Compensation Bill [HL]

As I said in the debate on one of the earlier amendments, the law has got it about right. I am not sure that everyone would agree, but I do not think that there has been any very marked dissent from that. The speech made by the noble and learned Lord, Lord Hoffmann, in the Tomlinson case was robust and balanced and now lays down the law that has to be followed. The Government in their Explanatory Notes say that Clause 1 is intended to reflect the law. If so, it does not seem to be obviously necessary, but it does present a danger. The courts may regard it as saying something other than simply restating the law. The courts, after all, tend to regard legislation as creating new law. Therefore, the fact that this new provision appears in Clause 1 increases the risk of litigation because it makes the standing of existing case law uncertain. Is Tomlinson still the last word on the law or have we moved on from that? If so, how far and in what direction? A court can take into account Explanatory Notes as an aid to the interpretation of a statute, but it will not allow Explanatory Notes to override what it regards as the unambiguous meaning of a provision. Frankly, the Government are treating a real problem with a placebo. It may make you think you feel better, but it does you no real good. There has of course been some pressure that we should have a different Clause 1 that goes beyond the restatement of law and changes the law in favour of the defendants. That is something that we would object to. I believe that we should not lower the duty of care to a level at which injured claimants, many of whom are children, cannot recover damages where there has been genuine negligence as opposed to a justifiable acceptance of the risk. Some school trips are not well managed and involve running risks that are not proportionate. The fact that activities that may be desirable and carry a public benefit have inherent risks does not exclude the duty, even when you accept those risks, to minimise them so far as practicable. As I said in an example at Second Reading, if you consider a group that goes abseiling, which is a challenging form of adventure that involves risks, some of which are unavoidable, that does not exclude the liability of the leader of the group to ensure that all ropes are in proper condition, for example, and that everyone taking part is fully instructed and fully supervised. The real problem here is not in fact the substantive law of negligence but the cost of litigation and the consequential inflation of insurance premiums. A large proportion of the risky activities conducted by school groups will normally be covered by insurance. There are things that could be done about it. They cannot be included in this Bill, but there are things that should be seriously considered. We could, for example, make it a rule that where the damages awarded are less than could have been awarded under a small claims procedure, the court should normally limit the claimant’s costs to those recoverable under that procedure. That would certainly discourage the relatively small injury claims where, ultimately, damages are likely to be less than £1,000, which is currently the limit for small claims for personal injury. That should mean that there is much less litigation over minor damage from which there is recovery within a few hours or days and which leaves no permanent damage to the person who suffers it. The noble Lord, Lord Hunt, mentioned that we have problems with contingency fee agreements, which can impose an excessive cost burden on defendants who have to pay not only the ordinary costs but a substantial mark-up over them as well. Although I would not at this stage propose any specific changes to the rules about CFAs, because that involves complex issues, it could be looked at. Another suggestion is that the Government could help with the setting up of a self-financing mutual insurance scheme for the activities of schools and other charitable groups—Scouts and so on—so that they do not have to pay commercial premiums. Mutual insurance can be of considerable assistance. Fifteen or 20 years ago, when the Bar found extreme difficulty in getting professional negligence insurance from commercial organisations at reasonable rates, we set up our mutual insurance scheme, which has been highly successful. There are ways round the problem. Therefore, Clause 1 is at best unnecessary and could increase uncertainty as to the law and lead to yet more litigation to resolve that uncertainty. We will bring the amendment back; we will have to consider whether we will press it to a vote on Report in due course. The idea raised by the noble Lord, Lord Hunt, of referring the matter to the Law Commission is an extremely good one. If it were no more than a simple restatement of the law, I could understand why the Minister did not think it necessary to do so. However, our debate makes it clear that there are without doubt ramifications and implications from Clause 1 that make it highly desirable that it be referred back to the Law Commission. In view of the stage which we have got to, I accept that we will need a quick reply from the Law Commission; I do not suggest that the matter be sent for a full-scale review, which might take months. The commission is perfectly capable of providing a quick discussion and report that will indicate whether, in its view, the clause implies any changes in the law and, if it does, whether it is possible to suggest alternative wording that would avoid the risks.