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South (Mr. Bermingham) agree that benefits or payments that are decided and compensation that is set by judges are different from funds connected to major disasters to which my hon. Friend has just referred? There are two standards in our nation at the moment : one for people who are affected by major disasters and will, with the help of their solicitors, quite rightly gain compensation ; and one for people who, in industry, lose an arm, leg or hand and are up against a scale of payments which will be charged against the benefits that he or she receives.

Mr. Bermingham : My right hon. Friend makes a fair point. In a major disaster the heart of the nation goes out to the victims and the nation seeks to give generously. I seek a cold-blooded assurance from the Minister tonight that the generosity of the nation will not be used to compensate the cost to the Government in benefit. That would be morally indefensible. I ask the Minister quite bluntly for that assurance tonight on behalf of those people, in Merseyside and elsewhere, who have lost loved ones or have suffered grievous harm. If the Minister wants to intervene and give that assurance I shall be delighted to give way. Many in the nation seek, and have sought, that assurance but, unfortunately, it has not always been forthcoming. In such circumstances, rule books should occasionally be torn up.

Mr. Scott : I was going to deal with the matter in my concluding remarks, but as the hon. Gentleman has raised it, it might be acceptable and sensible to get it out of the way. The clause deals with compensation payments made by, or on behalf of, a person who is liable for an injury. It has nothing to do with charitable payments. Anyone who has seen the response of this country to the Hillsborough tragedy and others that, alas, we have seen recently will know that those are totally different circumstances. The funds relating to such tragedies have nothing to do with the clause.

Mr. Bermingham : I am grateful to the Minister for intervening in that way. Perhaps I should put the question more bluntly. Of course, compensation payments ultimately fall due to the families of those involved in the tragedy who are either injured or dead. If the Minister is assuring me that the Department will have no claim against payments paid out of the Hillsborough disaster fund, I will accept it. The Minister nods, but let us have it straight for the record so that we know exactly where we stand. Will the Minister intervene again and confirm that there will be no claims for the recovery of benefit against money paid from the Hillsborough trust- -whether or not it is a charitable trust? I recognise that there is a difference in law between a charitable and non-charitable trust.

Mr. Scott : The answer is an unequivocal yes.

Mr. Bermingham : I am grateful to the Minister for that assurance. I am sure that it will bring some crumb of comfort to those of my constituents who have been grievously injured.

I shall end on a practical note. Have the Minister and his officials cared to think for a moment about the effect of the unamended clause on settlement and damages claims in the courts of our land? It would not be sensible in future for lawyers--either solicitors or counsel--to settle at the current rates of settlement. The clause effectively encourages lawyers to argue further over the degree of contributory negligence, because that will become a

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material argument in the future. In the past on many occasions settlements have been amicable. It also means that, in future, those who act on behalf of the plaintiff--this may affect my right hon. Friend the Member for Salford, East (Mr. Orme)--particularly in industrial injury claims in non-disaster cases, will no longer allow their clients to settle for the existing sums of money. Those who appear on behalf of the plantiff seek to compensate the injured and return them to the state they were in before the injury. If, in the future, the Department of Social Security is to recover even greater sums, the general level of damages will have to rise.

The Minister and those who advise him have failed to understand that the premiums paid to insurers will equally have to rise to meet the anticipated increased claims. They have failed to realise that premiums have to be paid by the employers and that is an additional cost which forces up the price of the product being made and makes it less competitive.

I know the Minister well. He is an honourable man and I am sure that the clause is not the product of his mind because he is too decent. Those who drafted the clause have not thought it through because it does not go far enough. Even if amended, the clause will effectively increase the cost of products in industry and make us less competitive. We, the general public and the citizens of the United Kingdom will be the losers. This is another example of dogma leading us towards penury.

Sir Michael McNair-Wilson (Newbury) : I shall delay the House for one moment to clarify one aspect of the clause.

