Compensation Bill [HL]

I am very grateful to the noble Lord for his support in the idea of referring this matter to the Law Commission. In considering Clause 1, I think that there are a number of developments taking place—and this Bill has only just started its progress through this House. It has yet to reach the other place. A Select Committee is considering these issues and still has to report. It is going to be a matter of months before the Bill becomes an Act and receives Royal Assent, so there is time for the Law Commission to give us the benefit of its views; it is experienced in this area and has produced reports of some considerable detail in the past which have guided Parliament as to the right way forward. As the Minister has such an open mind and is genuinely seeking the right way forward, I think that I speak for all noble Lords when I say how useful it would be to be able to add to the advice that we receive the view of the Law Commission. The Law Commission may say that the Minister is absolutely right and that the clause adds nothing, does not amend legislation and is a useful restatement of the law. Of course, that is a very helpful move with regard to the Government and the rest of us. But it may be that, in respect of the Minister’s plea for those who criticise to come forward with an alternative solution, the Law Commission may have one in mind, as it is well experienced in resolving such problems. So I strongly welcome the support of the noble Lord, Lord Goodhart, in that regard. I found myself to some extent in sympathy with several other points that he made, though not with all of them. There is no doubt that conditional fee agreements have added to the cost, and we must diagnose why that is. One of the problems was that CFAs were introduced without any research or pilot schemes; it almost seems as if it were an imperative overnight, as a result of Treasury pressure, to find some way in which to replace the civil legal aid system, with a very good sieve that was always there through local legal aid committees to decide whether claims should be supported. Now it is open season; the costs of dealing with these matters have gone up significantly and, as the evidence that the Select Committee has taken shows, even claimant lawyers admit the level of legal cost has now reached significant levels in comparatively small claims. I am sure that the Minister has had an opportunity to read Care and Compensation, which the Association of British Insurers has produced. One point raised by the noble Lord was about the small claims track for personal injury claims; one recommendation of the ABI report was that the limit could easily and fairly be raised from £1,000 to £5,000, which would bring it in line with the small claims track for the majority of other claims, and remove substantial costs for a large number of straightforward and relatively low-value claims. That limit was set in 1991, 14 years ago, and has not been amended since. I hope that the Minister will give us an indication of where she is with the consultation on amending the limit, which I understood was proposed, and, if there is to be consultation, when it is anticipated it will take place. Will she also give her reaction generally to the point being made that it is 14 years since that limit was raised? The situation and the landscape are different, and we are having to incur unnecessary legal costs which often fall on public bodies as well as on those who often have to deal with the claims on behalf of business, commerce and local authorities. I suppose that what I am particularly referring to are those many cases in which there is frequently no dispute about liability and no dispute about the right level of compensation. We have to find ways of reducing the cost of litigation. I spoke in a debate earlier this week where I was able to quote the State of the Union address—and I know that the Prime Minister pays very close attention to what is said by the President of the United States. Since the Colgate summit—so named because both of them came out wearing such broad smiles that we could see their beautifully polished teeth—there has been much co-operation between the United States and the United Kingdom on a range of issues. In the State of the Union address, the President said that industry and enterprise are being held back by the compensation culture in the United States. I am not saying that the American system is here; I hope it never will be, with its problems of jury trial, contingency fees and joint and several liability, but the speech was a reminder that you can harm business and enterprise by allowing a compensation culture, or, at least, the perception of it, to gain strength. It would be very helpful to hear from the Minister how she proposes to deal with that. Finally, I think we are all much of a mind that, although the Government have come forward with the best of intentions in Clause 1, before we could possibly agree that it stands part of the Bill, we need to get meaningful responses from the Minister on a range of issues that have been raised throughout this debate. There are more issues, and I hope we will have time for them in this Sitting of the Committee. Answers are required to a whole range of questions. I pay tribute to the way in which the Minister has approached Clause 1 with such an open mind and such an open house. I warmly commend her for that, and I hope that she will be able to give us some further examples of that welcome attitude on the part of the Government.