HL Deb 04 May 1982 vol 429 cc1105-21

Report received.

Clause 3 [Amendments of Fatal Accidents Act 1976]:

7.3 p.m.

The Lord Chancellor (Lord Hailsham of Saint Marylebone) moved Amendment No. 1:

Page 3, line 7, at end insert— ("(aa) any person who—

  1. (i) was living with the deceased in the same household immediately before the date of the death; and
  2. (ii) had been living with the deceased in the same household for at least two years before that date; and
  3. (iii) was living during the whole of that period as the husband or wife of the deceased;").

The noble and learned Lord said: My Lords, this is the question of the common law wife with which the House will be familiar after our discussions on Second Reading and later, in Committee. I should like to explain what I have now done and why I have done it. I was, of course, impressed at both stages of the debate on this thorny subject that there was a considerable body of opinion both inside the House and outside it in favour of doing something about damages under the Fatal Accidents Act for the common law wife, whoever, like Sylvia, she may be.

As I explained, I was more preoccupied than was my noble and learned friend Lord Rawlinson with the speeches that were made, and particularly, if it is not invidious to say so, by the speech made from the Cross-Benches by the noble and learned Lord, Lord Edmund-Davies. But my difficulty was, and remains, the difficulty of definition inherent in the status of something which has no legal existence except in the rather esoteric sense which was explained by the noble and learned Lord, Lord Simon of Glaisdale.

I took a lot of soundings between the Committee stage and this stage. I consulted the Bar, the Law Society, the Trades Union Congress, the Confederation of British Industry, the British Insurance Association, and of course the Criminal Injuries Board which has a direct interest in this matter because many criminal injuries result in death and they are governed by the same rules, although they proceed in a different manner.

Most of those that I have mentioned were broadly in favour of something being done or else indifferent to whether it was done or not, but also offered very little assistance in what you might call the draftsmanship of it. The Criminal Injuries Board was concerned, as indeed I am, with the problem of potentially fraudulent or fraudulently exaggerated claims. I think this is a real problem. I also attach a certain amount of importance to what my noble and learned friend Lord Rawlinson said on the Committee stage.

At any rate, the net result of what I have done is to try to apply a number of criteria to the conception, to give it a more or less firm statutory definition, and to give the claim some effective limits so far as is possible. In the first place, the surviving partner has to have been living in the same household immediately before the date of death. That is to stay, the advantage of this clause if it is passed, will not enure to the benefit of the mere kept woman.

Then there must, I think, be some degree of permanence about the relationship. The weight of the speeches made on Committee, especially Lord Edmund-Davies's speech, related to these enduring relationships in which the actual status of marriage had not been achieved but much else that is part and parcel of a marriage had been, and I have put in a specific period of years. Thirdly, the couple must have been living together during the required period as husband and wife. This deals with the point put on behalf of those who wished to see an amendment proposed by, I think, the noble Lord, Lord Mishcon, at an earlier stage; they must be living together as husband and wife.

I have also put in—and I think this is a fairly necessary protection against exaggerated claims—that in arriving at the degree of dependency, and therefore the amount of damages, the court should take into account, in contrast with what I might call the legitimate spouse, the fact that there is no security of tenure in the relationship in this particular case. I have tried, in this series of amendments, to give effect to these considerations which I think broadly reflect, so far as one can obtain a consensus, the feeling in the House and outside it about this particular problem.

I note, and perhaps I may add a word about it, that the noble and learned Lord, Lord Elwyn-Jones, and the noble Lord, Lord Mishcon, have put down an alternative amendment that clearly is intended to give effect to the feeling of the Committee in the same sense that mine has. I hope the noble and learned Lord will agree that I have done my best in this amendment—with which are associated Nos. 4 and 5 and the Northern Irish part of the schedule—to give effect to the feeling of the Committee without straying too far in the direction of laxity. I beg to move.

Lord Elwyn-Jones

My Lords, this matter was raised by my noble friends Lord Mishcon and Lord Elystan-Morgan on Second Reading and was then taken further at subsequent stages of the Bill. We feel that, as there are in this country today hundreds of thousands of men and women living together over the years in a settled, permanent relationship as reputed spouses, in the event of the man—or possibly in some cases the woman—being deprived of the person on whom there was dependency, it would be proper that he or she should be embraced in the provisions of the Bill to deal with dependency when the person dependent has suffered loss through the negligence of a third party causing even the death of one of the reputed spouses concerned. I recall recollecting how, in our constituency surgeries, we came across that sort of tragic situation—of a sudden catastrophe happening—of, say, the husband being killed by a negligent driver with nothing left for the so-called common law wife.

The noble and learned Lord the Lord Chancellor moved from detachment to support. He was invited to apply ingenuity and compassion to the scene, and he has done both, and we are grateful to him, certainly for the first amendment. That gives practical effect, and is more acceptable as the language, to provide a statutory right than the rather looser language of the amendment we had in mind, No. 2, although, save for the period of time in Amendment No. 1, it embodies the same sort of ideas. We are, therefore, content with Amendment No. 1. There is room for argument about the period chosen, of two years, but that seems to me to be a long enough testing period to point to the durability of the relationship.

