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This is a good measure—I have confined my remarks to the first two clauses—and it is one that most hon. Members support. I strongly urge the Government to consider strengthening the first clause so that it provides
even clearer protection for those who provide opportunities, frequently on an unpaid basis, for young people to test the boundaries and grow as individuals in a structured way that is not necessarily safe, but is sensibly balanced in terms of risk. That is what they need if they are to grow up without feeling the need to take the sort of risks that none of us wants to see them take.
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Mr. Michael Clapham (Barnsley, West and Penistone) (Lab): I shall confine my remarks to part 2 of the Bill. I take on board what my hon. Friend the Member for Hendon (Mr. Dismore) said about clause 1 and I note the controversy. I shall examine the results of the consideration in Committee of that clause, but overall it is a good Bill.
My hon. Friend the Member for Sherwood (Paddy Tipping) made the point about the exemption. One has to make a clear distinction between trade unions and claims farmers, and look at the legal services that trade unions have provided over time. They have pushed the boundaries of the law and in so doing have made society a fairer place. Trade unions and their legal services have made civil society a better society.
Part 2 will bring structure and regulation where there was none previously and it is essential that we are able to provide regulation of claims farmers. My hon. Friend the Minister suggested that there were some 500 claims farmers, and I suggest that half of them have come into being since the chronic obstructive pulmonary disease scheme started under the coal health scheme. At present, there are 582,000 registered claims for COPD, 170,000 registered vibration white finger claims and 15,000 posthumous vibration white finger claims. That is 767,000 claims, and many of the claims farmers saw the opportunity to exploit the community.
Mr. Heald: I agree with the hon. Gentleman about claims farmers, but I know that he is a member of the National Union of Mineworkers. It has been reported that a firm of solicitors acting for the NUM
“advised miners to sign an agreement letting the NUM ‘fund’ their legal claims—for chronic chest diseases and a crippling hand condition...in return for paying part of their eventual compensation to the union.
The miners were not told that in reality the Government, not the NUM, was paying the legal costs”.
How can the hon. Gentleman justify not regulating a union that behaves like that? It is disgraceful.
Mr. Clapham: I cannot justify the fact that the solicitors to which the hon. Gentleman has referred did not provide the expected standard of professional advice. They should have advised claimants that they did not need to make the payment that was requested when they signed the form.
Mr. Heald: The union was responsible.
Mr. Clapham: It was the solicitors who were at fault, not the union. Trade unions and their legal services have worked to provide a better society. I do not know which area of the NUM was involved in the case to which the hon. Gentleman refers, but I presume that it was in Yorkshire or the north-east. I maintain that the solicitors involved did not advise clients properly, and so failed to provide the proper service.
Mr. Heald: The firm of solicitors involved in the case was Raleys, and the NUM apparently took £10 million out of the compensation awarded to miners. How can that possibly mean that unions should not be regulated?
Mr. Clapham: As I said, there is a clear distinction between trade unions and claims farmers. The solicitor in the case that we are discussing failed to give the expected standard of professional service. Payments were made to the trade union, which had asked its solicitors to ensure that a form of authority was signed by claimants. I do not excuse that, but the solicitors should have explained that claimants could go to another firm of solicitors that did not seek payment. The fact that that was not explained makes the solicitors culpable.
There is a very big difference between claims farmers and trade unions, as I shall explain by reference to a couple of cases in my constituency. Lots of elderly people live there, and many are the widows of miners. One lady, Mrs. Leadbeater, was approached by a claims farming organisation using a name that gave the impression that it was linked to the trade union movement or to the Coal Industry Social Welfare Organisation. That is a common practice, and one of which I hope my hon. Friend the Minister is aware.
In this instance, the claims farmer called itself the Miners Welfare Compensation Agency Ltd. It approached Mrs. Leadbeater about her claim, and she thought that she was dealing with a legitimate organisation related in some way to CISWO. The agency took the claim and passed it to a firm of solicitors in Manchester called Lopian Wagner. When the claim was settled, Mrs. Leadbeater found that £9,000 had been deducted from her damages and paid on to the claims farmer.
