Draft Personal Injuries (NHS Charges) (Amounts) Regulations 2006

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Caroline Flint: I will attempt to answer all the points that have been raised. However, some rather interesting scenarios have been mentioned about which I will have to write to hon. Members, if that will suffice. I shall try to deal with as much of what they have raised as possible.
On the employers liability compulsory insurance market, there were worries that the regulations and the extension of provision would lead to premiums for employers shooting up. I shall preface my remarks by saying that we consulted with all parties on the regulations in order to try to get this as right as possible, while placing as few burdens as possible on employers.
On premiums, the report on the ELCI market published by the Department for Work and Pensions in December 2003 recommended that the implementation of the injury costs recovery scheme be delayed for a year. The Department of Health accepted that, because we felt that we needed to look at the market a little more. However, at the end of 2004, when the draft regulations were considered, further concerns were raised about the timing of the introduction of the ICR scheme, as the ELCI market was still considered fragile, so it was delayed again.
Since then, DWP and the Health and Safety Executive have implemented most of the recommendations of the 2003 report. They have required insurers and brokers to provide longer renewal periods to enable businesses to shop around for better deals. They have introduced a scheme called “Making the market work” to help trade associations and others to access the insurance market more easily by providing details of good practice in health and safety. They have provided improved guidance information about ELCI on the new small business service website. That is important because employers are particularly concerned about health and safety at work.
We hope that the measures will stimulate improvements in health and safety at work because people prefer not to have to pay out premiums. That has been a positive aspect of our discussions. We would much rather see fewer accidents at work for which an employer is liable than have to recover costs after people have been injured or killed as a result of poor health and safety practices, regardless of the fact that the NHS might get some money back. That is not the first principle in this case.
We are producing new procurement guidance to ensure that all bodies that contract with the public sector have valid ELCI, and we published a framework for vocational rehabilitation in October 2004. In February 2005 we removed the need for sole owners of limited companies to obtain ELCI.
Average premium rises quoted by the Association of British Insurers for 2004 suggest that there were lower than expected rises of 7 per cent. A number of insurers reported that, in response to competitive pressures towards the end of 2004 and into 2005, premium income was flat or even declined. We estimate that the impact of the scheme will be that premiums increase by only 1.5 per cent., and that estimate has been confirmed by the ABI. Following the postponements in order to look into the issue, we are now in the best possible position to bring forward the regulations so that the scheme can become live on 29 January.
On contributory negligence, I can tell the hon. Member for Westbury that one of the key messages to come out of the consultation on the draft regulations that took place in 2004 was that the Department needed to look again at how the ICR scheme would deal with contributory negligence. To allow contributory negligence to be taken into account in a much wider range of cases, new primary powers were included in the Health Act 2006. Today’s regulations do not make provision for contributory negligence to be taken into account, as they are made under powers in section 153 of the Health and Social Care (Community Health and Standards) Act 2003, which is subject to the affirmative procedure.
The power to make regulations for contributory negligence is subject to the negative resolution procedure. However, I can reassure the Committee that we intend to make such regulations. Three sets of regulations are to be introduced. The ones on contributory negligence, reviews and appeals will be placed before the House on 18 December. They will set out in detail how we are dealing with the issue. I shall follow up some of the hon. Gentleman’s points and will write to him in due course.
The hon. Member for Southport asked whether, in circumstances in which an individual, for whatever reason, does not pursue compensation, the NHS could pursue it independently. The short answer is no. This is a secondary procedure, following up the claim of the individual for compensation, which is the right thing to do. We are trying to make the system as effective and as simple as possible. As far as I understand it, therefore, the NHS would not pursue a claim in the first instance unless the individual who had been injured through negligence was already pursuing the claim.
If I may, I shall write to the hon. Gentleman on the matter of who has the first call on compensation, and what happens if there are insufficient funds, and also on the payment by results system and how that will affect the arrangement under the regulations. One could, I suppose, have a system in which the trust keeps a detailed catalogue of the treatments that have been given, dot by dot, and then tries to work out the actual cost on each occasion. That would create quite a burden and a top-heavy administration, which is why we have chosen what some may consider a blunt instrument. The average tariff system is an effective one, however, and it has proved its worth in the RTA scheme.
The tariffs will be uprated yearly, but as we are laying the regulations with the new tariffs in the new year, we shall defer to 2008 next April’s annual uprating, which would otherwise have been very close. We thought that it would be nonsense to change all the tariffs within a few months of laying the regulations.
Dr. Pugh: I accept that I shall receive a letter on the interaction with payment by results. It seems to me that contributory negligence cases will be the most complex, and the cost-benefit analysis for them will be quite different from that for a straightforward compensation case. I mentioned earlier the possibility that a case proceeds but is scarcely worth pursuing. Who decides to cease the pursuit in such cases? Is it the compensation agency or the acute trust itself?
Caroline Flint: I shall follow up with more detail on that. The individual who is the injured party must pursue the claim. If there is contributory negligence, the matter is more complex. Ultimately, however, the NHS is in a secondary position in all cases; things only kick in for the NHS if compensation has been paid. So the matter would have to be resolved between the parties—the claimant and the party against whom they claim. The scheme imposes a legal duty on people who pay compensation to inform the compensation recovery unit. They would be breaking the law if they did not. That is when the CRU can enter the picture and reclaim costs for the NHS.
In a straightforward situation, an individual claimant might have nothing further to do with the NHS process, because the CRU would follow up and establish the relevant number of days and the number of ambulance journeys. The measure is a secondary one, therefore. A different view may be taken in future, but the means that we have chosen is the best way to proceed in trying to keep the system simple and it seems to have worked pretty well for the RTA scheme. I shall have a look in Hansard and, if I have not dealt with anything that the hon. Gentleman said, I shall write to him.
The hon. Member for Westbury mentioned the ceiling on costs. In the consultation, the view was that there should be a level above which costs should not go. I am happy to provide the hon. Gentleman with more detail on that, but all parties, including employers, felt that £37,100 was the right sort of ceiling.
I think that both the hon. Member for Westbury and the hon. Member for Southport asked about when a person makes a claim and then dies. Off the top of my head, I would say that the claim could be pursued by, for example, the individual’s family and, therefore, the same procedure would be followed. When the claim is resolved, and if compensation is offered, the compensation recovery unit would be notified and NHS costs recovered.
Caroline Flint: As I understand the scheme, the NHS has no scope to pursue a claim if the injured party has not made a primary claim, regardless of whether they die. The individual or, where there has been a fatality, somebody on their behalf, must make the primary claim. As I said before, the NHS and the CRU get involved only as part of a secondary action. That was the basis of the discussion about the extension when Parliament considered the legislation, although I realise that people may disagree with that. To give a clear answer to a fair question from the hon. Member for Westbury, no, the NHS would not be able to pursue a claim unless an injured party had made a primary claim.
I hope that I have covered most relevant points. I shall check Hansard to see whether anything is outstanding and, if so, write to hon. Members, but I hope that we all agree that the regulations are a logical extension to the road traffic accident scheme—it is fair to the NHS and the taxpayer.
Question put and agreed to.
That the Committee has considered the draft Personal Injuries (NHS Charges) (Amounts) Regulations 2006.
Committee rose at twenty-eight minutes past Nine o’clock.
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Prepared 15 December 2006