We are a little troubled, however—we shall come to it when we reach it—about the provisions of Amendment No. 5 and what the implications are of the proposed provision that, where there fall to be assessed damages payable to a person who is a dependant by virtue of section 1(3)(aa) above in respect of the death of the person with whom the dependant was living as husband or wife there shall be taken into account the fact that the dependant had no enforceable right to financial support by the deceased as a result of their living together."). Frankly, what we are afraid of is that the identification of that as almost the most important factor in considering the damages that should flow from the dependency might be treated by the judge trying the case as being met by a mere token award, and not by a serious consideration of the damages that should flow to the dependent person. Whether or not we should introduce other factors to be taken into account—for instance, the period during which the relationship has existed or any special circumstances which may fall for consideration by the judge—it seems to us that all that the learned judge has his attention drawn to is that he should take account of the fact that the common law wife had no enforceable right to financial support from the deceased as a result of their living together.

As a matter of law, that is right—that is the case—but, if the statute identifies that as a principal factor, almost the only factor, that should be taken into account, what we have in mind to achieve, and what I am sure the noble and learned Lord has achieved, will be frustrated. Therefore it will be necessary for us to consider that. I say now that I do not intend to call a Division on Amendment No. 5 and I hope I shall be forgiven for having wandered on to that amendment, as the Lord Chancellor himself did. I say that in indicating that we accept Amendment No. 1 with enthusiasm but, when we get to Amendment No. 5, we shall try to persuade the noble and learned Lord to produce a basis for the award of damages less restrictive and more enabling the judge to do justice to the circumstances of the case.

Lord Renton

My Lords, those who took part in the Committee stage should be grateful to my noble and learned friend, though it would seem that under the Bill as it will stand if the amendment is made, we could have two claims. One would be what I would call the genuine widow—the lawful wife who has been living apart from the husband, prehaps for some years, perhaps under a deed of separation, and receiving maintenance from him under that deed—and the other the woman with whom, since that separation, he went to live, but there has been no divorce. It would seem that each of those ladies would have a right of action under the Bill as it will stand when amended. If so, it will presumably be a matter for the discretion of the courts as to how it shall be sorted out between the two of them, but any word of clarification which my noble and learned friend can give might be of great help.

The Lord Chancellor

My Lords, I am grateful to the noble and learned Lord and my noble friend for what they said. Perhaps it was not so much an indiscretion as an intention on my part that we should discuss Amendment No. 5, at any rate to some extent, along with No. 1. In some ways, both my noble friend Lord Renton and the noble and learned Lord have illustrated, by their diverse and rather divergent comments, what I was trying to achieve by Amendment No. 5. All Lord Campbell's Act cases depend, so far as regards quantum at least, on the fact of dependency; that is, you find out how much the dependent, if he is coming within the class entitled to compensation, was in fact dependent financially on the deceased at the time of his death. The noble and learned Lord and my noble friend as well as the noble Lord, Lord Mishcon, are very familiar with such cases; we must have done, in the course of our miserable lives, some hundreds of them. Having ascertained the degree of dependency as at the moment of death, one then achieves as it were a multiplicand. One then applies a multiplicator by way of the number of years that the dependency would be likely to endure, as a matter of fact, not as a matter of law. It is a matter of how long, and to what degree, the dependency would be likely to endure.

As regards what my noble friend Lord Renton said, it seems to me that if the amendment is carried, one does not need to sort out the matter between both parties because each will have a separate cause of action, and each will have to establish the multiplicand applicable to himself or herself. Then each will have to apply to that multiplicand—which might be unequal or equal, or be in greater or lesser degree—the multiplicator, the number of years that the dependency was likely to endure, simply as a matter of realism.

What I was trying to achieve by Amendment No. 5, and what I shall in due course promise to refer back to the parliamentary draftsman, on whose expertise I have been relying, though the idea was mine, was that in the nature of things a lawful wife who is dependent has a larger multiplicator, as a matter of fact, than has a person who may be living at the time with the deceased but who does not have the same expectation—a different expectation—in point of fact, not in point of law, of the relationship enduring. I was not seeking to make it the only factor, or even the principal factor, which the court ought to take into account, because all the other factors common to all the fatal accident cases that we have dealt with must automatically be taken into account, whether or not my amendment is passed. What I wanted to make clear to the court was that one of the factors which it ought to take into account in applying the durability test, in applying the multiplicator, was that the relationship was one which could be determined by the will of either party without legal proceedings and without giving rise to an obligation on the part of the other. In other words, it was intended as a piece of realism, and was not intended to be restrictive in the sense that the noble and learned Lord was putting it.

