Let me begin by paying tribute to the high quality of debate today from hon. and right hon. Members on all sides of the House. This has been a serious business. The consultation on the issue began in 2012 and the detailed measures we are debating today were announced in the Budget in autumn 2015. There are disagreements on every side of the House, which are expressed in new clauses 1 and 2, but, more generally, I hope that everybody in the House will recognise that the Bill has been adapted as we have listened a great deal to suggestions made by the Opposition and others. I pay tribute to the hon. and right hon. Members on all sides who pushed for the changes we have introduced on vulnerable road users, on the new role of the consultation with the Chief Justice and on definitions, particularly in respect of whiplash. I also pay tribute to what happened in the other House, where this legislation was considerably revised and improved by efforts from Cross-Bench peers, as well as Labour, Lib Dem and Conservative peers.
2.45 pm
It is a tribute to all the work done in the other place and here that, now, having had dozens of amendments in Committee, we are down to debating two new clauses. I wish briefly to express why it is that, although we acknowledge and recognise some of the powerful arguments made by the hon. Members for Ashfield (Gloria De Piero), for Hammersmith (Andy Slaughter), for High Peak (Ruth George) and, particularly in relation to new clause 2, for Enfield, Southgate (Bambos Charalambous), the Government are proposing that the new clauses should be dropped and that we should proceed with the Bill as drafted.
There are effectively five problems with new clause 1 that lead us to feel that we should not proceed with it. The first is that it would go against the entire policy intent of the Bill. What would happen if, instead of increasing the maximum limit under the small claims track to £5,000, it were held at £1,500? The tripartite policy move has attempted to tackle three things simultaneously: to reduce the incentives for fraudulent or exaggerated claims posed by the pay-outs; to remove some of the compensation that can be achieved by getting one’s legal fees covered by the defendant; and to remove some of the current requirements on medical consultation. Those three things need to go together. If we were, for example, to increase the tariffs in line with the proposals that are dealt with by some of the amendments the Opposition have tabled for consideration later, but to leave the small claims limit as it was, we would end up in an unequal system. As my hon. Friends the Members for Croydon South (Chris Philp), for Hitchin and Harpenden (Bim Afolami) and for Middlesbrough South and East Cleveland (Mr Clarke)
have said, there are significant costs to consumers, premium payers and the social system of proceeding with a situation in which some people—not all—are encouraged to make exaggerated and, in some cases, fraudulent claims.
The Government’s position is clear: we have enormous respect for the work of personal injury lawyers, who play an honourable and important part in society in representing the interests of victims as a whole, and in no way should this Bill be read as suggesting anything other than our respect for those individuals and the work that they do. However, we argue that the purpose of the small claims court is best dealt with through focusing on the nature of the claim, not on inflation. Many of the arguments that have been made, for example by the hon. Member for Lewisham West and Penge (Ellie Reeves) and others, have focused on the question of inflation. Indeed, the entirety of new clause 1 attempts to set up a system where we look at inflation over the intervening period and determine purely on that basis whether the limit should be raised. However, as the hon. Member for Hammersmith pointed out, our theory is different—it is respected by the practice of the European courts and other jurisdictions: the basic determinant of what goes into the small claims track is not inflation but the complexity of the claim.