First, I want to thank my hon. Friend the Minister for his statement on the Hillsborough tragedy. The item came up on "The News at One" today, and there was a suggestion that the social security department in Sheffield was unsure as to the exact position. When we were debating the Bill in Committee, my hon. Friend the Minister of State made the point that the object of the clause was to ensure that nobody received double compensation, particularly since social security benefit is paid from public money. I do not quarrel with that. When awarding damages-- particularly in cases of medical negligence, although this could equally apply to injury compensation--the payment is made some time, even years, after the event. Will the judge who awards the damages be aware of the social security benefits that have been paid to the person who is to receive the damages, or will he or she presume that what is being awarded is from the date of settlement? Is this really double compensation, or does the compensation for damages given by the judge run from the end of the case, so that the period during which the case was being heard is not necessarily covered by the damages?

I suggest to my hon. Friend that if, as he appears to be arguing, the compensation runs from the date of the injury, it would seem reasonable that the judge should be presented with a figure for the amount of social security benefit already paid to the victim, so that he can allow for it when deciding the final figure that he is prepared to offer in compensation for damages.

9.30 pm

Mr. Scott : I listened with interest and respect to the hon. Member for St. Helens, South (Mr. Bermingham), because he knows something about this area and is a

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practitioner of the law. He accused the Government of not having thought this through and of having got it wrong. I do not believe that that is right ; nor did the National Audit Office, which looked into this, nor did the Public Accounts Committee, which also looked into it ; nor have the courts, which have considered this matter, come to a different conclusion from the Government's. They have all come to a view that reflects that of Sir William Beveridge, who stated in his report :

"An injured person should not have the same need met twice over. He should get benefit at once without prejudice to any alternative remedy, but if the alternative remedy proves in fact to be available, he should not in the end get more from two sources together than he would have got from one alone".

That is the principle on which we worked when producing the scheme and when seeking one that was relatively simple to operate. To answer my hon. Friend the Member for Newbury (Sir M. McNair-Wilson), we shall of course give the courts details of benefits paid up to the date of settlement or award. I shall return to that point later. One reason why much of our discussion in Committee was unsoundly based and why these amendments would have a perverse outcome is that 99 per cent. of settlements take place outside the courts and only 1 per cent. of cases are considered in court. I believe that someone was unkind enough to use the words "horse trading" to describe the negotiations to settle compensation claims. Those engaged in such negotiations would know perfectly well the amount of benefit that would have been available.

The two amendments deal with matters that we discussed in Committee. As far as legal costs are concerned, in schedule 3 we have specifically provided that if, by any chance, someone on legal aid found that his legal aid costs were more than the compensation payment so that the victim was left with a bill, the Department of Social Security would meet any outstanding amounts. It would be intolerable if a very poor person, having resorted to legal aid, was left with a bill to pay. That would be unlikely, but if it happens we have made it perfectly clear in the schedule that the problem would be dealt with in the way I have described.

Mr. Bermingham : Does not the Minister accept that many industrial claims are brought in the name of the trade union, which employs solicitors and covers the costs, because they are its costs? That is one of the benefits of trade union membership. So there is a distinction between a litigant in that position and a litigant in receipt of legal aid.

I think the Minister has missed the point that I was trying to make. Is he saying that the benefit accruing to the union when recovering its costs on behalf of its member is in some way to be laid at the door of the claimant who succeeds in obtaining damages? That would be appalling.

Mr. Scott : I am not familiar with the arrangements between unions and their members for these matters. Unions have funds and their members pay dues in part to cover the costs of this sort of action. If people have a legal aid bill or have employed private lawyers, because so few cases are determined by the courts and there are no heads of agreement on what a settlement is, it is difficult to break down--

Mr. Bermingham : Does not the Minister accept that, even in a friendly case which is settled out of court--a case that does not involve a minor, which would require court

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approval for a settlement--the successful plaintiff's costs are always paid by the defendant? Therefore, considerable amounts of money that do not belong to the plaintiff become liable to the charge that the Minister seeks to impose in this clause.

Mr. Scott : We have taken the view, which I believe is right, that the benefit paid should be recovered from the settlement. That is what a number of independent people who have looked at the issue said was the right way to go about it, and we are following their advice. I do not want to teach my grandmother to suck eggs, but it was apparent from what the hon. Gentleman said about extra costs and so on that he has not read the Touche Ross report about how the costs are broken down. I do not accept every figure in the Touche Ross report, but the matter was carefully considered. The Government did not take a leap in the dark. Only after looking carefully at the costs and at the advice that we received from a variety of sources did we decide that this was a fair and sensible approach. At the moment we have a muddle. The 1948 legislation provided for some offsets against a list of benefits, but the courts have decided that, on a number of other benefits that have been introduced since then, 100 per cent. should be recovered from any compensation payment. That applies not just up to the date of the settlement or award, as we are providing here, but to future entitlement to benefit which can be offset against the settlement that has been made. On balance, some 80 per cent. of victims receiving compensation could find themselves at least as well off as before or even better off, because there is no offsetting of future benefits against this. At the moment benefits are offset for five years, and sometimes ahead of that. On average, 80 per cent. of cases are settled within two and a half years--a pattern that I would expect to continue. In those circumstances, many people will find themselves better off than they would be under the existing system.