That being so, when I come to move Amendment No. 5—or perhaps I may do so now—I shall give an undertaking to ask the parliamentary draftsman to consider whether I have achieved my object, and to what extent I have achieved something which I did not intend, or to what extent I have achieved something more than I intended, since the noble and learned Lord has obviously thought that I have done so. This is not a matter about which I would care to dogmatise. It concerns a factor in the case that I should like Parliament to lay down as relevant to the court's consideration, but not as determinative or restrictive. I want the court to take a realistic view of the degree of dependency and the time that it is likely to endure, having regard to the relevant factors.

Lord Elwyn-Jones

My Lords, if I may speak for a second time on the amendment, I would say that I am most grateful to the noble and learned Lord the Lord Chancellor. If there are used words such as, There shall among other matters be taken into account the fact so and so, they might provide a covering. It might be that some brilliant advice has already come if not from on high, then from the right flank, to deal with the situation; I know not; sometimes it does, sometimes it does not. However, in view of what the noble and learned Lord has said, my noble friends and I are very happy—and I think that the noble Lord opposite will be of the same mind—to accept Amendment No. 1 with gratitude, and perhaps to hear more about the matter when we come to consider Amendment No. 5.

On Question, amendment agreed to.

[Amendment No. 2 not moved.]

7.24 p.m.

Lord Mishcon moved Amendment No. 3: Page 3, line 44, after ("husband") insert ("or unmarried minor child").

The noble Lord said: My Lords, the House will remember that previously the case of a bereavement claim was very fully discussed by the Committee. It was a claim which the noble and learned Lord said he introduced into the Bill with something of a heavy heart, only because in his view—and obviously there is a substantial body of opinion that might well agree with him—it is almost an insult to talk in terms of money covering bereavement in a fatal accident claim. However the matter is in the Bill, and there are several categories of people who are entitled in regard to the bereavement claim but, as I tried to submit on a previous occasion, the one obvious claimant has been omitted. It is the unmarried minor child, who one thinks is possibly the person who will the most miss the parent from the point of view of actual loss, only in the sense, as I previously said, sometimes a surviving spouse can find some kind of relief, contentment, and indeed happiness, in a remarriage, whereas a child can never regain a parent who has been lost.

The only argument that had been advanced against this point is that of the difficulty of tracing a child in some instances. I do not know whether that can possibly be a very real difficulty in the case of a minor unmarried child. It was previously said that children might wander abroad, but I do not think that that is an argument that will commend itself to the House. The real, substantial argument was that the minor unmarried child would in any event most likely benefit under what we have always called Lord Campbell's Act; as a dependant. On a previous occasion I ventured to say—and I repeat it briefly now—that there are so many cases which we can all envisage where that just would not happen. The obvious case would be where a mother who was not the bread winner is killed and so there is no question of dependency. Another case is where a father who had suffered some disability is killed, and therefore the mother had had to earn a livelihood for the family.

I do not think that I improve a case by battering away at the objections that have been made to it. I leave it on the basis that this was an argument that commended itself to your Lordships on a previous occasion. If I remember aright, it was not carried to a Division. I very much hope that after considering the speeches that were made on a previous occasion, the noble and learned Lord can find it in him to accept this amendment with the same degree of mercy and generosity with which he accepted the previous proposal with regard to the common law spouse. I beg to move.

The Lord Chancellor

My Lords, I should very much have liked to do more for the noble Lord, Lord Mishcon, than I am going to do, but the more that I think about this matter, the more I feel that my instincts about it were originally right. I have to go back to first principles. Lord Campbell's Act—and the law remains as it was under that Act—quite definitely confined a right of action for damages by a deceased's relative to cases of actual financial loss. That was done for a very good reason; namely, that it is, I suppose, degrading to human nature in some senses to try to turn the grief that one feels at bereavement into money. The noble Lord, Lord Foot, was kind enough to agree with a number of rhetorical questions that I put at an earlier stage—the kind of questions which one would have to go into if this matter were to be taken into account at all. The Scots have gone down that road, but I and the Government have deliberately not done so. The extreme view, which I privately hold, was expressed in the earlier debates by my noble and learned friend Lord Rawlinson, who took very strongly the view which I have put and said, "Nothing at all for grief". I thought that, and I have made that plain throughout.

On the other hand, the road down which I have gone is that of the Law Commission and of the Pearson Commission, who, with different degress of unanimity and with slightly different formulae of ascertainment, have suggested a compromise based on a conventional figure. The Law Commission (I think it was the Law Commission) decided on the figure of what was then £1,000, I updated it because of the decline in the value of money, and that is the one I selected. The Pearson Commission decided on a formula based on the average weekly earner's earnings over a year, so that the rich man would get the same as the poor man, and so on. But the factor which they both had in common was the conventional figure in place of either the unlimited solatium of Scotland or the other, sterner view.

Incidentally, I do not think it is a question of compassion. I do not think it has anything to do with compassion, and I do not think it has anything to do with generosity. It is not our own money we are talking about; and it is a matter about which sensitive people can take very different views, and obviously have. I think I am right in saying that the discomfort of arguing these things as Lord Chancellor without a table in front of one is something which will be known only too well by the noble and learned Lord on the Front Bench of the Opposition. What I have really said is, "Yes, a spouse can have it and a parent can have it, but not a minor child".