When a claims farmer works with a solicitor, a very complex situation is created. I and my hon. Friend the Member for Barnsley, Central (Mr. Illsley) got involved in the case and, with the help of one of the BBC’s local political programmes, we forced the solicitors involved to pay back the money. We advised Mrs. Leadbeater to take her case to another solicitor, which she did. She took action against the original solicitors through the Law Society, and the matter eventually went before a Law Society disciplinary committee. As a result, that firm of solicitors was fined and had to pay £1,800 for the trauma that it had caused to my constituent.
Another example from my constituency involved a company called Zuco Legal Ltd. As often happens, that company came into being simply to exploit problems in mining communities. It garnered 5,000 claims, and then wrote to various firms of solicitors. One of those firms was Towells of Wakefield, which passed to me the letter that it received from Zuco.
Zuco succeeded in selling on the claims that it had gathered, although I emphasise that Towells would have nothing to do with the proposal. Zuco sold those claims on at £400 or £500 per claim, although we do not know the exact figure. It made £2.25 million and then disappeared from the scene. That is the sort of problem that has occurred in mining communities.
I hold to the point that there is a clear difference between claims farmers and trade unions. I accept that
some trade unions may have behaved less well than one would have expected, but that does not alter the fact that, in the case mentioned by the hon. Member for North-East Hertfordshire (Mr. Heald), it was the solicitor who failed to provide the level of service generally expected of a solicitor.
Mr. Beith: I have great respect for the hon. Gentleman’s work, but he cannot escape the fact that, in respect of the money that arrived in the NUM’s accounts, it is not sufficient to say that the solicitor should have told union members about it. The NUM knew that its members were getting that money, so it should have told them as well.
Mr. Clapham: Let me deal with that point. The right hon. Gentleman may not be aware that, as my hon. Friend the Member for Bassetlaw (John Mann) has mentioned before, a deal was done with the Union of Democratic Mineworkers, which had a separate arrangement. It was not offered to other trade unions in the industry, though it was offered later when some trade unions had abandoned their in-house legal services. Consequently, certain areas of the NUM went into an arrangement with solicitors whereby a payment would be passed from them back to the NUM on the basis that a form of authority would first be completed. I would have thought that, in that context, the onus was on the solicitor acting for the trade union to advise the client that he could go down the street to a firm of solicitors that would not charge him. The fact that the solicitors did not do that makes them culpable. It is not the trade union, but the solicitors who are at fault. We must also understand why the problem came about. It happened, as I said, because of preferential treatment being given to some miners’ unions and not to others.
The purpose of part 2 is to bring some form of regulation to claims farmers. Where the claimant has a relationship with a trade union, we have been able to ensure that the Law Society acts for them. I have referred many complaints to the Law Society, most of which were dealt with, bringing redress to claimants who could claim back the money held by law firms to pay for the services provided by the claims farmer. I continue to hold to my point that there is a clear distinction between the trade unions and claims farmers. One or two trade unions may not have provided the service that they should have, but that should not be used to tarnish the whole trade union movement. In my estimation, the trade union movement has been a force for good.
It is essential to overturn the Barker judgment and to go back to the law as established in the Fairchild case. In that case, it was clearly established that the responsible employer or insurer had to pay full damages to claimants suffering from exposure to asbestos and mesothelioma. I believe that we must return to that principle and hope that the Minister will table a Government amendment in Committee to achieve it.
There has been a marked increase in mesothelioma claims over the last 40 years. For example, in 1966, there were just 153 claimants; today, there are almost 2,000 diagnoses of mesothelioma cancer each year, and the prediction is that the number will increase. The
Health and Safety Executive’s latest projection is that it is likely to peak in about 2015, reach a plateau and then taper away by 2050. However, one authority—an investigative journalist by the name of Peter Martin, who wrote an article in The Sunday Times Magazine of 16 May 2004—has estimated from his research that 186,000 deaths are likely between 2000 and 2050, as a result of exposure to asbestos. So it is essential that we return to the law as set by the Fairchild ruling.
