My Lords, I am strongly in favour of the principle that informs the amendments in this group, which has been set out in such detail by my noble friend Lord Howarth of Newport. At Second Reading, the Minister in explaining—and, I dare say, in justifying—the part of the Bill that allows for the recovery of benefits, relied on the principle, with which we all agree, that nobody should be compensated twice. However, until then he had explained in some detail, in order to explain the 70% of average as a payment to mesothelioma sufferers and to defend it against the argument that it was insufficient, that we were dealing not with a compensation scheme at all but with a payments scheme. As I pointed out strongly in my contribution at Second Reading, it is inconsistent to have the same two arguments in relation to the same legislation. Either this is a compensation scheme or it is a payment scheme.
My noble friend Lord Howarth of Newport, in trying to devise a justification or a reason for this, was being generous to the Government. He has observed from a sedentary position that he did not mean to be; I know that, but he was. This is a payment scheme until we come to compensation recovery, because if it were a compensation scheme, all the justifications for averaging and for taking percentages of averages would fall away. They would be intellectually incapable of being defended. However, one comes to the point at which it is clear that the Treasury wants to try to recover some of this money as if it was compensation, so it has to become compensation or quasi-compensation to justify that. One can then deploy the high-minded principle that no one should be compensated twice for the same loss. I have some sympathy for the Minister in having to ride these two horses, and I hope that he is not torn apart by them. However, as I said at Second Reading and as someone once said to me when I was a Minister, if you cannot ride two horses at once, you should not be in the circus.
The truth is that that is what lies at the heart of this issue. The justification for recovering benefits paid to people through the compensation recovery process is not because people cannot be compensated twice, it is just because the money is there and it can be recovered. It is because it can be done. To some degree, given that the Treasury has inadvertently been subsidising the insurance industry through a genuine compensation scheme in the past, perhaps there is some justification for trying to get some of the money back, and of course we are living in difficult financial times. I understand
that, but I would like the Minister to explain in simple terms why this is being done rather than by seeking some justification in the principle that informs compensation recovery.
The compensation recovery system is set out in quite complicated law called the Social Security (Recovery of Benefits) Act 1997, as now amended, and in a variety of subsequent Acts of Parliament. It applies throughout the United Kingdom. I was not present for the earlier debate about the calculation of the average that would inform the payment, but there are substantial differences between awards for mesothelioma in Scotland as opposed to the rest of the United Kingdom. The Scottish courts are much more generous to mesothelioma sufferers than are the English courts and award substantially more in damages. However, compensation recovery law is consistent throughout the United Kingdom.
If Amendments 20 and 21 were to be accepted, my noble friend Lord Howarth would have created a device to defeat the Government’s ability to recover compensation at all by designating all payments as being for pain and suffering, and through the second of the two amendments would discount all payments for pain and suffering from recovery. He is wise to do this because that is the way the Act operates at the moment. However, thanks to some of my colleagues in the legal profession in Scotland, I have a pretty exhaustive list of all the heads of damages litigation that are not offsetable in relation to benefits. The list is the best part of half a page long. I will spare noble Lords the whole list, but it moves from pain and suffering to loss of future earnings, and it goes into some detail. All of them are component elements that one would look at if one were calculating the level of compensation payment due to a mesothelioma sufferer as a possible head of damages.
The thing about this list is that it lies behind all the settlements that form the history of the settlements that in turn have informed the average, from which the Government will take the 70%. They are not irrelevant to the calculation of the payment that will be made; they are at the heart of it. If the payments were made through a court process of compensation, a very small number would allow for benefit recovery: substantially, they would not allow it. There is a lot to be said for treating these payments, which are informed in that way, in the same way as one would treat compensation. Not the least that can be said in favour of that proposition is the fact that the Government cannot justify recovering any benefits unless they can use the word “compensation” against the payments.
I will make a final point to the Minister that is not reflected in an amendment. I would like to know his justification for this situation. If, having gone through a process of looking at historical settlements and averaging them one is then justified in making a payment that is 70% of that average, why is one justified in taking 100% of the benefits of that 70% settlement? Why do we not at least restrict the recovery of the benefits to the same percentage that we apply to the calculation of the payment?