Draft Criminal Injuries Compensation (Northern Ireland) Order 2002

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Mr. Davies: The Minister said that the tariff is based on common law. However, the tariff compensation proposals do not correspond to the jurisprudence of the average settlements under common law, but represent a systematic reduction of such settlements. Of course, there are no standard common law settlements because they are common law and therefore reflect the different circumstances of each case. Am I right to understand that the Government propose to make a systematic saving on the cost of meeting compensation claims on a common law basis?

Mr. Browne: I am grateful to the hon. Gentleman for his contribution, but I do not accept his point for one minute. I explained the process used to set the tariffs for each category of injury in great detail during a Northern Ireland Grand Committee. I could repeat

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that now, but it is unnecessary because the explanation is on the record. The process was based on an appropriate, systematic, fair and objective analysis of the agency's experience of dealing with claims.

I have not heard the hon. Gentleman's claim before. I have heard that lawyers may produce documents that they use as ready reckoners for negotiations and point to figures that are based on certain types of claim that would be used for negotiation and say, ''These figures are not the same.'' However, they will never be the same. These tariffs are based on the history of the agency, which has been subject to the common law structure in Northern Ireland for the years since the scheme has existed. The tariff has been worked out in relation to the average settlement for the bands in the tariff. Clearly, some claims would have been below that, so there will be winners and losers. I do not understand the hon. Gentleman's idea that an average is somehow a reduction. [Interruption.] I will give way to him again in a moment. The tariff structure requires comparatively broad bands. If the hon. Gentleman is saying that he has evidence to show that the agency was settling claims on average for more than it now says that they were settled for, nothing could be further from the truth.

Mr. Davies: I have not done original research on the subject, but I am surprised to hear the Minister say that he has never heard someone suggest that the tariff in the proposed scheme will lead to compensation levels below those that would be achieved in common law. That suggestion was made by no less a body than the Assembly Committee that reported on the subject in November. Page 4 of its report says that the Committee

    ''felt that the introduction of a Tariff system was simply a cost-saving exercise that would leave many of the more seriously injured victims under-compensated.''

That claim has undoubtedly been made. Whether or not it is correct, I am not in a position to discover first hand, but I am surprised that the Minister did not know that the allegation had been made.

Mr. Browne: This is a clever debating technique. The allegation that the hon. Gentleman has just made is not the one that he made in his earlier intervention. What he is saying is now clear. [Interruption.] I will deal with this point. I dealt with it in great detail in the Grand Committee, so it is on the record, but I do not think that the hon. Gentleman is a member of that Committee. I had never heard the allegation that he made in his previous intervention. Indeed, I do not think that any other member of the Committee had. Now that the hon. Gentleman has clarified the position and referred to someone else's criticism—

Mr. Davies: It is the same allegation.

Mr. Browne: It is not. When the hon. Gentleman reads the report of the Committee tomorrow, he will see that it is an entirely different allegation.

Lembit Öpik (Montgomeryshire): Will the Minister give way?

Mr. Browne: May I finish my point? It is important.

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Lembit Öpik: My question is on the same point.

Mr. Browne: If it is, the hon. Gentleman may receive an answer without needing to intervene. No doubt he will have another opportunity to make a contribution.

The methodology used to prepare the Northern Ireland tariff has been subject to a great deal of misinformation. It was alleged that the Government fed all the figures for the last 12 months into a computer and got an answer at the other end. That is another allegation from the report to which the hon. Gentleman has drawn my attention, but it is not true. The methodology was logical and not without precedent: it was modelled on the method used to determine the tariff for Great Britain. We are therefore talking about the method used by the Government whom the hon. Gentleman supported to fix the tariff for the rest of Great Britain. He would not concede that that method was designed with the Ad Hoc Committee's objective in mind.

The awards were based on the average value of existing awards under the current arrangements. During the period from December 2000 to June 2001, an analysis was undertaken of current settlements for individual injuries made by the Compensation Agency. The analysis included all claims in excess of £20,000 settled during the financial years 1999–2000 and 2000–01. The findings indicated that the vast majority of claims were settled within the compensation agency's current ''Guidelines to Offers'' for individual injuries.

That internal document provides a list of injuries with a range of awards applicable to each. Consequently, the average values of the awards for specific injuries that underpin the new tariff are based on the mid-point of the Northern Ireland compensation agency's current ''Guidelines to Offers''. The average awards have been inflated by 1.85 per cent. to provide an allowance for pecuniary loss in the first 28 weeks. Under the new scheme, pecuniary loss cannot be compensated for individually for the first 28 weeks, and the figure of 1.85 per cent. was calculated to cover that.