A little earlier in an intervention on my hon. Friend the Member for Manchester, Central (Tony Lloyd), I referred to the fact that, under the Barker decision, people could not make a claim under the Pneumoconiosis etc. (Workers’ Compensation) Act 1979, and I did so because of a legal opinion that I received by e-mail from a QC by the name of Allan Gore, who practises at 12 King’s Bench Walk. I shall read the pertinent part for the Minister:
“In Barker no answer is offered to the question. But if fair in Fairchild, why is it not fair now? Surely the answer cannot simply depend on what was argued in each case? Victims will now obtain only partial damages in many cases. This leaves cases outside the 1979 Act so that safety net is not available.”
That is why I have referred to the fact that redress under the 1979 Act would not be available, but the Minister has been advised that it would be available.
I have no doubt that the Government could say that redress is available under the 1979 Act for claimants to make such claims, but I can understand the logic that has decided that the 1979 Act is not available for that purpose. One of the planks of the Barker decision was that, if people were unable to identify one of the employers for whom they worked, their damages would be reduced accordingly. The 1979 Act provides for claims to be made where an employer has either gone out of business or cannot be traced, or there is no insurer. So it logically follows that, given the Barker decision, there could be no claim under the 1979 Act. If that is the legal decision, the Government must ensure that the route to redress under the 1979 Act stays open.
Overall, this is a good Bill. It will deal effectively with claims farmers and allow us to introduce some regulation and order, and by doing so we will avoid people being exploited in the way they have been exploited in mining communities.
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Jeremy Wright (Rugby and Kenilworth) (Con): I declare an interest as a non-practising barrister, although not in the field of personal injury or negligence. I want to say a few words about part 2, which I welcome, and then to say a little more about part 1. I am certain that part 2 is an entirely appropriate and necessary measure, which will introduce some consistency and ensure that claims farmers are treated in the same way as lawyers and insurers. That is entirely welcome. Like my hon. Friend the Member for North-East Hertfordshire (Mr. Heald), I hope that that there will be full consistency, and that trade unions will be included in the general consensus.
As the House has heard, the Constitutional Affairs Committee, of which I am a member, considered the Bill in some detail and concluded in its investigation that there is no compensation culture. There is broad agreement not only about that, but about the fact that there is a perception of a compensation culture. In my
view, that is almost as bad. That perception is widespread and profoundly damaging, as other hon. Members have said. Claims management companies have contributed substantially to that perception, and that is one of the many good reasons for regulating their behaviour. The Government wish to go further to address the apparent perception that there is a compensation culture—and that brings me to part 1 of the Bill.
There is no doubt that the perception of a compensation culture must be challenged and changed, because it is doing a great deal of damage. Of course it is right that if somebody suffers injury or loss as a result of negligence they should receive compensation for their loss. That is clear, and it is the law, but it seems to me that a sense that there is no longer any such thing as a straightforward accident for which no one is to blame, and that someone is always to be held financially accountable, is corrosive.
It is clear that people are not rushing to the courts to pursue claims. That is what the evidence shows us, but it is also clear that many of those who operate voluntary organisations and the like still have a profound fear that they might do that, and that fear has to be addressed by the House. That fear is important because it inhibits activities that are not only enjoyable, as my hon. Friend the Member for Canterbury (Mr. Brazier) described, but can be extremely valuable for the economy. That is important, because clause 1 is about persuading people that the position is as the Government argue it to be.
The law does not prohibit someone from operating a voluntary organisation or running a scout troop or adventure training organisation or anything like it, but the law will consider someone’s behaviour, and if it is reasonable and they have taken appropriate measures to ensure that risks are limited, they will not be liable. However, that is not the perception. The perception is that if people run an event, they may be liable. That is important, because the effect is difficult to measure. When we look at the figures, we can see whether accident claims have gone up or down. That is quantifiable, but we cannot quantify the things that do not happen—all the decisions taken by teachers not to run a school trip, or by youth club organisers not to undertake a potentially dangerous activity that they fear may leave them liable to legal action. There is an area of undisclosed and undeterminable activity that is not happening, and that is the real root of the problem.