The vast majority of these cases are dealt with out of court, with only 1 per cent. being decided by a judge. I think that the hon. Member for Derby, South (Mrs. Beckett) recognised that in some circumstances there may be difficulties in matching heads of damages awards and the payment of benefit. That is a fair understatement of the real problems that face the Department when it has to make great inquiries into the various heads of damages that have been awarded. But the hon. Member for St. Helens, South must know that negotiations continue and the victim is offered a global sum to settle. No calcuation of how that figure has been arrived at is stated. That would be impossible because of the informality.

I do not want to delay the House unduly, but both amendments would be perverse in their effects. They would undermine the simplicity and the underlying fairness of the system that we are introducing, endorsed by Beveridge, the Public Accounts Committee, the National Audit Office and the courts. In those circumstances, I shall in due course be advising the House to reject the amendments.

Mr. Stanley Orme (Salford, East) : The Minister should not use Beveridge and others to justify this move by the Government to reclaim benefits from people who receive

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only a small amount of benefit in any case. The hon. Gentleman says that he is not sure what the trade unions do. My trade union, the Amalgamated Engineering Union, has spent a great deal of money representing people injured in industry and elsewhere in reclaiming benefits. It has to go to court to do so. Amounts are determined by the judge on the basis on whether the person has lost an arm, a leg, a hand or whatever. We then see other people getting £1 million even though they have not lost any faculty. I assure the Minister that people regard this move by the Government as a gross injustice.

Mr. Scott : I do not agree. Of course anybody who takes any notice of these things will know that there may be a capricious element in the compensation that people get for injury or disease, depending on the circumstances. I cannot put all that to rights in this legislation. I can only follow up what Beveridge recommended. That could not be agreed at the end of the war, but others of great authority have endorsed the principle that people are certainly entitled to benefit in the short term, when they need money immediately to pay their own and their families living expenses. But when, finally, a person is judged to have been guilty, or has accepted liability, the taxpayer, having provided interim support, should not be left with the compensation bill. I believe that that is an unassailable principle. It has been strongly endorsed, and I invite the House to reject the two amendments.

Mr. Flynn : The Minister persists in quoting Beveridge, so I must quote back at him Beveridge's conclusion that it was not possible to do more than raise these questions. Beveridge reached no conclusions whatever ; he simply stated the problems. We all agree that one of his recommendations was that there should not be any question of double compensation at anyone's expense--and certainly not at the expense of the social security system. But the Minister has again failed to make the case in answer to our point that, in respct of contributory negligence, there is no question of over-compensation unless the amount is beyond what is decided as the gross amount. If damages are set at £10,000, and the figure is reduced by any amount because of contributory negligence, that is no excuse for trying to bridge the gap by taking away money due in social security benefit. There is another point that is very revealing. When an event such as the Hillsborough disaster occurs, we all feel bereaved. While we share the grief of the families involved in that, it would be foolish to ignore the tens of thousands of individuals injured just as grievously elsewhere. People just as unfortunate, just as poor and just as badly hurt will lose social security payments in a way that has never been known before.

I am very grateful for the support of my hon. Friend the Member for St. Helens, South (Mr. Bermingham), who rightly pointed out the problems that will occur as a result of this legislation. Of course the amendments that we are proposing are not enough. A whole battery of changes were proposed in Committee. Had they been accepted, they would have improved the Bill greatly and softened its damaging effect. The Minister and the Department are trying to mix two elements, two heads of damages, which cannot be mixed. They are trying to achieve a fusion. While fusion may well have been achieved at room

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temperature in another area, the fusion that is being attempted here will produce a cocktail so volatile that it will explode in their faces.