The values are rounded to the nearest £100 for awards of up to £10,000, and to the nearest £1,000 for awards above £10,000. Individual awards of similar value have been allocated according to the nearest tariff, of which there are 29. I accept that we must use averages once we move from common law—in which each case could be subject to a process considered demeaning and undermining for victims—to a system designed to treat them with more respect and less unnecessary procedure. Some awards would have been above the tariff, and some would have been below it. However, the hon. Member for Grantham and Stamford misrepresents the position when he quotes part of the Assembly's report out of context. I will consider that report in more detail later.

I pray in aid the benefit derived from the Conservative Government's methodology, which they adopted for the rest of Great Britain. The hon. Gentleman may be about to tell me that that was done for cost-cutting reasons—but we did not get that

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degree of honesty from the Conservatives when they were in government.

Mr. Davies: We should try to be as clear as possible about the issue and not try to obfuscate it by going into the history or technicalities of methodology. I asked the Minister an immensely simple question: does he accept or reject the allegation that

    ''the introduction of a Tariff system was simply a cost-saving exercise''?

If I understand his response, he rejects it. If he is correct that there is no systematic reduction and the average settlement is no less, the allegation made in the Assembly Ad Hoc Committee's report cannot be sustained. Many people in Northern Ireland, not just members of the Committee who produced that report, will be intensely interested in the Government's clear response to my question.

Mr. Browne: With all due respect to the hon. Gentleman, I am glad that he has now caught up with the rest of us. Almost all my introduction to the substance of the order rejected that allegation. I also debated the allegation at great length in the Northern Ireland Grand Committee with some hon. Members who are here today. We discussed in significant detail the methodology and the motivation behind it. I have spoken to those in Northern Ireland who have an interest in criminal injuries compensation, and I am certain that they already know my view, because they took the trouble to read the record of the Grand Committee debate. The purpose of that debate was to put into the public domain the views of the Government and others on this process. We were not faced with a comparatively short period of time to discuss complicated matters, as we so often are in Committee.

Lembit Öpik rose—

Mr. Browne: Obviously I have not dealt with the issues that were raised by the hon. Member for Montgomeryshire. He may intervene if he wishes.

Lembit Öpik: The Minister may have dealt with the issues that I raised. As he rightly said, he covered many of them in the debate in the Northern Ireland Grand Committee. However, it might be helpful if he responded to the point made by members of the Ad Hoc Committee that the tariff scheme will provide substantially less compensation than green book compensation payments. I do not expect the Minister to repeat everything, but a comparison with green book payments would be useful, given the importance that has been attributed to the issue.

Mr. Browne: For those who do not know, I ought to explain that the green book is a document used by lawyers for negotiation. For as long as we have had criminal injuries compensation, it was never intended to be the basis of any compensation scheme for which the Government foot the bill. It has never been our intention to seek to put the Government, in making ex gratia payments, in exactly the same position as that of a defendant in a negligence claim.

There has been cross-fertilisation between the two schemes, and lawyers have found it easy to use reports of cases in civil claims as guidelines in debates and

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negotiations with the compensation agency—and perhaps vice versa, although I am not sure about that. However, although there is a relationship between the schemes, it is not the one that has been suggested in this debate. I am not saying that the figures in the tariff will correlate with those in the green book—and no Government Minister could ever say that about an ex gratia compensation scheme in Great Britain, or anywhere else. The figures in the tariff are designed to achieve the objective that I set out at length in the introduction, and to do that in a fashion that gives us a manageable administrative regime that is, in overall terms, in the best interests of the victims.

The proposed tariff of injuries—to which members of the Committee have had access, and which will be debated if the order is made—has been drawn up on the basis of the current average values of awards paid to victims of criminal injuries in Northern Ireland under the present arrangements. Those awards are substantially higher than they would be for equivalent injuries in Great Britain, so the tariff amounts too, are higher than in Great Britain. We cannot be fairer than that—and as I have said, the reforms are not intended to cut costs.

The draft order also provides for the scheme to compensate for loss of earnings, special expenses and bereavement. That provision is the same as the provision for Great Britain, and adds considerably to the parameters of a strict interpretation of a tariff-based arrangement. It means that much of what is compensated for in a civil damages case is also covered in serious criminal injury cases. Therefore, there is the flexibility that Sir Kenneth Bloomfield's report sought to introduce into the scheme; that is where the complexity arises in these serious cases, and that position is preserved.

The draft scheme will go on to explain in greater detail how this will work, but at this stage, suffice it to say that in all cases of serious injury where the victim suffers lengthy incapacity, the tariff award will be augmented by compensation for pecuniary loss and special expenses. Although the order provides the power to cap awards, there is no intention to make use of that provision to limit overall payments.

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Prepared 11 March 2002