At first sight, of course, that sounds very harsh on the minor child, but I think that the House will want to look at the clause rather carefully because, looking at it, your Lordships will see that where both parents have lost a child the conventional sum has been deliberately divided into two equal portions, one for each parent. That, again, is arbitrary. It must be arbitrary, because who is to say that either the mother or the father will miss the child the most? But it is divided arbitrarily into two. I would say to the noble Lord, Lord Mishcon, that I asked the parliamentary draftsman today what would be the effect on the award if the amendment proposed by the noble Lord, Lord Mishcon, were carried. Supposing there were ten minor children, would the total awards amount to £35,000 or would each get £350? "It is not clear", said the parliamentary draftsman, "which of the two things the noble Lord, Lord Mishcon, really intends". I think it is doubtful, too, but I do not think this is a mere drafting point. If I thought it was a mere drafting point, I would probably write to the noble Lord, but I think it is a mark of the fundamental confusion of thought underlying this line of country.

Now I should like, if I may, to remind the House that at least two members of the Pearson Commission—one Mr. Norman Marsh, who has almost a double weight in this matter because he had previously been a Law Commissioner, and one other—were determined that there should be no damages for bereavement at all, and the Pearson Commission, by that majority, thought only an unmarried minor child should be so entitled. So there is almost every degree of difference of opinion about this. I think the confusion of thought can be illustrated by the following considerations. I lost my own mother when I was of the age of 17, and I was at the time absolutely desolate. Suppose I had been not 17 years old but a baby of three months. Would my grief have been more or less, or equal; or is it a question without meaning, as I suspect? Is it right that the baby of three months should have it on the same level, or as more or less, than the boy of 17? I do not know. I think in the end it is a meaningless question. So the grief the child feels can be no argument at all since it is a purely conventional award.

Another factor which I think you have to take into account which illustrates the difficulty and, I think, the confusion of thought underlying this amendment, is the fact that damages, when they enure to a child, will only be dispensed to the child much later after the award. If you are going in for damages for bereavement on a conventional figure, obviously grief at its most acute is felt at the time the loss is suffered; but the distribution will take place, if the child is a minor, years later, when it comes of age, I suppose, and only the money will be dispensed which depends upon actual financial loss, when the grief will, if not have disappeared at any rate in its most poignant form have been overcome.

I regard this as a matter of great difficulty. I have never pretended anything else, and I hope I have been absolutely candid with the House about this. But I think that if you go down the road which quite deliberately I have gone down, which is the road prescribed in one way or another by the majority of Pearson and by the Law Commission, in favour of a conventional award—that is to say, rejecting both the Scottish road of solatium and what I might call the Rawlinson road or the privately-held Hailsham road of no damages for grief at all—the difficulty of awarding it to a minor child becomes absolutely insuperable, and the questions to which it gives rise unanswerable, because they are non-questions—and yet they would have to be answered by the tribunal.

Again, I do not wish to appear unsympathetic or ungenerous, or anything of the kind. I think this is a very difficult problem. I have done my best to apply my mind to it, and I am sorry to say that in this case I am of the same opinion still.

Lord Mishcon

If I may speak very shortly for a seond time with the leave of the House, as the noble and learned Lord has been candid enough to admit this is a very difficult problem. We faced a very difficult problem with a common law spouse; the noble and learned Lord, with his breadth of mind and his endeavours to be so fair in this legislation, as in all other legislation, gave further thought to the matter, and in the end came to an opinion which obviously delighted us. I live in hope that some further consideration between now and the next stage of the Bill will enable the noble and learned Lord to come round to the point of view that it is wrong to exclude the unmarried minor child. Having said that, I think that is where I ought to leave it at this moment.

Amendment, by leave, withdrawn.

7.39 p.m.

The Lord Chancellor moved Amendment No. 4:

Page 5, line 7, leave out from beginning to ("there") in line 9 and insert—

("(3) In an action under this Act where there fall to be assessed damages payable to a widow in respect of the death of her husband.").

The noble and learned Lord said: My Lords, Amendment No. 4 is consequential upon Amendment No. 1. I beg to move.

On Question, amendment agreed to.

The Lord Chancellor moved Amendment No. 5:

Page 5, line 11, at end insert—

("(3A) In an action under this Act where there fall to be assessed damages payable to a person who is a dependant by virtue of section 1(3)(aa) above in respect of the death of the person with whom the dependant was living as husband or wife there shall be taken into account the fact that the dependant had no enforceable right to financial support by the deceased as a result of their living together.").

The noble and learned Lord said: My Lords, Amendment No. 5, which I now beg to move, has been partly discussed under Amendment No. 1, but I can see that the noble and learned Lord has something more to say, and we shall be glad to hear him, so I beg to move.

Lord Elwyn-Jones

My Lords, reverting to Amendment No. 4, the only matter that concerned me—if I have permission to raise it—is that I doubt whether Amendment No. 4 flows from Amendment No. 1, Amendment No. 4 deals with the assessment of a widow's award.

