Civil Liability Bill [HL]

Lord Hodgson of Astley Abbotts Excerpts

Committee: 1st sitting (Hansard continued): House of Lords
Thursday 10th May 2018 Lords Chamber

[Lord Hodgson of Astley Abbotts (Con)]

Does the noble Lord accept the argument that the quantum of damages is essentially a political decision that should be taken and justified in Parliament, not taken by judges in courts? How do aggrieved people achieve change there? We know how they achieve change in a political situation: they can lobby their Member of Parliament and get change. Is the noble Lord saying that this must be left to the judges and that we have no way of obtaining redress for decisions that an individual might feel are unfair or inaccurate?

[Lord Marks of Henley-on-Thames]

Absolutely not. The Judicial College can respond, and be required to respond, to political guidance if Parliament chooses to legislate on the level of damages. I do not say that that is what is wrong. My concern is about the fairness and comparability of picking out whiplash injuries in an attack on fraud and reducing the compensation to genuine claimants accordingly. My point about the £225 and £450 figures—

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Moved by

[Lord Hodgson of Astley Abbotts]

35: Clause 3, page 4, line 5, after “percentage” insert “(not exceeding 20 per cent)”

[Lord Hodgson of Astley Abbotts]

My Lords, at this stage in proceedings on the Bill most of the ground has been pretty extensively ploughed, and I shall endeavour not to till it longer than I have to. We had a long discussion about the setting of the rate on the group taken with Amendment 11, and the noble Lord, Lord Beecham, got even closer to the matters I have in mind with his Amendment 38. However, Amendment 35 is concerned with the provisions of Clause 3, which, as the title suggests, permits uplift in exceptional circumstances.

The question I wish to discuss is whether there should be any limit on the amount by which these exceptional awards can exceed the basic tariff, and if so, whether that limit should be in the Bill. I think there is a strong argument for limiting the exceptional awards, and for putting that into the Bill; the noble Lord, Lord Marks of Henley-on-Thames, was kind enough to take my intervention in an earlier debate. I wish to see judicial discretion limited because I think this is a political matter, not a matter for judicial discussion and discretion. Therefore the limit should appear in the Bill—as a percentage, not as an absolute amount, because if the tariff goes up, obviously the amount of an exceptional award should also eventually increase.

My noble and learned friend referred to this matter in the letter he sent to those of us who participated in the Second Reading debate about the need for a degree of judicial discretion. He suggested that the uplift should be capped at 20% and he has already referred to that this afternoon. I do not disagree with any aspect of his remarks, except that I think it is important that the percentage should appear in the Bill. This is in the interests of stability and clarity—stability because if the exceptional amount could be increased by the court without limit the temptation for claimants to game the system would be greatly increased, and clarity because such a limit would facilitate the setting of the rates of motor insurance and reduce the volatility in the amount of such rates year by year. That is an important distinction to remove absolute discretion from the courts, to bring it into the political arena and to set that percentage in the Bill so it is clearly a political, parliamentary decision. I beg to move.

[Lord Beecham]

My Lords, I am a little concerned at the degree to which political considerations are supposed override our system of justice. This is not the first time it has been mentioned. However, the latest case is perhaps the least acceptable of the recommendations of this kind. Why on earth should Parliament decide on the so-called exceptional circumstances—undefined, of course, for the purposes this debate—on what are already constrained sums to be awarded in damages? It is trespassing too much on the rights of the citizen and the role of the judiciary. I hope that the Minister will concur with that, given his enormous experience of these matters, and, I apprehend, a real interest in justice being effective and available. With all due respect, the amendment moved by the noble Lord undermines both.

[Lord Keen of Elie]

My Lords, I am obliged to my noble friend Lord Hodgson for his amendment. I understand the intent when we are seeking to address a very particular problem. However, I cannot concur with the proposal that we should set in the Bill some limit to the judicial discretion that will be exercised in exceptional circumstances. We have yet to see how exceptional circumstances will develop once the Bill comes into effect. We therefore consider it more appropriate that the percentage increase in tariff should be determined by regulation by the Lord Chancellor in order that he may, from time to time, have regard to developments once the Act is in force. We do not consider it appropriate to constrain that exercise by setting a ceiling in the Bill. For these reasons, I invite my noble friend to withdraw his amendment.

[Lord Hodgson of Astley Abbotts]

I thank my noble and learned friend for that reply. It was not entirely unexpected. I say to the noble Lord, Lord Beecham, that it is nothing to do with access to justice, it is merely limiting judicial discretion. Indeed, the noble Lord accepts that judicial discretion is going to be limited because he is quite happy to have this percentage in regulations which can subsequently be altered one way or another without much parliamentary scrutiny for all the reasons we know. I note the points my noble and learned friend has made, and I beg leave to withdraw the amendment.

Amendment 35 withdrawn.

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[Lord Hodgson of Astley Abbotts]

My Lords, my name is down to Amendment 46, moved by the noble Earl. I entirely support what was said by my noble friend Lady Berridge and the noble Lord, Lord Marks of Henley-on-Thames. It is not good enough just to say, “We are going to make sure it is competitive”. There will have to be some demonstration of returns and the improvement from this.

Therefore, who invigilates and who enforces? The noble Lord, Lord Marks, suggested a review by the Lord Chancellor. The noble Earl pointed out quite graphically the complexity of unpicking insurance claims and returns. I urge the Government, if they are minded to move in this direction, to think about the FCA as the invigilator and the enforcer. It has exceptionally wide powers.

The noble Earl referred to treating customers fairly but there is a thing called Section 166, which is an investigation by skilled persons. This puts the fear of God into people because the FCA can choose to have anything investigated and the cost is charged to the company being investigated. That sort of power is extremely valuable in unpicking the very detailed information that the noble Earl referred to. I fear that the Lord Chancellor’s Department would not be as well equipped to do it as the FCA. I hope the FCA will be uppermost in the Government’s mind if they are minded to have somebody keep an eye on and verify and show beyond peradventure what savings are being made and how they are being distributed.