Compensation Bill [Lords]

I cannot, because we are on a time limit—[Interruption.] I have given way already. Of course we want to encourage adventure and volunteering, but the existing law already provides for that. If it is true that the clause simply restates the law, the Government must accept that argument. Contrary to the words that the hon. Member for North-East Hertfordshire (Mr. Heald) tried to put into my mouth, I warmly welcome the idea that we should issue guidance and publications to explain the law as widely and fully as possible—but frankly, I do not think that the clause is going to be the talk of school staff rooms, or scout leaders in the pub after a volunteering exercise. The fact remains that people will be far more interested in the guidance than what the clause might or might not state. The real effect of the measure will be not to encourage volunteering, but to put young people at even more risk when they participate in adventurous activities. It will also discourage parents from allowing their children to undertake such activities. It will create different standards. For example, in relation to driving, a minibus of scouts going to camp would have less protection than a bunch of football supporters going to a match. The clause will lower safety standards, lead to fewer precautions and condone negligence. What responsible parents would allow their children to go mountaineering, open-sea canoeing or sailing if they were told, ““By the way, this is a desirable activity, so if Johnny or Jill is hurt badly, breaks a limb, becomes paraplegic, or is even killed, and if it’s our fault, there may be no compensation as a result.”” Clause 1 stinks, and must be withdrawn from the Bill. It does not restate the law, but weakens the position of the average ordinary person in the street. We should use the Bill to redress the balance. We should consider what needs to be done to improve the position of accident victims. There needs to be a clear exemption from clause 1 for employers’ liability cases, and from clause 2 for trade unions. We need to recognise that in the past the courts have, in many respects, failed accident victims, and we should take this opportunity to put right those mistakes. We have already heard at length about Barker v. Corus and other asbestos cases; we have heard about the pleural plaques cases; there is the Crown Proceedings (Armed Forces) Act 1987, about which I made a point earlier; and there are many similar points to be made about asbestos. But that is only the start. If an insurer makes an admission of liability early in the case, why should that admission not be binding on it? The case of Sowerby says that it is not, and when a case is further down the track the insurer can say that it has changed its mind and does not admit liability after all. How does that strengthen the rights of claimants and avoid the need for litigation? The Law Commission, in its 1999 report, made it clear that damages for personal injury claims were far too low. It recommended that in cases where general damages exceed £3,000 they should increase by between 50 and 100 per cent. The Court of Appeal considered that in the case of Heil v. Rankin, and did not do as the Law Commission recommended, but said that it was a matter for Parliament. It is a matter for Parliament, and we should take this opportunity to deal with it. This Government rightly introduced the system of periodical payments to allow those who are seriously injured to have compensation assessed and paid out over the rest of their lives. However, the system for indexing those payments is drastically wrong. It simply refers to the retail prices index and does not take account of the fact that many of the elements in those compensation awards are tied not to the RPI but to much higher indexes, such as the index of average earnings. We should use the opportunity of this Bill to put right that injustice and ensure that claimants receive the compensation to which they are entitled. The discount rate applied to an assessment of a future loss of earnings has been fixed at 2.5 per cent. since 2001. It is supposed to reflect the returns that a claimant can expect when investing his award, but unless it is reviewed regularly the discount rate does not accurately reflect market changes, which could put the claimant at a disadvantage. That, too, needs putting right, and the Bill is a vehicle by which we could do so. I agree with the hon. Member for Ryedale (Mr. Greenway) that rehabilitation is a crucial process for any injured claimant. There has been considerable discussion between the Government and stakeholders about ensuring early rehabilitation for claimants. Where liability is clearly established, insurers should have a statutory duty to ensure that funds are released to facilitate early, appropriate and independent rehabilitation. That would provide the impetus needed to ensure that rehabilitation becomes an integral part of the compensation system. Again, we could take the opportunity of putting such a duty in the Bill, but the Government have indicated that they are not prepared to do so. I was tempted to say that I would not vote for the Bill because of clause 1, which dramatically weakens the right of people in this country to compensation, thus pandering to the insurance industry, to the tabloids and to the myth of the compensation culture. But I shall vote for Second Reading because I passionately believe in the need for regulation of claims farmers, as set out in part 2. This is an opportunity to do some good in that respect, and the positive changes that I have advocated would take that even further. I first advocated regulating claims farmers many years ago, long before I came here, and I raised the issue at the very first meeting I had with a Minister in what was then the Lord Chancellor’s Department, back in 1997. Nearly 10 years on, I am very pleased that the Government have, at long last, recognised the problem and are dealing with it. This has been a serious problem since the 1980s, when claims farmers first got off the ground. I hope that the Government will reflect on clause 1. It has little, if any, support beyond the tabloids, and even that is not clear. It is not supported by the lawyers, by the Constitutional Affairs Committee or by my Committee. I understand from the hon. Member for Ryedale that it is not supported by the insurance industry. Nobody has a good word for it—except the Government, the official Opposition and the hon. Member for Canterbury, who thinks that it does something entirely different from what the Government say it does. It is opposed by the TUC, the Association of Personal Injury Lawyers and the Law Society—just about everyone who has the interests of the little man or woman at heart, as opposed to the multinationals. We should not pander to myths; we should look at the evidence and at the harm that clause 1 will cause. I urge the Minister to look at the impact of what could be a useful reforming measure and to get rid of clause 1. Let us go ahead with part 2, which is badly needed.