Compensation Bill [HL]

My Lords, it would not be appropriate to determine what is ““desirable”” on the basis of money, but the courts have a long track record in determining what should happen. For example, my daughter is a Girl Guide. We pay money for her to undertake activities—sailing and so on—with the Girl Guides. It is true that it does not make a profit, but presumably the centre to which it pays the money may do so. If my daughter were on a Guides’ activity and there were an issue, I would expect the courts to consider the activity, not the money, if I can put it that way—but that is not for me, fortunately. As the noble Lord knows well, I am not a lawyer, and it rather shows on occasion. The courts are well able to determine what they are looking for in ““desirable activity””. As I say, the term captures the current law, giving the courts the flexibility to consider the issues and will enable them to interpret what is right and proper. It is not for us to do that. I am sure that we will return to the issue and debate it in Committee, but I hope that noble Lords will see what we have sought to do. Whether they agree that we have achieved it will be for our discussions. We have done in it in a way that we think does not hamper the courts but recognises that organisations want us to do something about their real concerns. That returns us to the points made by the noble Lord, Lord Lucas, and the reflections from a number of organisations with which I have had the good fortune to meet, including the all-party group under the chairmanship of Julian Brazier, Lembit Öpik and Derek Wyatt, who have discussed the issues with me. I shall now turn to Part 2, as I have dealt with all the issues on Part 1. I indicated to the noble Lord, Lord Goodhart, that we were not being premature. I recognise the role of delegated powers, but it is important that we provide some flexibility in the legislation. I shall briefly go through the points raised. The noble Lord, Lord Brennan, asked about unqualified persons providing competent services. We anticipate that, when we grant authorisation to provide claims management services, the regulator must consider criteria relating to competence or suitability. That will be included in the regulations under Clause 7. The noble Lord, Lord Hunt, raised a number of issues. The power of the Secretary of State to regulate is an interim measure, and we expect it to be implemented only if the designated body fails to deliver the regulation of the sector. We envisage that the legal services board, which will be established as part of the wider legal services reforms that have been indicated in our White Paper, will replace the Secretary of State as the oversight regulator. We plan to bring forward the legal services Bill for pre-legislative scrutiny later this Session, so we hope that noble Lords will see how everything will fit together. But we want to get on with it and we envisage that regulation will commence towards the end of 2006. Clause 2(2)(e) will allow the Secretary of State to bring at-risk sectors into the regulatory net. We envisage that the first order will go beyond the confines of personal injury and include the areas in the short list that I mentioned in my opening remarks. We want to be flexible about the regulator—the noble Lord, Lord Goodhart, rightly raised that issue—and we have commissioned an independent expert to help us with that. I will advise noble Lords on the findings well before the Bill leaves your Lordships’ House. Designating the Claims Standards Council as the regulator may be the quickest and most effective method, but the final decision on what we do will be informed by that expert advice. I am advised that the report will be with me before Christmas, and as soon as I am able to give your Lordships information about that, I will do so. We have tried to ensure that we have the flexibility to make sense for the future and to get on with the job. The rules under the code of practice will also ensure that providers adhere to high standards, and we want to ensure that those apply across all the marketing activities. The rules will make it clear that advertising must not be misleading or inaccurate. With regard to the point raised my noble friend Lord Brennan, the charges or fees for providing claims management services must be made clear to the claimant at the outset and they must be proportionate to the amount of work involved. At present, we are carrying out research for the Advertising Standards Authority to enable us to consider whether its regulation is appropriate. The research is jointly commissioned and funded. I have watched all the TV advertisements available on the issue and have discussed the matter with the industry. Most of the industry works extremely well and is highly reputable, but we want to ensure that television and other advertising is considered appropriately. As noble Lords will be aware, we are also looking at advertising in hospitals, where we need to consider the benefits to patients of knowing how to make a claim and what is being suggested to people who may be vulnerable. We are alive to that issue, but we do not believe that it is a matter for the legislation at this point. I end as I began. I am grateful for the interest shown by noble Lords, and I very much look forward to the Committee stage of the Bill. I hope that noble Lords will understand our ambitions for Part 1 and that they will see Part 2 as a necessary step towards protecting consumers. Noble Lords have accepted that we will take on board the issues raised by the Delegated Powers and Regulatory Reform Committee, and therefore I hope that they will feel that the Bill is worthy of support. I also hope that they will feel that, in order to get it on to the statute book and get on with it, it is worthy of a speedy passage through the House. On Question, Bill read a second time, and committed to a Grand Committee.