The Lord Chancellor

My Lords, I noted that, to my alarm and despondency. All my briefs say that it is to be taken with Amendment No. 1. I am rather shocked, but I do see the point raised by the noble and learned Lord.

Lord Renton

My Lords, if I may presume to help—and when two noble and learned Lords are in doubt, it seems presumptious that I should say a word—it seems to me from the reference to Section 1(3)(aa) in Amendment No. 5 which refers specifically back to Amendment No. 1 that it must at least be connected and, I should have thought, flows directly. I hope that I may be in order now in thanking my noble and learned friend the Lord Chancellor for the explanation he gave to the point that I raised on Amendment No. 1.

The Lord Chancellor

My Lords, I think that I may now be in a position, having stalled, and visibly so, to solve the conundrum which puzzled my noble and learned friend and, for the moment, floored me. Amendment No. 4 is paving for Amendment No. 5.

Lord Elwyn-Jones

My Lords, reverting to Amendment No. 5, the noble and learned Lord was good enough to say that he would give further thought to the suggestions that emerged in the course of the discussion. I am content to leave the matter there at this stage.

On Question, amendment agreed to.

7.43 p.m.

Lord Foot moved Amendment No. 6: After Clause 5, insert the following new clause:

("Recovery of expenditure from public funds.

.—(1) Where a person has suffered personal injuries resulting in the expenditure of public funds on his behalf which are—

  1. (a) wholly or partly attributable to the maintenance of the injured person in a hospital, nursing home or other institution; or
  2. (b) attributable to the provision of medical treatment or attention to the injured person; or
  3. (c) attributable to the provision of any vehicle, special clothing, appliance or other item to the injured person rendered necessary by reason of his injuries; or
  4. (d) paid to the injured person in respect of an industrial injury benefit or industrial disablement benefit or sickness or invalidity benefit,

the amount thereof shall (subject to subsection (3) below) be recoverable by the person, institution or body expending such public funds from the person (other than the injured person) responsible for the act or omission which resulted in the said injury and such right of recovery shall survive the injured person's death irrespective of whether the death was a result of the injuries so suffered.

(2) Upon the injured person or other person on his behalf making a claim for damages in respect of his injuries that person shall be required—

  1. (a) to give notice in writing within seven days of a claim having been made to the person, institution or body which has expended public funds to or for the benefit of the 1114 injured person under subsection (1) above that a claim has been made and against whom and to provide the said person, institution or body with such further details of the claim as may reasonably be required to ascertain the amount so expended on the injured person's behalf; and
  2. (b) to include in his claim (unless the said person, institution or body shall have already made a claim under subsection (1) above) a claim for the amounts expended out of public funds to or for the benefit of the injured person and (subject to subsection (3) below) to pay to the person, institution or body concerned such amounts as are recovered by him by way of damages in respect of such expenditure.

(3) The amounts recoverable under subsections (1) and (2) above from the person against whom the claim is made shall be—

  1. (a) in the event of his being wholly liable for the injuries and consequential loss, the whole of such expenditure, or
  2. (b) in the event of his being only partly so liable, that part of such expenditure as is proportionate to his partial liability.

(4) It shall be the duty of any person who is required by statute to insure against third party risks in the event of the death or bodily injury to a third party to effect such additional insurance as shall be necessary to cover the risk of a liability under this section.

(5) The amount of the expenditure of public funds under subsection (1)(a) and (b) of this section shall be ascertained by order made by statutory instrument by the Secretary of State for Social Services in exercise of his powers under section 5 of and Schedule 3 to the Public Expenditure and Receipts Act 1948 and all other powers enabling him in that behalf.

(6) The amount of the expenditure of public funds under subsection (1)(c) of this section shall be ascertained by reference to the actual cost to the Area Health Authority or hospital by which the injured person receives the provision of the items therein specified.

(7) The amount of expenditure of public funds under subsection (1)(d) of this section shall be ascertained by reference to the actual amounts paid to the injured person by way of any or all such benefits therein described from the Department of Health and Social Security for a maximum period of five years commencing with the date of the first payment to the injured person.").

The noble Lord said: My Lords, this is a matter which I raised at the Committee stage. I have been encouraged to raise it again at Report because on that occasion the noble and learned Lord the Lord Chancellor thought that it contained an interesting and important point and went so far as to invite me to raise it at Report. He may be thinking better of that now. He said that he would either write me a letter or else I should raise it on Report. I have not had a letter. Not receiving letters from the noble and learned Lord is one of the grave disappointments in life that one must sustain with as much fortitude as one can muster. Nevertheless, in view of that encouragement I take leave to raise it again. I recognise that we are short of time and I do not want to occupy the time of the House more than is necessary. May I say in two sentences what is the present state of the law on the matter which I am raising in this amendment and what the state of the law will be when this Bill becomes law.

