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12.33 pm

The Parliamentary Under-Secretary of State for Constitutional Affairs (Bridget Prentice): I beg to move, That the Bill be now read a Second time.

I am pleased that, after much debate and discussion in the other place, the Bill has finally come to the House. It is part of a much wider set of initiatives that we are promoting: we are determined to tackle practices that might stop normal activities, because people either fear litigation or have become risk-averse. We want to stop people being encouraged to bring frivolous or speculative claims for compensation, and the provisions in the Bill will help us to do just that. They will reassure people who are concerned about being sued that, if they adopt reasonable standards and procedures, they will not be found liable.

The Bill will also put in place the legislative framework needed to regulate claims farmers—people who encourage consumers to make claims—too many of whom are cowboys who have abused the system for too long, and we are going to put a stop to it.

Part 1 contains provisions on the law of negligence and statutory duty and on apologies, offers of treatment and other redress. Clause 1 relates to the law of negligence and statutory duty, and some hon. Members have had concerns about the need for that clause. We believe, however, that it is important and that it will have benefits.

The Better Regulation Task Force in its report “Better Routes to Redress” made clear its view that, although a compensation culture does not exist in this country, the perception that it does can have a real and damaging effect on people’s behaviour. That can be particularly significant in respect of activities provided by voluntary organisations and others.

Last autumn, Volunteering England found that nearly one in five organisations said that people had stopped volunteering for them because of fears about risk and liability and that nearly a quarter of organisations said that volunteers had been deterred from joining them in the first place by concern about those issues. Those fears might well be out of proportion and based on inaccurate perceptions, but they are very real. So there is a need to provide reassurance to those who are concerned about possible litigation—not only in the voluntary sector, but elsewhere too—and about how the law in this country works. That is what clause 1 will do.

The way in which clause 1 will work is that, in deciding a negligence claim or a claim for breach of a statutory duty that involves a standard of care, the court must consider whether the defendant owed a duty of care to the claimant and, if he did owe such a
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duty of care, whether that duty was breached, and whether the claimant suffered loss or injury as a result. In considering the second of those factors—whether the duty of care was breached—the court must consider the standard of care, and whether the defendant fell short of that standard.

In this country, the ordinary standard of care used in considering whether negligence is involved is that of reasonable care, and whether the defendant has met that test is a question of fact for the court to decide, having regard to all the circumstances of the case. Clause 1 is therefore concerned only with the approach of the court to assessing that question of fact. It does not concern or change what the standard of care should be, nor whether the defendant owed a duty of care to the claimant.

Mr. David Jones (Clwyd, West) (Con): I hear what the hon. Lady has to say, but does not clause 1 go further than that by requiring the claimant to put together a risk assessment—in other words, to specify what steps should have been taken by the defendant in complying with the duty of care? Does that not go beyond what is required of the defendant at the moment?

Bridget Prentice: No. The hon. Gentleman is putting more into clause 1 than is actually there. Clause 1 provides that, in considering a negligence claim and deciding whether the defendant should have taken certain steps to meet a standard of care either by precaution or otherwise, the court may have regard to whether a requirement to take those steps might prevent an activity that is desirable from taking place or whether it might discourage people from undertaking functions in connection with that activity. That reflects the existing law and the approach that the courts have already taken and the view that they have already expressed, particularly in judgments in the higher courts.

Mr. Andrew Dismore (Hendon) (Lab): Perhaps my hon. Friend might offer a definition of desirable activity as it is a new concept in common law, which, as far as I can see, has not been defined by any previous authority. Her comment that the provision simply restates the existing law, the Tomlinson v. Congleton borough council ruling, which is the most recent authority on the issue, makes it quite clear that the sort of exclusion to which she refers does not apply across the board, particularly with an asymmetric relationship—for example, the employee-employer relationship. Will she therefore undertake to table an amendment to correct clause 1, to put right the fact that it does not accurately reflect the law as it stands?

Bridget Prentice: The view that was expressed in the Tomlinson v. Congleton ruling, which is the most recent case, as my hon. Friend rightly says, is reflected in clause 1. The clause will have a range of benefits. It will reassure those who are concerned about possible litigation by making clear how the law works and it will help counter the view that people should cease activities for fear of litigation. I know that hon. Members will say that that will bring more cases to court. Any form of legislation brings the opportunity for people to bring a case to court so that the common law is established clearly. We should not be overly concerned in that
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respect. Clause 1 and clause 2, which has been added, make it clear that the law is clear, that people know where they stand and that the courts will use common-sense judgments in ensuring that people understand what desirable activities are and where the balance lies between the desirable activity and any precaution that individuals need to take.