We intend to press the amendment to a Division.

Question put, That the amendment be made :--

The House divided : Ayes 158, Noes 277.

Division No. 180] [9.43


Archer, Rt Hon Peter

Armstrong, Hilary

Ashley, Rt Hon Jack

Ashton, Joe

Banks, Tony (Newham NW)

Barnes, Harry (Derbyshire NE)

Barnes, Mrs Rosie (Greenwich)

Barron, Kevin

Battle, John

Beckett, Margaret

Bermingham, Gerald

Bidwell, Sydney

Boyes, Roland

Bradley, Keith

Bray, Dr Jeremy

Brown, Nicholas (Newcastle E)

Bruce, Malcolm (Gordon)

Buchan, Norman

Buckley, George J.

Caborn, Richard

Callaghan, Jim

Campbell, Menzies (Fife NE)

Campbell, Ron (Blyth Valley)

Campbell-Savours, D. N.

Carlile, Alex (Mont'g)

Clark, Dr David (S Shields)

Clarke, Tom (Monklands W)

Clay, Bob

Cohen, Harry

Corbett, Robin

Cousins, Jim

Crowther, Stan

Cryer, Bob

Cummings, John

Cunliffe, Lawrence

Dalyell, Tam

Darling, Alistair

Davies, Rt Hon Denzil (Llanelli)

Davis, Terry (B'ham Hodge H'l)

Dixon, Don

Dobson, Frank

Duffy, A. E. P.

Dunnachie, Jimmy

Dunwoody, Hon Mrs Gwyneth

Eadie, Alexander

Eastham, Ken

Evans, John (St Helens N)

Fatchett, Derek

Faulds, Andrew

Fearn, Ronald

Field, Frank (Birkenhead)

Flannery, Martin

Flynn, Paul

Foster, Derek

Foulkes, George

Fraser, John

Fyfe, Maria

Galbraith, Sam

Garrett, John (Norwich South)

Garrett, Ted (Wallsend)

George, Bruce

Godman, Dr Norman A.

Gordon, Mildred

Gould, Bryan

Graham, Thomas

Griffiths, Nigel (Edinburgh S)

Griffiths, Win (Bridgend)

Grocott, Bruce

Hardy, Peter

Henderson, Doug

Hinchliffe, David

Hogg, N. (C'nauld & Kilsyth)

Home Robertson, John

Hood, Jimmy

Howells, Geraint

Howells, Dr. Kim (Pontypridd)

Hoyle, Doug

Hughes, John (Coventry NE)

Hughes, Robert (Aberdeen N)

Hughes, Roy (Newport E)

Hughes, Sean (Knowsley S)

Illsley, Eric

Ingram, Adam

Janner, Greville

Jones, Ieuan (Ynys Mo n)

Kaufman, Rt Hon Gerald

Kilfedder, James

Kirkwood, Archy

Lamond, James

Leadbitter, Ted

Lewis, Terry

Livsey, Richard

Lofthouse, Geoffrey

Loyden, Eddie

McAllion, John

McAvoy, Thomas

Macdonald, Calum A.

McKay, Allen (Barnsley West)

McKelvey, William

Madden, Max

Marek, Dr John

Marshall, David (Shettleston)

Martin, Michael J. (Springburn)

Martlew, Eric

Maxton, John

Meacher, Michael

Meale, Alan

Michael, Alun

Michie, Bill (Sheffield Heeley)

Michie, Mrs Ray (Arg'l & Bute)

Mitchell, Austin (G't Grimsby)

Moonie, Dr Lewis

Morris, Rt Hon A. (W'shawe)

Morris, Rt Hon J. (Aberavon)

Mowlam, Marjorie

Mullin, Chris

Murphy, Paul

Nellist, Dave

O'Brien, William

O'Neill, Martin

Orme, Rt Hon Stanley

Parry, Robert

Patchett, Terry

Pendry, Tom

Pike, Peter L.

Powell, Ray (Ogmore)

Prescott, John

Quin, Ms Joyce

Rees, Rt Hon Merlyn

Richardson, Jo

Robertson, George

Rogers, Allan

Sedgemore, Brian

Sheldon, Rt Hon Robert

Short, Clare

Skinner, Dennis

Smith, C. (Isl'ton & F'bury)

Soley, Clive

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