Under the present state of the law, where a person suffers personal injury as a result of the wrongdoing of somebody else he is entitled to claim as a general rule against the wrongdoer the damage that he suffered and the disability and the rest. So far as he can be compensated in money, he is entitled, if the tortfeasor was wholly responsible, to recover the full damages which flow, not too remotely, from the wrongdoing. Also, under the present state of the law, when he is assessing his losses he is not entitled to make any claim with regard to any free treatment or attention that he has received under the National Health Service, and he is only able to recover in part the benefits that he has received by way of disability benefit or something of that kind in relation to his loss of earnings. The two most important examples of that are, first, that the claimant cannot make a claim in respect of the expenses incurred by the state in treating him under the National Health Service and he cannot make any claim (or only a partial one) in regard to any expenditure by the State by way of disability benefit or sickness benefit or the like.

That, I think, is perfectly fair and proper as between the claimant, the injured person, and the tortfeasor; because it would be quite wrong if a person was able to gain an advantage to be over-compensated for the injury which has been done to him. When it comes to the situation between the state and the tortfeasor, I suggest that it is really not fair and proper, because the expenditure incurred, for example, by a hospital in treating a person injured in a road accident is an expenditure for which the tortfeasor is just as much responsible as he is for the damage suffered by the injured person himself. As things stand at the moment, with some limited exceptions with which I will not bother the House, the state is unable to recoup from the wrongdoer all the expense to which it is put in these different ways in looking after the interests of the injured person.

My amendment is an attempt to remedy what I hope the House will think is a very unsatisfactory state of affairs. The importance of this matter in financial terms—and I will not say that it could not be exaggerated—is certainly very substantial. The Pearson Commission looked at this matter and came to the conclusion that, taking road accidents alone, injuries caused by road accidents—and this was in 1976, quite a long time ago—were such that they calculated that they cost the National Health Service close on £50 million a year. I imagine that the figure now, with the decline in the value of money, must be much greater. They came to the conclusion that less than 5 per cent. of the expenditure is ever recovered by the state under the limited provisions of the Road Traffic Act.

I think it follows from that, that if you try to calculate what are the losses to the state, to society, from injuries of all kinds—industrial injuries, Road Traffic Act injuries, and so on—you are talking about a figure which (as I suggested in Committee) may run to not less than several hundred millions per annum. If that haemorrhage could be staunched, it would be of enormous advantage to the National Health Service, which is short of money on every account, and would be a very important contribution to the social welfare arrangements in the society in which we live.

I do not disguise that there are great difficulties in "clawing back"—the words used by the noble and learned Lord on the last occasion—the money which the state expends as a result of injuries of that kind. The first question which arises is whether it might be possible for the State to recover some part of the money simply by giving the State or the institution concerned, the hospital and so on, the right itself to bring an action against the tortfeasor. But as soon as one contemplates that one realises that the practical difficulties are insuperable. Our hospitals and doctors and so on are ill-equipped to investigate the circumstances of every case that comes into their casualty departments, to try to find out who was responsible and pursue an action against that person. That is the difficulty which has faced everybody I know who has considered this matter.

The solution—and I hope it is something of a solution—which is offered by my amendment is simply this. It is to allow and require an injured person who puts forward a claim for damages on his own account for personal injuries to include in his own claim the claim of the state for the money that it has expended on his behalf. In other words—to put it in untechnical language—if a person puts forward a claim on his own behalf, he should be obliged to act as the agent of the state in recovering for the state the money paid out on his behalf.

May I now go through this amendment and give the effect of the different subsections? The first simply declares that, where a person has suffered personal injuries resulting in the expenditure of public funds of various kinds, then the state has a right to recover that expenditure from the offending party. It is purely declaratory. If left there that would not solve the problem at all, for there would be the practical difficulties of the state pursuing claims of its own on its own.

The next subsection is the heart of the matter. Under it, a person claiming damages against another for personal injuries would be required first of all to notify the National Health Service, the hospital or whoever it may be, that he has put forward a claim. Next, he would be required to provide to that institution, hospital or whatever it might be, information that he had made the claim and to give them such details as might be necessary in order for them to estimate what expenditure they had gone to or would go to on his behalf.

The third requirement is that that person, when he came to put forward his claim, should include in his own claim the claim of the state. There are precedents for that. If, for example, today a person is injured at work and his employers make up his wages to him during the time that he is incapacitated, he is entitled in his own action to sue for the full loss of earnings disregarding the amount paid by his employers. If he recovers that from the offending party, he is obliged to pay that money to his employers—to pay back to them what he has received. That is perfectly practical and goes on every day of the week. The fourth requirement is that monies recovered on behalf of the state should in due course be passed over to the institute concerned.

Subsection (3) is simply to ensure that, where for example there has been contributory negligence on the part of the injured person, the money recovered by the state does not exceed the proportion in which the tortfeasor is liable. If the tortfeasor was not a tortfeasor at all, and was not responsible for the accident, then of course the state would have no claim against him at all.

Subsection (4) is of little consequence. It merely requires that where today a person is obliged to take out insurance against third party risks, he shall additionally take out insurance to cover these liabilities which are dealt within the amendment. Subsections (5), (6) and (7) are concerned with how the various kinds of expenditure set out in subsection (1) are to be assessed and by whom.

