Compensation Bill [Lords]

I wish to declare an interest as a member of the Law Society. Like Members on both sides of the House I warmly welcome the Bill, particularly part 2, although I do have reservations about part 1 which I will touch on later. Regulation of the activities of these so-called claims farmers—an expression which appears to have supplanted the traditional ““ambulance chasers””—is long overdue. Whether or not there is a compensation culture in this country is a matter of debate, and it has been debated today. The Better Regulation Task Force took the view firmly that it was a myth, and certainly it appears that costs in negligence actions in this country are considerably lower than those in the United States, France, Germany, Australia or other major jurisdictions. Nevertheless, there is, as appears to be widely accepted, at least a perception of a compensation culture, and that is having a significant and detrimental effect on the national life of this country. The compensation culture, if it is not a reality, appears to be something that the claims farmers are aimed at creating. We have seen their marketing campaigns. We have seen also their slogans, such as, ““Where there is blame, there is a claim””. These slogans are clearly intended, aggressively, to encourage the pursuit of actions for personal injury. Such advertising can frequently raise unrealistic expectations in the minds of vulnerable people. Since legal aid was abolished in 1999 for personal injury claims, the no-win, no- fee regime that has replaced it has made it more difficult for potential litigants, particularly those who are less sophisticated than others and therefore more vulnerable, to obtain legal redress. It is unfortunate that it is precisely those people—more vulnerable potential claimants—whom the claim farmers seek to attract. Perhaps the expression ““prey upon”” might be more appropriate. I am sad to say that the more vulnerable in our society find the prospect of approaching a solicitor intimidating. They find the prospect of making a free telephone call to a claims farmer a more attractive option. Once the potential litigant is in the clutches of the claims farmer, it is often difficult for them to get out. The abuses of claims farmers have been catalogued this afternoon. As time is short and because other Members wish to speak, I will not rehearse them. There is no doubt that regulation of the industry is a matter of priority and one that is long overdue. I congratulate the Government on bringing legislation forward. The activity of claims farmers has its consequences. Their pursuit of the creation of a compensation culture has created an increasingly risk averse society. We have heard the stories of school teachers and scout leaders who have been dissuaded from taking young people in their charge out on what would be valuable and character-building expeditions. Many years ago, when I was considerably younger, I used to go rock climbing. I did it because I enjoyed the risk. When one is clinging 100 ft up on a rock face, it is difficult to think of anything other than maintaining that position on the rock face. I would not begin to pretend that I was in any sense a Chris Bonington, but I enjoyed the experience. I was taken into the mountains by a guide called Terry, but I wonder whether these days Terry would be so willing to take me to the mountains. He has probably heard about the culture of where there is blame, there is a claim and he might well be dissuaded from doing so. I believe that that is happening. We have heard from my hon. Friend the Member for Canterbury (Mr. Brazier) of the experiences that have been related to him. This is sad. Risk is a fact of life; we take risks every day. Risk is good and it develops character. If we are being dissuaded from taking risks by the activities of claims farmers, we need to deal with the culture that they are generating. I applaud the aims of the Government in bringing forward part 1. I understand what they are trying to do. They are trying to deal with the risk aversion that has been built up. They are trying to provide what I imagine is a statutory defence, based upon what they say is common law as it now exists. Clause 2 is an extremely valuable component of the Bill. I congratulate Lord Hunt for ensuring that the provision was introduced into the Bill. I similarly congratulate the Government on accepting Lord Hunt’s valuable amendment and incorporating it into the Bill. It achieves a number of things. It deals with the simple issue of courtesy. If someone has caused damage or injury to another individual, in a courteous society he should be encouraged to apologise. As we have heard, he is frequently inhibited from doing so, because that may amount to an admission. The problem extends even further, as we have heard. The clause will give insurers the opportunity to pay for a certain amount of treatment for people who are injured. The fact that that treatment is paid for will give considerable solace to the claimants but, in due course, it will reduce the value of claims that are made and ultimately reduce insurance premiums across the board. I am concerned, however, about clause 1. I applaud its aim of seeking to ensure that the courts pay regard to the question of whether certain steps should have been taken by defendants or whether it would be unreasonable to expect them to take them. However, it is poorly drafted and, if we are not careful, it will become a fertile source of litigation in future. The application of the clause by the courts when considering such cases is not mandatory but permissive. The word, ““may””, is used, but ““shall””, is preferable, because it would give the lower courts the guidance that they need, ensuring that they consider the matters dealt with in the clause. However, the drafting is loose—there are references to ““particular steps”” and ““a particular way””, but the glaring omission is the nature of ““a desirable activity””. What does ““desirable”” mean? There is reference to"““undertaking functions in connection with a desirable activity””." What are those functions? The thrust of the clause is sensible and desirable.