Compensation Bill [HL]

Perhaps I may offer a little prediction. I am very doubtful about whether the Bill will change the size of the market. It is much more likely to shift the business from one place to another. I do not see why the Bill should affect people’s propensity to make claims. Very likely, it will affect where they go to make them. I agree with the noble Lord, Lord Goodhart, that we do not want to go down the excessively litigious and compensatory road of the United States of America. But when a society gets richer, it tends to have more time to think about money. Even though it has more money, it tends to pursue even more money if it can. I believe that on the whole the number and type of claims will increase and not diminish. So, if we regulate the market, the total of the business is unlikely to diminish but it will shift to a different supply pattern. The Explanatory Notes state:"““Only those claims management services that the Secretary of State prescribes by order will be subject to regulation. The Secretary of State can therefore target areas that he considers to be at particularly high risk””." I should like to understand more about the Secretary of State’s intentions in regard to those two sentences. In any marketplace, there is always a problem of defining the market, which is a competition commission problem. Once the market has been defined on some basis, how does one draw lines in order to restrict the market that is to be regulated in the way described in the Explanatory Notes? From that follows the questions: how many operators do you expect there to be; what sort of size are they likely to be; and, how can you make the system self-financing?