantial injustice—the injustice of millions of law-abiding insurance policyholders having to pay over the odds to fund this mass of bogus claims. We can point the finger at the insurance industry, perhaps, for allowing too many but we are talking not just about insurance-funded claims but about a whole range of minor claims, and we have to decide as a House whether we intend to fulfil what I understood we had agreed to do about this racket.

I congratulate my noble and learned friend the Minister on the determination he has shown to end this racket and to end the injustice. We have identified an injustice and we have promised to act to end it.

There is a judicious balance in the Bill, as one would expect, and those with genuine minor injuries have nothing at all to fear from it. The option of doing what George Osborne initially recommended, namely to remove general damages completely from soft tissue claims, has perhaps wisely been abandoned in favour of the proposed tariff. In Amendment 1, as we have already heard, the Government have further answered their critics in this House by putting a clearer definition into the Bill. It is not perfect but it is a lot better than the previous one in the draft regulations. It comes closer to capturing the scale of the problem.

I thought we had a consensus in this Chamber in July last year, when we debated the need to tackle the regulation of claims farmers during the passage of the then Financial Guidance and Claims Bill. I highlighted at the time the work of Carol Brady, in her excellent report in 2015, and the need to follow the money. Noble colleagues on all sides of the House agreed in that debate that these were important measures; now, we have to tackle the money itself, in the form of damages and solicitors’ fees, and we are of course suddenly beset by an enormous number of last-minute amendments. I must share with the House that, following the then Chancellor of the Exchequer’s announcement, I was told: “Don’t think for a moment that this will ever pass, because the jobs of thousands of those employed in the claims management industry will be lost. They will fight hard to stop the Government’s action”.

Why should the noble and learned Lord, Lord Woolf, of all people, be challenging the Government’s stated intent here? I have already heard the depressing rallying call of access to justice. In truth, I worry about some of the briefings that we have received in preparing for this debate. They really seek to delay what action the Government are taking. I know that the noble and learned Lord, together with many other Members of this House, has received instructions from me personally in the past and I have huge respect for him. We must surely recognise, as the noble Earl, Lord Kinnoull, reminded us, that the Government committed in the manifesto at the last election to tackle the rampant compensation culture around whiplash claims—the same culture which pays the bills for those who continually text and call us with offers of money for nothing. We must not allow our eye to be taken off that ball.

The noble and learned Lord, Lord Woolf, referred to the Judicial College guidelines. Amendments 11, 17A and 17B propose sagely that those guidelines are the cure of all ills, but they are really not the answer to the question we have to address. I do not know the guidelines off by heart but I know this particular section, because it reminds us that,

“the figures … merely represent what other judges have been awarding for similar injuries”.

That is all the guidelines do. They also say:

“The figures in this new edition recognise that … the general increase in RPI … since … 2015 has been 4.8%”.


With respect to the good work that the Judicial College does to make awards consistent, the guidelines simply record the numbers previously thought of by other judges over the years and then uprate them for inflation. These and other amendments proposed by the noble and learned Lord, Lord Woolf, in fact oppose the entire substance of Part 1. They ask us to agree to leave the problem to the judges to sort out.

I respectfully answer that the courts have had many years to contain the problem but I have yet to see any conspicuous success. The assessment of damages by judges is based on a ratchet effect; it can go up but it can never slip back, as the Judicial College guidelines themselves admit. Judges do not redress the balance at any time. On one recent occasion when they had the opportunity to do so—the noble and learned Lord may recall Heil v Rankin in 2000—the judges increased damages for all but minor injuries and left the damages for those alone, so the control effect is simply absent. That is why it is now up to Parliament to do what needs to be done.

I conclude by reminding colleagues that a graphic illustration of leaving such matters solely to the discretion of judges can be found in a High Court appeal case last month, Molodi v Aviva Insurance. A whiplash claim was initially accepted by the county court judge, even though Mr Molodi had lied on a number of aspects of his case. The High Court judge in Manchester, Mr Justice Spencer, threw the claim out and issued a salutary warning to the judiciary,

“it is also pertinent to recognise the problem that fraudulent or exaggerated whiplash claims have presented for the insurance industry and the courts. This was recognised in March 2018 when the Ministry of Justice published a Civil Liability Bill … proposing new, fixed caps on claims … The problem of fraudulent and exaggerated whiplash claims is well recognised and should, in my judgment, cause judges in the County Court to approach such claims with a degree of caution, if not suspicion”.

The need to issue such a general warning to fellow judges belies the suggestion that we can safely leave this issue for judges to control. The tariff is sorely needed. It applies the brake, which only the Government can apply, not the courts.

[Lord Faulks (Con)]

My Lords, I repeat my declaration of interests made at previous stages of the Bill. The noble and learned Lord, Lord Woolf, and others have advanced powerful arguments in favour of protecting the entitlement of those genuinely injured who seek compensation for whiplash. Coming from such a distinguished source, these arguments clearly demand a great deal of respect around the House. It is therefore—to adopt a phrase used by judges—my misfortune not to agree with the noble and learned Lord’s amendment. The noble and learned Lord, Lord Brown, referred to the fact that judges from time to time decide matters of policy and relied on the case of Caparo and the fair, just and reasonable test. It is of course for Parliament to decide fairness, justice and reasonableness, and it should approach this problem with that in mind.

It is undoubtedly true that some genuine claimants who have sustained whiplash injuries will be entitled to rather less than they would have been if the Bill becomes law, but we need to stand back and consider the policy driver behind these changes. At Second Reading, the Minister pointed out that there has been a 70% rise in 10 years in the number of road traffic accident-related personal injury claims. Of these, 85% are for whiplash-related injuries. In 2016-17, there were 670,000 whiplash claims—it is rather surprising that anybody gets into their car at all—yet we know that we have more of these injuries than any other European jurisdiction notwithstanding the considerable improvement in standards of road safety in this country and the adoption of neck restraints and the like. All this costs motorists and consumers a great deal, and the cost of premiums falls particularly harshly on those who live in rural communities and have to drive cars and on the young, who may find it difficult or impossible to pay premiums.