The overall effect of this amendment, I hope, is this: it means first of all—and this is the vital aspect—that the public institution which spends the money will be concerned only to calculate the amount of money which has been or will be expended. That will be the limit of their obligation. That I suggest ought really to be a simple operation.

May I now make some general observations. The question of how one can recover these monies from the state without involving an enormous administrative cost and very complicated procedures has been the bugbear in this problem for a very long time. The noble and learned Lord on the last occasion made some reference to this in a slightly different connection. He said that he was advised that the administrative costs —and, with his usual modesty, he said he was moving again well outside the field in which he was entitled to step with confidence—of any clawback scheme would be huge and would probably outweigh any repayment that the relevant public authorities would receive. I hope that it is not going too far to say that, so far as I can see, under the proposals which I have made those administrative costs would he negligible. The costs in which the state departments would be concerned would be those in calculating the amount of the various benefits which they had expended for the benefit of the injured person.

I received considerable encouragement to pursue this matter as a result of something which happened after the last Committee stage. It was brought to my attention that the Secretary of State for Social Services, Mr. Fowler, had made a speech in Birmingham in which he had been talking about the various Rayner-type scrutinies which were to be carried out inside the National Health Service. He said this, among other things: One subject has already been chosen: a study of the collection of the charges due to health authorities where treatment is given following road traffic accidents. At present the administrative arrangements are such that we may be collecting from insurance companies only a small percentage of what is due. The scrutiny will look critically at these arrangements and consider how within present policy we can recover more in a cost-effective way". It is encouraging to me that the noble and learned Lord's right honourable friend should be most actively considering this matter at the moment. If anything that I have said about it commends itself to the noble and learned Lord as being sensible, he might possibly be willing to make some communication to his right honourable friend as to how the problem that he foresees might be met.

The noble and learned Lord, on Second Reading, at the very beginning of these proceedings, drew attention to the fact that it would not be possible, because of the exigencies of parliamentary time, if this measure is to get on to the statute book (and I am sure we all want it to do so) to take on board any controversial matter—even a meritorious matter—because that might mean losing the Bill altogether. I think I understand that and I think I understand the noble and learned Lord's difficulty. Therefore, it is beyond my reasonable expectations that he would be able to say today that this amendment was acceptable. So what I am doing today is continuing the dialogue into which I entered with the noble and learned Lord on the last occasion. Perhaps the most I can hope for is that he may be able to say that he thinks there is some small virtue in my proposal. I beg to move.

8.1 p.m.

The Lord Chancellor

My Lords, I am sure the entire House is very grateful to the noble Lord, Lord Foot, for raising again this important matter, and especially for his having taken so much trouble to spell out what he wished to enact in the terms of a concrete amendment which could generate a discussion, however brief. I think I can comfort him in one respect. He was not correct in saying that I had not written a letter to him. I did write him a letter on the 30th April and I have just put a copy of it into the hands of his noble friend Lord Wigoder so he will have the opportunity of reading it. Evidently the original miscarried and what he is now going to read is a carbon; but it was a reasonably encouraging reply and I do not think he need be ashamed of having taken this trouble, because it enables one to say several things.

He is of course perfectly correct in saying that there are extraordinary anomalies in accident cases surrounding this question of benefits received during disability and also the cost to the state of providing treatment. He is also perfectly correct in thinking that his remarks will receive a warm welcome in principle, without necessarily endorsing his particular proposal, from my colleague, to whose speech, I think in Birmingham, he has just referred. But there are difficulties which I do not think this amendment will solve. First, we must realise what a complicated system he is setting up. He is saying that there should be a legal obligation on the injured party who is the plaintiff in the proceedings against the tortfeasor, to include in his claim the amount notified to him as the appropriate amount by the relevant public body. I do not know how that is to be enforced but that is what he says. He then says that the injured party is under a legal obligation to notify and to include in his claim the amount which is claimed by the appropriate public body. Again, I am not quite sure how that is to he done or enforced.

Thirdly, he is saying that the amount expended on the plaintiff, the injured party, would be calculated in the case of hospital medical costs by statutory instrument by the Secretary of State for Social Services and in the case of special vehicles or clothing—we all know in substance what that means—by asking the relevant district health authority and, lastly, in the case of industrial and sickness benefits by asking the Department of Health and Social Security as is done at present for the purpose of the half offset allowed under the existing law. Ministers are inclined to agree—certainly my colleague would wholeheartedly agree—with the noble Lord, Lord Foot, that the tortfeasor should not be able to gain a benefit at the expense of the state as a result of his wrongdoing in respect of the money which the state has expended upon the injured person. That, obviously, as a statement of principle has great merit. Equally, we think, and I have always thought myself, that the victim himself should not benefit twice, as he does at the moment in respect of half the benefits he receives.

