Civil Liability Bill [HL]

Lord Pannick Excerpts

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

[The Earl of Kinnoull (CB)]

My Lords, I declare my interests as set out in the register, particularly those in respect of the insurance industry. The 2017 Conservative manifesto provides an interesting lens through which I feel one ought to consider various amendments in this group. It states the following in a section entitled, “Cutting the cost of living”:

“We will reduce insurance costs for ordinary motorists by cracking down on exaggerated and fraudulent whiplash claims”.


At a high level, the Bill seeks to do that principally by dictating how whiplash claims procedures will work in the future; that is, through the use of a tariff. Several amendments in this group seek to interfere with the principle of a tariff either by removing it or by making it rather more generous than market forces allow today. Both of these approaches seem to fly directly in the face of that express manifesto commitment. I remain very much of the view that any tariff should be set out in the Bill, just as the Delegated Powers and Regulatory Reform Committee has recommended.

We are in extraordinary and difficult circumstances here, with around 1% of the population of the UK annually successfully concluding a whiplash claim. I submit that a social and political necessity trumps jurisprudential purity, such as that advanced by my noble and learned friend Lord Woolf, even before considering the manifesto commitment point that I made earlier.

A tariff will bring benefits in terms of certainty and the potential for ordinary citizens to file claims online easily, without the need for external professional help. Any reduction in hassle and the costs of processing a claim will inevitably benefit everyone. Indeed, we heard at Second Reading how a tariff system seemed to work well in Spain. Deleting Clause 2 would deny those benefits. It would certainly deny the Government the ability to deliver on their manifesto commitment because the hugely unsatisfactory status quo would simply continue, with a numerous minority of our fellow citizens continuing to abuse the current environment to their financial advantage. Therefore, I strongly oppose Amendment 18.

Turning to the quantum in the tariff table, I accept that the issue is rather a Goldilocks one. If the quantum is too generous, the problem of exaggeration and fraud will persist. If it is not generous enough, the genuinely injured will be badly dealt with. The Government have attempted to walk this line in their draft statutory instrument; I make no comment on the numbers it contains. The structure of the Bill allows the Lord Chancellor to vary the tariff with suitable safeguards.

I fear that Amendments 10 and 17B are too generous because they depend on the Judicial College numbers, which are derived from cases heard. The numbers are actually above where the market—if I may call it that—is today because the cases that tend to get to court tend to have non-standard features, such as being more complex or involving psychological issues. Therefore, I fear that if either of these amendments were adopted, there would be no saving per the impact assessment—possibly even a negative saving—and thus they too defeat the Government’s manifesto commitment. Accordingly, I oppose them.

In turning to Amendment 30, I start by expressing my support for Amendment 12, which restores constitutional balance in a very elegant way. Indeed, I congratulate the noble and learned Lord, Lord Judge, on his excellent speech. Amendment 12 goes some way to addressing the issues that were set out well by the noble and learned Lord, Lord Woolf, in introducing Amendment 30. However, Clause 3 is not only a fully important part of a package to frustrate the designs of the claims industry but an important part of a strategy to deliver the manifesto commitment. On that basis, I feel that this amendment should also be resisted.

[Lord Pannick (CB)]

My noble friend Lord Kinnoull referred to “jurisprudential purity”. I would prefer to describe it as the essential role of the judiciary in deciding what compensation is appropriate. I would be very grateful if the Minister would tell the House whether there is any precedent for a Minister, rather than judges, deciding on the appropriate level of compensation for a civil claimant when that compensation is being paid not by the state—I recognise that that may be a different matter—but by a private wrongdoer or, more accurately, their insurance company. I suggest that either there is no precedent or this is rare, for a very good reason: put simply, judges, not Ministers—or their civil servants, more accurately—have expertise and independence in this area. For those reasons, I strongly support the speech made by my noble and learned friend Lord Woolf.

[Lord Brown of Eaton-under-Heywood (CB)]

My Lords, I confess to having found this group of amendments rather difficult. As I observed in Committee, the real question as I see it in Part 1 is whether it is right to fix especially low awards for whiplash injuries suffered in road accidents, to deter the disproportionate number of false claims which undoubtedly are made following such accidents. That is what Clause 2 does: it seems to me impossible to escape that conclusion. Obviously and inevitably its effect, therefore, would be to penalise those who genuinely claim for such injuries sustained in that way. They are to pay the price of the policy underlying Clause 2, the policy of deterring the dishonest. Obviously, one regrets that.

Whether to pursue that policy and, if so, to what extent and how vigorously—in other words, how far to reduce the awards so as to make the making of a false claim less attractive—is, it seems to me, par excellence a political question. It is purely a political question and therefore I, for my part, see no particular point in involving the judiciary as Amendment 12 would do. We know what the judiciary regards as the appropriate level of damages for honest claims of this sort: the Judicial College guidelines clearly tell us that. Therefore I do not support Amendment 12.

To my mind, the real question is the altogether more fundamental question raised by my noble and learned friend Lord Woolf’s Amendment 18 and that is the one I confess that I find the more difficult. I flagged up my concerns about this and about the whole of the Part 1 policy in Committee. My noble and learned friend suggests that the proposal will create an undesirable precedent and introduce injustice into the system. Of course, I recognise the force of these criticisms and to a degree I share his doubts as to whether the incidence of false claims remains grave enough to justify this wholly exceptional measure. However, at the end of the day I am reluctantly persuaded that this provision is justified: it is surely intolerable that we are known as the whiplash capital of the world, so I have concluded that it is open to government, as a matter of policy, to seek to deter dishonest claims in this way.

I do not suggest that there are any exact analogies between the law of compensating injuries negligently caused and what is here proposed. I accept that the criminal injuries compensation scheme, to which in effect my noble friend Lord Pannick and the Minister referred—statutory awards for injuries criminally caused—is a very different creature, but it should be recognised that broad questions of policy can and on occasion do have a part to play in this area of our law. For example, the courts have held, under what lawyers here will recognise as the Caparo principle, that in certain circumstances claims are barred altogether, not just restricted. In short, there is no duty of care held to arise, even when injury follows on from what otherwise would be plain negligence, where it is held, for whatever reason, that it would not be fair, just and reasonable to compensate in those circumstances. For example, years ago in the case of the Yorkshire Ripper, the police were held exempt from claims despite their failure to apprehend the killer, which manifestly they should have done, and, as we all recall, a series of subsequent women died.

On balance, my conclusion is that there is a sufficient policy reason here for restricting damages in this case. With some hesitation, I shall not feel able to support the amendment tabled by the noble and learned Lord, Lord Woolf.