The
Committee consisted of the following
Members:
Chairman:
Mr.
Christopher
Chope
Borrow,
Mr. David S.
(South Ribble)
(Lab)
Crausby,
Mr. David
(Bolton, North-East)
(Lab)
Davies,
David T.C.
(Monmouth)
(Con)
Fallon,
Mr. Michael
(Sevenoaks)
(Con)
Flint,
Caroline
(Minister of State, Department of
Health)Gidley,
Sandra
(Romsey)
(LD)
Greenway,
Mr. John
(Ryedale)
(Con)
Griffith,
Nia
(Llanelli)
(Lab)
Hall,
Patrick
(Bedford)
(Lab)
Howarth,
Mr. George
(Knowsley, North and Sefton, East)
(Lab)
Love,
Mr. Andrew
(Edmonton)
(Lab/Co-op)
McIsaac,
Shona
(Cleethorpes)
(Lab)
Mactaggart,
Fiona
(Slough)
(Lab)
Murrison,
Dr. Andrew
(Westbury)
(Con)
Pugh,
Dr. John
(Southport)
(LD)
Rosindell,
Andrew
(Romford)
(Con)
Ward,
Claire
(Lord Commissioner of Her Majesty's
Treasury)Jenny
McCullough, Committee
Clerk
attended the Committee
Seventh
Delegated Legislation
Committee
Thursday 14
December
2006
[Mr.
Christopher Chope in the
Chair]
Draft Personal Injuries (NHS Charges) (Amounts) Regulations 2006
8.55
am
The
Minister of State, Department of Health (Caroline Flint):
I beg to move,
That
the Committee has considered the draft Personal Injuries (NHS Charges)
(Amounts) Regulations 2006.
I am pleased to bring these
regulations before the Committee. For 70 years, hospitals have had the
right to recover the costs of treating people who were injured in road
traffic accidents where such people were paid injury compensation. The
NHS costs are borne by the compensator, rather than by the accident
victim or the hospital. The principle is that those responsible for
causing injury to others should pay the full cost of their negligence,
including the cost of treating the victims injuries.
Under the existing Road Traffic
(NHS Charges)Act 1999, costs are recovered centrally and then
paid back directly to the NHS trusts that provided the treatment. So
far, £300 million has been paid to hospitals in
Britainmoney that they can reinvest in front-line patient care.
For example, last year, Leeds Teaching Hospitals trust recovered
£1.3 million, which is enough for 250 hip replacement
operations.
Part 3 of
the Health and Social Care (Community Health and Standards) Act 2003
took powers to extend recovery of NHS costs to cases involving personal
injury compensation in general. When a person receives compensation for
an injury, the cost of any NHS hospital treatment and ambulance
services received in connection with the injury will be recoverable
from whoever paid the compensation. That is particularly relevant to a
case in which an employer is liable for health and safety and an injury
has been caused to a member of their staff.
The new injury costs recovery
scheme will come into force on 29 January 2007. The income raised from
the scheme will be paid straight back to the hospitals that provided
the treatment. Those hospitals will be free to use the money to improve
patient services as they see fit. We hope to provide the opportunity to
recover an additional £150 million, which can then be reinvested
in front-line patient care.
The regulations make provisions
concerning the amounts of NHS charges to be recovered under the ICR
scheme. As well as setting tariffs for out-patient and in-patient
treatment, the tariff for the provision of NHS ambulance services, and
the maximum amount to be recovered in relation to any one injury, the
regulations set out how the scheme deals with the range of
circumstances in which the amounts to be recovered need to be
adjusted.
The ICR scheme will be
administered by the Department for Work and Pensions compensation
recovery unit on behalf of the Secretary of State for Health. The unit
has operated the current road traffic scheme since 1999; it operates
the benefit recovery scheme; and it has extensive links with, for
example, solicitors and insurers. Compensators will have a legal
obligation to inform the CRU of any claim for personal injury
compensation.
The
postponements of the implementation of the regulations are due in part
to concerns about the market for compulsory insurance in relation to
employers liability. The concern was whether the measures would
lead to a huge increase in premiums for employers. I will be happy to
answer questions on that. Due to those postponements in implementation,
considerable work in preparation for the successful delivery of the
scheme has already been undertaken. For example, the electronic data
transfer system used by the CRU to communicate with NHS trusts on the
road traffic accident scheme has already been updated and redesigned to
accommodate the additional requirements of the ICR scheme. NHS trusts
were involved in the testing of those changes to the electronic system,
and have had input to the accompanying guidance, to assess whether the
system is user-friendly and fit for purpose.
Due to efficiencies achieved by
CRU, the cost of operating the expanded scheme will, at £2.4
million, cost only slightly more than the current scheme, at around
£2.2 million this year. That is a good example of how
effectively the CRU works.
