NHS Redress Bill [HL]

: My Lords, it is intended that the redress scheme will provide for financial compensation to be offered, and Clause 3(4) sets out some of the parameters of such financial compensation. It allows the scheme to specify upper financial limits for compensation. As drafted, this may be an upper limit on the total amount of financial compensation that may be included in an offer under the scheme, or an upper limit on the amount of financial compensation that may be included in an offer in respect of a particular matter, or both of these. If no total upper limit is specified then an upper limit on compensation for pain and suffering must be specified. That is the starting point. It is our stated intention that financial compensation offered under the scheme will be broadly equivalent to the level of compensation that would be provided in a successful claim before a court. The noble Earl, Lord Howe, acknowledged that as one of the considerations that would be taken into account by the NHS Litigation Authority in making an offer. In Committee, a number of noble Lords raised concerns that patients might not receive financial payments equivalent to those they might expect from the courts. Concerns were also raised that if limits were imposed on particular elements of a claim, more people would be driven to the courts rather than encouraged to use the scheme. As I stated in Committee, it is not currently intended to use the power in Clause 3(4)(d) which allows upper limits on individual heads of damages. We do not intend to impose caps on the level of special damages that may be offered under the scheme. I said I was willing to consider removing it. Amendment No. 16 removes the power in Clause 3(4)(d) to specify an upper limit in respect of individual heads of damages, other than a single overall upper limit in respect of damages for pain and suffering. The effect of the amendment would be to allow the scheme to provide either for an overall upper financial limit, or an upper limit on the amount of damages for pain and suffering only. This amendment will prevent the scheme from providing for a double cap. It will not be possible to have an overall cap on the total amount of financial compensation and a second cap on the amount that may be offered in respect of a particular matter. The scheme will not be able to specify any other limit on what may be included in an offer of financial compensation. No caps on special damages will be possible. The intention is that the scheme will provide for offers of financial compensation to be broadly equivalent to the level of compensation that would be provided in a successful claim before a court. I remain aware of noble Lords’ concerns over the appropriateness of setting an upper financial limit for claims under the redress scheme. I understand the arguments that the noble Earl, Lord Howe, has offered on Amendments Nos. 15 and 17, which would remove the power for the scheme to set any upper financial limit. I was very pleased that his expectations of my response were extremely low. I do not wish to disappoint him. However, we believe it is vital to the successful operation of the scheme that such a limit is set. Concentrating on the lower-value claims will do the most to reduce disproportionate legal costs. I remind noble Lords that we arrived at the figure of £20,000 as the upper limit on the amount of financial compensation that may be included in an offer under the scheme after examining existing legal claims. The number of low-value cases settled by the NHS Litigation Authority in 2002–03 and 2003–04 was 4,090 and 5,690 cases respectively. That shows that legal costs in those cases were disproportionately high for cases where the level of settlement was up to £20,000. Cases settled where the award of damages was above £20,000 show a significant reduction in the proportion of legal costs to damages. That is why we settled on the £20,000 limit. Setting an upper limit supports the scheme’s aim of offering a swift response to the more straightforward and therefore lower-value cases and allows scheme resources to be focused on cases where such an approach would be of most benefit to patients. It is felt that complex cases should continue to be dealt with outside the scheme. As I have stated, it is intended that offers made under the scheme will be broadly equivalent to an offer made under a successful claim before a court. Where a case is felt to fall just above the £20,000 threshold, it may be appropriate for that case to be referred to the Clinical Negligence Scheme for Trusts, and resolved outside the scheme. We have undertaken to review the working of the scheme after three years, with a view to considering whether it would be appropriate to order the limit, or apply a limit on the pain and suffering element only. We have not ruled out change, but we must start somewhere. It is most appropriate to start with the ceiling of £20,000. Because provision is made to settle that limit in secondary legislation, it will be easy to adjust that limit without coming back to Parliament for amendment to primary legislation. That is why we disagree with the noble Earl, Lord Howe, although I acknowledge the eloquence with which he advocated his case.