David Howarth (Cambridge) (LD): I fully accept that the Government’s intention is not to alter the law but to maintain it as announced by the House of Lords in the Tomlinson case. That gives rise to the difficulty that the hon. Member for Hendon (Mr. Dismore) mentioned. Another problem with the way in which the clause is drafted is the phrase “breach of statutory duty.” There are statutes that set up standards of care, breaches of which are less than full negligence. An example is the Consumer Protection Act 1987. Is it the Government’s intention to change the way in which that Act works by adding this new clause?

Bridget Prentice: There is a straightforward answer to that question. No. It is not our intention to do that.

Paddy Tipping (Sherwood) (Lab): I am grateful to my hon. Friend the Minister for being willing to debate the phrase “desirable activity” at this stage. It may well be an issue to be discussed in Committee. “Desirable activity” implies a notion of public good. I am concerned about public services, say accident and emergency units or ambulance services, in which people may work with difficult clients. Does the phrase imply that their conditions of employment and their access to the civil courts will be less at risk than for people not engaged in activities involving the public good?

Mr. Deputy Speaker (Sir Michael Lord): Order. Before the Minister answers, may I take up the point made by the hon. Member for Sherwood (Paddy Tipping)? I do not wish to hinder the debate today, but I am sure that the Minister and other hon. Members will bear in mind the fact that the Bill involves some complicated matters that are probably best dealt with in Committee. That aside, it is quite in order for the Minister to make her usual observations.

Bridget Prentice: Thank you, Mr. Deputy Speaker. You have rightly led us towards the way in which we should conduct the debate today. I am conscious that many hon. Members want to participate, so I will try to be as brief as I can in responding to my hon. Friend.

My hon. Friend makes an important point about emergency services. We have sought to capture with the term “desirable activity” the well-established concept of taking into account the wider social value of activities. The emergency services are a good example of that. If my hon. Friend will allow me, I will leave the matter there and perhaps we can pursue it in Committee.

Clause 1 will have a range of benefits. It will help counter the view that organisations should stop activities for fear of litigation. It will form a valuable part of the work that we are undertaking to tackle perceptions that lead to risk-averse behaviour. It will improve the system for those with valid claims. It will also ensure that the law is widely known and applied.

I mentioned in response to the intervention by the hon. Member for Hendon (Mr. Dismore) that clause 2
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had been added to the Bill. It provides for an apology and an offer of treatment or other redress which shall not of itself amount to an admission of negligence or breach of statutory duty. That clause stemmed from an Opposition amendment, which the Government have been happy to accept. It reflects the approach that has been taken in clause 1 in that it does not change the law but provides reassurance on how it works and encourages the giving of apologies and other offers of treatment and redress. I hope that that is something that the whole House will welcome.

The clause also reflects the approach taken in the NHS Redress Bill, which was debated earlier this week, and should help to reduce the number of cases in which adversarial disputes about liability prevent early rehabilitation in cases involving personal injury. I am sure that hon. Members across the House have had constituents come to them in circumstances in which the length of time and the adversarial nature of proceedings have made matters much worse than they would have been had they been dealt with in a more simple and straightforward fashion.

Simon Hughes (North Southwark and Bermondsey) (LD): In clauses 1 and 2 do the Government seek to codify—to put into written statute—the present law? Do the Government seek to take the law as the courts have defined it and put it into an Act of Parliament? If that is the case, there may be merit in that. The Government have a long-term plan, which many of us support to codify the law so that people have a clear view about what it stands for.

Bridget Prentice: It is not my wish to enter into a debate on the merits of common law and case law versus codification, although the hon. Gentleman is right to say that we have a long-term ambition, as most Governments do, to codify the law properly. What I am trying to say is that clauses 1 and 2 seek to clarify the situation so that people feel comfortable with the activities in which they participate. It does not reduce the protection available to claimants. It will be open to the courts, as now, to decide, for example, whether the terms in which an apology is given amount to an admission of liability in the circumstances of an individual case.

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

Bridget Prentice: I will give way once more on this part of the Bill.

Lembit Öpik: In the context of what the Minister is saying, it is my understanding as a supporter of clauses 1 and 2, as far as they go, that they offer a form of protection to volunteers and volunteer organisations who are losing volunteers because of the perception that she discussed earlier. Is it the Government’s intention to make it clear to those voluntary organisations that those clauses will give them some legal protection against vexatious and spurious claims, which are having a practical and measurable effect on volunteering in the United Kingdom?