Under the existing RTA scheme,
the amounts to be recovered are set using a simple tariff scheme. The
tariff consists of a single one-off payment where hospital treatment is
provided without admission, currently £505, or a daily rate,
currently £620, for each day or part day of admission to
hospital, excluding the day of discharge. There is also a statutory
ceiling on how much can be recovered in relation to the treatment of
injuries resulting from any one incident. The ceiling is currently
£37,100, which is roughly equivalent to 60
days in-patient treatment. Those amounts have been migrated to
the ICR scheme, with the addition of a new element to cover the cost of
any ambulance journeys that may be required. That amount has been set
at £159. Regulation 2 sets out the amounts of NHS charges
payable.
The tariff
system means that the amounts recovered frequently do not exactly match
the cost of providing treatment in a specific case. For simplicity,
however, and to reduce administration costs, the tariffs represent
average treatment costs. All the amounts have been established by
calculating the average costs of treatment for injuries that are
typically suffered in accidents. For ambulance journeys, the
calculation is based on the average cost of providing ambulance
services.
In summary,
the regulations remove from the general taxpayer the burden of paying
to treat victims of other peoples negligence. They are
consistent with the principle that those responsible for causing injury
to others should meet the full cost of their wrongdoing, including the
costs of NHS treatment; otherwise, wrongdoers are subsidised by the
taxpayer. The regulations are a logical extension of the Road Traffic
Act scheme. The income that is collected will be paid
straight back to the hospital or to the ambulance service that provided
the treatment. That could contribute an additional £150 million
for reinvestment into front-line services, adding to the £300
million that is already delivered by the RTA scheme. I commend the
regulations to the Committee.
9.1
am
Dr.
Andrew Murrison (Westbury) (Con): It is curious, is it
not, that we are considering these regulations in the week of
publication of the Department of Health simplification plan, which
purports to reduce the amount of regulation and red tape. That said,
there is much in the regulations that the Opposition are inclined to
support. As the Minister said, the regulations will simply extend the
existing provision covering road traffic accidents. That will produce a
sizeable sum of money for the national health service.
I am a little confused about
the figures that the Minister gave, however. We understand that the
cost of treating and managing cases that have arisen out of negligence
is something like £170 million to£190 million,
and the Minister thinks that she is going to save £150 million.
However, when one drills down into the regulatory impact
assessmentas I did last nightone finds that
£77.5 million will evaporate in public liability costs. So
perhaps the news is not as good as we had
hoped.
There will be a
burden on businessthough we do not know how much, and the
Minister said that she would comment on the extra insurance costs that
would result. That burden will fall disproportionately on certain
sectors, some of which have been particularly hard hit in recent years.
So, despite our general support for the regulations, we should not
imagine that there will not be unintended consequences, because clearly
there will be.
We have
some questions for the Minister. Some of them concern that which is not
evident in the otherwise fairly good guidance to the regulations. There
is very little discussion of contributory negligence and how that will
be managed in terms of apportioning blame and recouping cost. That is
potentially a lawyers beanfeast, and I should like to hear how
the Minister proposes to handle complex situations. Her remarks
suggested that identifying a culprit is invariably straightforward, but
it is not.
It would
be useful to know the reason for the ceiling on sums recoverable from
parties deemed to have been negligent. It seems to me that
£37,100 is a relatively minor sum in the context of many
injuries. If the principle behind the regulations is accepted, it seems
artificial to create a ceiling, particularly a low-level one.
These days, health
interfaces very much with social services, and the boundary between
them is constantly being eroded. Many of the costs that bear on the
state as a result of injuries accrue in fact to social services. Does
the Minister perceive a difficulty in apportioning those costs in the
context of the regulations? On a more philosophical note, does she
envisage an extension, in the fullness of time, to allow for injury
costs that are attributable to negligence, and that bear on social
services, to be recouped from the parties deemed
liable?
It would be
interesting to know what would happen where a claim had not been made
against a body that
might have been negligent. For example, in the majority of serious cases
involving treatment, the injured party would be inclined to claim
against a negligent employer. However, that will not always be so.
Cases involving death in the short or longer term may fall into that
category. I suspect that the NHS would not be inclined to make a claim
against an employer who might have been negligent in a case involving
death, because the individual who was injured would not have made a
claim in the first instance. However, it is not entirely clear whether
that is so. It would be interesting to hear whether the national health
service would make such a claim, which could result in its receiving
quite a large sum of
money.
In general, we
support the measure and hope that it will raise funds for the NHS,
which is its intention. As we accept the principle that the NHS may be
reimbursed costs from road traffic accidents, which has been long
established for 70 years, we have no philosophical objection to the
extension of that provision in the
regulations.