I recollect that when I challenged this, I think in 1948, Sir Hartley Shawcross, as he then was, the Attorney-General, defended it and was only able to defend it on the basis that it was a typical British compromise—which is what is always said when you are doing something which is utterly unjustifiable. At any rate, so far I think we are ad idem but the noble Lord, Lord Foot, underestimates the fact that there is no sanction to enforce any of the proposals he puts forward in his amendment, and I do not know how one can be provided. I think he overlooks the fact that the great majority of personal injury claims are settled out of court before coming to a judgment.

Here, of course, the injured party would be in something of a dilemma. He is being compelled to put in his claim amounts which are not owed to him at all but owed to the state. In the course of the compromise which he then has to negotiate with the insurance company or the defendant, he has to ask how much of his own legitimate claim he will abate in order to achieve the 100 per cent. which he will have to account for to the state. It reminds me particularly of the late Mr. Martin O'Connor, who was a well-known counsel in my youth and called the same day as my father, who was said to indulge in speculative practices. He said on one occasion when his client resisted a reasonable offer by the defendant, "This is the last time I will risk my fee in the interests of my client". I am not at all sure how the injured party will manage to negotiate a settlement when he is partly acting as a state agent.

Then, of course, the question is how the state is going to get it back from the injured party, because there may very well be a second set of litigation to deal with that. There is also the fact that Lord Pearson's Commission recommended that the half recovery of social security benefit should be abolished and that all social security benefits should be offset. I think that is something which the Government is still considering with a good deal of sympathy.

Perhaps the noble Lord, Lord Foot, underestimates the actual cost, which he thought would be nil or very small. I am advised, though again without undue modesty—at any rate I have plenty to be modest about —that the scheme would require a complex and expensive recording and accounting system to back it up. Hospitals would have to be prepared for any case of injury to be the subject of subsequent proceedings. Therefore, every case would have to be documented in a way which would allow an accurate assessment of costs to be made at a later date.

Lastly—and perhaps this is the point at which the noble Lord, Lord Foot, and I can become ad idem again—we have this scrutiny under Sir Derek Rayner currently being carried out on the collection of charges due to health authorities when treatment is given following road traffic accidents under Sections 154 and 155 of the Road Traffic Act 1972. At present it is estimated that hospitals receive a small proportion of the money that may be due to them under this scheme, and the scrutiny is intended to consider how the recovery of their costs may be made more cost-effective.

What I would rather suggest to the noble Lord, Lord Foot, who I think has performed a notable public service by using this debate as the occasion for ventilating this question, is that perhaps it would be wise to leave it there for the moment. Perhaps he would care to read my letter at his leisure and I hope the original will actually arrive ultimately. I cannot in the meantime accept this particular amendment, for the reasons I have given.

Lord Foot

My Lords, I am not sure whether I need the leave of the House to reply, but may I first of all apologise profoundly to the noble and learned Lord for not having read his letter until now. If there is any greater disaster in life than not hearing from the noble and learned Lord, it is to get a letter from him and then for it to go astray. I should like to apologise on my own behalf and on behalf of the Post Office.

The noble and learned Lord has spoken of the difficulties that are in the way of my proposal and, of course, I well understand them. It is a most difficult matter to know how to make the thing work. But with regard to the two points which the noble and learned Lord made, about how you were to get the claimant to put forward a claim on behalf of the state, and how you were to ensure that the monies received by the claimant in that way passed back to the public institution that paid, it has been suggested to me that there are two ways, in particular, of getting round that.

One of them would be to make sure that no insurance company would get a receipt in full and final settlement of somebody's claim, unless they had made the relevant payment to the state in respect of the state's claim. That would mean that no insurance company could ever write the thing off, unless they had met the state's claim at the time. The other suggestion, about the difficulty of getting a claimant to pass over the money which he recovers from the insurance company to the hospital or whoever it may be, might be met by giving the hospital or institution a charge over any damages recovered by the claimant, in much the same way as the Law Society, for example, have a charge upon any property recovered by a legally aided person to cover the monies which they have expended on his behalf by way of legal aid.

I shall not pursue either of those now, but I want to know whether the noble and learned Lord, in advancing these difficulties, is advancing them as difficulties to be overcome, or as difficulties which present an insuperable obstacle. I hope that he may be able to take the view that they are difficulties which it should not be found beyond the wit of man to overcome. The last thing I ought to say is that I very much appreciate the reference of the noble and learned Lord to what I have had to say on this matter. But it would be quite wrong of me to pretend that I am the sole begetter of this amendment. I am not putting it forward on behalf of any interested party, but the real work has been done by somebody else who is here in the House tonight. Mrs. Judith Preston-Rouse, who is a fellow solicitor—

Several Noble Lords


Lord Foot

My Lords, is that not in order? I will withdraw that. I am sorry, if I have offended against the rules of the House. But I should like to make it plain that this is a proposal which is not my own work, and that I am very much indebted to that person for the assistance which she has been able to give to me. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Denham

My Lords, I beg to move that further consideration on Report be now adjourned.

Moved accordingly, and, on Question, Motion agreed to.