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Bridget Prentice: I have sympathy with the hon. Gentleman’s position. I have spoken to voluntary organisations in my constituency, as he and others have done in their constituencies. I do not want to commit the Government to something particular on this, but I hope that I can develop some ideas by the time the Bill becomes law, we hope in or around October, so that perhaps we can send out a clear message to voluntary organisations, schools and, indeed, to the public in general, about what the position is as part of our general encouragement to volunteer and not to be afraid to come forward.

Mr. Julian Brazier (Canterbury) (Con): Will the Minister give way?

Bridget Prentice: One more time, and then I must move on.

Mr. Brazier: I am grateful to the Minister both for giving way and for the helpful meeting a couple of weeks ago. May I suggest that that message also needs to go out to the lower courts. Post-Tomlinson, we are still getting bad cases and if I manage to catch your eye, Mr. Deputy Speaker, I intend to give the details of a particularly bad example of a case that took place while the measure was in another place.

Bridget Prentice: I understand what the hon. Gentleman says. The fact that the Bill is going through Parliament will send a clear message to the lower courts. It will reiterate what has been said in the higher courts about this issue.

Mr. Dismore: Will my hon. Friend give way?

Bridget Prentice: I will take one more intervention.

Mr. Dismore: Does not what my hon. Friend said in response to the previous intervention defeat her own argument? If the purpose of clause 1 is simply to clarify existing law, which of course the Lord Chief Justice told the Constitutional Affairs Committee could not be done in a single sentence, why does she need a great long pamphlet explaining what the law is? Is it not better simply to set out in detail in that pamphlet what the law is for organisations without tinkering by means of clause 1, which will create a whole batch of new defences and litigation?

Bridget Prentice: I disagree with the premise of my hon. Friend’s question. From time to time, it is a good thing for Governments to let the public know what the law is and how it applies to them. Indeed, it is a duty of Governments to do so. If there is a way of ensuring that people, whether in organisations or as individuals, are aware of the situation, it might give them time to consider whether they would like to be volunteers in various organisations.

Mr. Dismore rose—

Bridget Prentice: I really must move on.

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Part 2 of the Bill sets out a scheme to regulate claims management services. Some very reputable claims management companies provide a good service, but consumers are too often exploited by firms that provide a bad service and encourage false claims—[Hon. Members: “Name them”.] I cannot name them, but apparently about 500 companies operate in England and Wales. They are not subject to regulation and many of them abuse the system.

Mr. Oliver Heald (North-East Hertfordshire) (Con): As the hon. Lady knows, trade unions are one of the largest groups of claims farmers. They make their money from referrals to solicitors—often at about £500 per referral—and take money from damages in some cases. Many unions do an excellent job, but does she agree that for trade unions to be completely unregulated in this field, while she is saying that the commercial sector should be completely regulated, is nonsense?

Bridget Prentice: The hon. Gentleman anticipates a later part of my speech. If he will allow me, I shall deal with trade unions later.

Judy Mallaber (Amber Valley) (Lab): Does my hon. Friend agree that providing services to the membership of an organisation such as a trade union is completely different from the situation in my area, where there are completely unsolicited mail drops from firms trying to farm as many claims as possible, especially for miners’ compensation? That is wholly different from an organisation providing services for its members.

Bridget Prentice: I could not agree more. I am sorry that I did not bring with me an unsolicited letter that I received from a company offering me its services in making a claim, on the basis that I had at some point said that I had had an accident. I find such practices wholly abhorrent and I hope that the Bill will be part of our general scheme to ensure that they do not occur.

Mr. John Redwood (Wokingham) (Con): Will the hon. Lady give way?

Bridget Prentice: I will, but I should like to develop the case for regulating claims management.

Mr. Redwood: I am grateful to the Minister for giving way. Does she yet have in mind a body that would act as regulator or is there to be a new regulator, and can she give us any indication of the cost?

Bridget Prentice: I point out gently to the right hon. Gentleman and to other colleagues that if they allow me to develop my speech I will come to that point.

The practices we want to stamp out fall into three main areas. The first is the encouragement of frivolous claims, by raising false hopes about the compensation available, through high-pressure marketing techniques, such as my hon. Friend the Member for Amber Valley (Judy Mallaber) described. Secondly, consumers are misled about the options for funding their claim; in some cases, companies do not let them know that there is a free alternative and, in others, they sell inappropriate additional services, such as loans to fund insurance premiums. Thirdly, we want to protect consumers against poor-quality advice where claims managers act directly for them.

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