9.6
am
Dr.
John Pugh (Southport) (LD): We, too, welcome the
regulations, which extend a scheme that seems workable, practical and
is already raising revenue for the
NHS.
I understand that
this is a compensatory scheme for the NHS when there is an accident,
when someone is liable and when compensation is already paid. Under
those circumstances, the NHS can claim back costs based on a fixed
tariff. Compensation follows admission or proof of liability, and I
think that I am right in saying that it can be paid either by an
insurance company or by an individual if they are devoid of insurance.
Clearly, that will up the cost of insurance. The Lords debate on this
matter was largely preoccupied with that and with the readiness of the
insurance market to cope with the new circumstances. This scheme seems
highly desirable, however, because it forces employers to
focus clearly on their responsibilities and will put a real financial
burden on them if they do not provide adequate insurance. The measure
therefore encourages safety and should save the NHS funds. All that has
got to be good. Where liability is contestablewhere it is not
pursued or establishedthe scheme does not apply, because it
requires proof of liability, agreement and a willingness to
compensate.
I should
like to raise only two sets of concerns, the first being legal and the
second financial, bearing upon the funding of acute trusts. First, in
the case of clear liability but an unwillingness to pay, could a
situation transpire in which the NHS had the resources to pursue its
claim but the individual did not succeed in pursuing theirs? In other
words, the NHS may be compensated for its trouble, but the individual
may not get anything from the negligent employer, or whoever. Is that
possible under the scheme, or does compensation for the NHS require
compensation already to have been acquired for the individual who is
affected? In the event of compensation funds being
exhaustedwhere the person providing the compensation does not
have the money to provide that at the level requiredis there a
principle of first call? Does the NHS have priority in
getting its money back over and above the individual who is directly
affected? Are there any ground rules on
that?
Secondly, on
acute trust finance, I am happy with the principle of tariffs; it is a
swings and roundabouts system, and it is better than going through a
bureaucratic process of detailed calculation. The costs come to the
acute trust, which can claim costs in all circumstances, except where
it is the negligent employer, or whatever, in which case it cannot make
a claim on itself. However, thinking of the future, will this process
of rewarding or paying the NHS for work done be unconnected from the
payment by results system? In cases of mixed liability, as the hon.
Member for Westbury mentioned, where it is complex to follow up and
find out who was negligent, how far they were negligent and to what
extent there was contributory negligence, will it be worth following
the process in all cases? It will be a fairly complicated process and
in some cases the trust will be obliged to pursue it, but if that is
so, the cost of pursuing it may not be worth the reward that is
subsequently
obtained.
If, for
example, the process of investigating or pursuing the negligent
employer fails to secure the fundsif, say, the employer
disappears or goes out of businessis it possible for the
hospital to claim ordinary payments under the payment by results
scheme, assuming that there is an overlap in the funding, or would that
be regarded as a loss? Would it be regarded as a loss to the acute
hospital if the money did not arrive for whatever reason, given that a
case that was not a matter of negligence would be paid under the
payment by results scheme and a negligence case would be expected to be
paid for from compensation money? In pursuing such claims, does the
acute trust pay any kind of transfer payment to the compensation
recovery unit, or is any claim that it makes, or asks the CRU to make,
purely a win for the hospital, with no additional costs incurred in
pursuing it? Whose decision is it to pursue more complex cases? Can the
acute trust call it off or can the CRU call things off at a certain
point?
Is the
situation of all trusts the same? Are foundation trusts in the same
boat on this issue as any other acute trust? Those are matters of
detail, not matters of principle, to which I should like the Minister
to respond.
I should
like to mention two specific issues with regard to the impact
assessment. It seems that some employers will worry more about their
insurance and liabilities than they would previously have
doneand so they should. However, in the building trade, for
example, there is a tendency for people who work for agencies or are
subcontracting to be employed on building sites, which are dangerous
environments in many respects. I suspect that the regulations will
accelerate that trend, because they shift the liability from the
builder who runs the site on to the direct employer, who would in such
cases be the subcontractor or the agency providing the staff. Have the
Government assessed specifically the effect that the regulations may
have on the building trade?
Finally, although I am sure that
I could almost answer my own question, what would happen in the event
that an organisationthe House of Commons, sayfailed to
provide adequate security and some accident or disaster affected a good
number of employees who then made compensation claims against the House
authorities? That could apply to any enterprise. Such an incident would
not necessarily be a matter of negligence; it could be connected with
terrorism, for example. Would there, equally, be a claim for the NHS
services that provided whatever was necessary to sort out such an awful
situation? If a terrorist incident happened where adequate concern for
public protection had not been shown, would the NHS be compensated as a
result?
9.14
am