There is no doubt that that non-activity is real. This is a genuine and far-reaching problem. I do not want, and I am sure that other hon. Members do not want, to live in a society where in some activities that our children pursue in their education it is made impossible for them to fail, while they are told that other activities are too risky for them even to try. If we pursue that sort of scenario, we will discourage our potential entrepreneurs and scientists from trying the type of activities that inevitably involve risk, but without which progress cannot be made in a competitive economic environment. That is the kind of Britain that I fear we are moving towards, not because of a reality but because of a perception.
I support wholeheartedly the Government’s intention and aspiration to address that perception, but I have severe doubts whether clause 1 is the way in
which we should go about doing so. My basic principle is that if we can do something better without making extra legislation, we should do so. That is something that will be explored as the Bill progresses through the House. I wonder whether the Government can achieve what they, quite properly, want to achieve other than by constructing something like clause 1. Clause 1, as the Government have made perfectly clear, restates the law. In their view it does not change the law, although I appreciate that some hon. Members disagree with that assessment. The Government believe that clause 1 is about expressing the law more clearly and making clear to everyone who has an interest in this area of the law exactly what it says.
What the Government really need to do is to get that message across to the people likely to be affected by the law, but the way to do it is not with a clause in a new piece of legislation, which will hardly come immediately to the attention of people engaged in voluntary activities, or who run scout troops, adventure training or anything of that nature. Those people will want to hear directly from the Government what their responsibilities are and what they are liable for. That is a communication job; it is an exercise in getting the message across. It is—dare I say it?—a public relations exercise. If there was ever a job for the Government, that must be it. However, given all the problems that have been outlined about clause 1, all the difficulties of defining precisely what a desirable activity is and all the possible downsides that we have discussed, could we not do things in another way? I hope that in the course of the debate we shall consider that point more carefully.
To be fair to the Government, they have accepted that they cannot simply rely on clause 1 to get across the message that the compensation culture is a myth and that people should not change their behaviour as a result of that myth. There is clearly much more to be done. In an intervention on my hon. Friend the Member for North-East Hertfordshire, I referred to activities that are not covered by clause 1 and which relate to the Health and Safety Executive. There is much work to be done in that regard. If the Government are to succeed in persuading those who operate in the voluntary sector and elsewhere that they are not liable to penalties, in the form either of prosecution by the HSE or of a case brought by someone injured in an accident, they will have to consider not only the civil law but also the criminal law, and ensure that the HSE gives clear guidance about what people are safely able and entitled to do.
I hope that the Government will go further and consider the work of the HSE and make sure that the guidance it issues is clear, and does not change behaviour in undesirable ways.
Mr. John Gummer (Suffolk, Coastal) (Con):
The provision would need to be much wider than my hon. Friend suggests. A farmer in my village used to give up two days to display lambs to young children—one to raise money for the parish church and the other to raise money for the local hunt. He can now do neither, because the HSE warned him that the children might
catch a disease if they touched the lambs. That has had a devastating effect on our small village, so how can we reach out to such people?
Jeremy Wright: I am grateful to my right hon. Friend, who makes a valid point. Part of the difficulty is that the HSE appears to operate on the premise that it must do whatever is necessary to reduce the prospect of an accident almost to zero. That approach is fundamentally flawed and, as many Members have said, although we should look for methods of reducing risk, we must always accept that we cannot eliminate it entirely. We must also accept that if we reduce to almost nothing the chance that people—especially young people—will engage in potentially risky activities, we shall damage their development far more than the risk of an accident would. The Government will have to look at the matter in a broader context than that presented by the Bill.
It is important that we recognise what is right about the Bill: it addresses the long-overlooked issue of how to regulate the claims farming industry. That is welcome and we shall make sure, as the Bill goes through Committee, that those provisions work as well as possible. To achieve that, the Government must avoid drawing attention away from their primary purpose by leaving clause 1 as it is, because it may simply act as an unwelcome distraction from what the Bill will, I hope, do effectively.
The Government can address the perception that we have a compensation culture, but they need to get their information transmission mechanisms right, and to send the right messages through Departments, through the HSE and through regulation of the claims farming industry that the compensation culture is not a reality, and never can be. It would distract us, and the individuals whom we are trying to help, to talk incessantly about the sorts of legalistic problems that clause 1 throws up. I hope that the Government will take those comments on board and that the Bill can be improved still further as it progresses through the House.
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