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Earl Russell: Surely, it is fair that an error should be corrected if it is discovered in a certificate no matter who is responsible for creating it. The powers of an Act of Parliament are very sweeping. If Parliament enacts that an error should be uncorrectable it is extremely difficult to do anything about it. That happened in the case of the Bude and Torrington railway, although I shall not regale the Minister with the details.
The noble Lord, Lord McCarthy, is right about the danger of all the money having been spent. The Minister may care to ponder the sad case of the woman who was bankrupted by being left £1 million in shipping shares. She inherited the shares in April 1929 and duty was payable in October 1929.
One does not need such drastic circumstances to create a situation in which recovery is being attempted when there is nothing to recover. Surely it is worth correcting errors in a certificate quickly before that happens, no matter who is responsible for creating them.
Lord Mackay of Ardbrecknish: The amendment would prevent a compensator from making a further reduction to a compensation payment in the situation where, because of a mistake or misleading information in an application for a certificate of recoverable benefits, the amount specified in it was increased on review but the victim had supplied the correct information to the compensator or Secretary of State. The noble Earl added to the opinion by giving one or two examples of a parallel nature. Perhaps in railway terms that is an appropriate expression.
I am not unsympathetic to the view that, because of someone else's mistake, a victim should not lose out by a further reduction to his compensation payment. However, the amendment as drafted could have the effect that the Secretary of State became involved in disputes between the compensator and the victim about who gave what information to whom. We would not wish to be drawn into that argument. Clearly, an important aspect is that if the victim gave wrong information upon which we acted it would be reasonable for that to be corrected and for action to be taken. Conversely, if the victim gave the correct information and the compensator did not pass it on correctly, that is a different issue.
We would like to consider the matter further and to consult with the interested parties involved. That may not be possible before the Bill is passed. Furthermore, some Members of the Committee may have noticed that the clause does not contain regulation-making powers. However, never fear, regulation-making powers are always to hand to a Minister who looks carefully for them. The regulation-making powers in Clause 14 contain powers for making the necessary adjustments to payments that have been made when a certificate of recoverable benefits is subsequently altered on review
or appeal. The issue raised by the amendment could therefore be looked at in detail when drawing up those regulations.I have already said that we will consult interested parties when we are working out the details of the regulations. As regards this matter, I certainly undertake that we will consult on the issue. If action is required after the passing of the Bill, as I suspect will be the case, we have the tools of regulation under Clause 14 to rectify any problem that has arisen along the lines mentioned by the noble Lord and the noble Earl.
Lord McCarthy: I thank the Minister for that reply which I must read carefully. I cannot agree that we will not come back with a better form of words. Many of the points that he made against our amendment are fair. I do not want to get the department involved in an argument about who is to blame. We want to say who is to blame and then we want that person to pay the money. That may be possible by regulation. However, on Report we may have another go. If necessary the Minister can tell us that that is wrong too. In the meantime, I thank him very much and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 11 [Appeals against certificates of recoverable benefits]:
Lord McCarthy moved Amendment No. 29:
The noble Lord said: Under the provisions of the Bill the victim cannot appeal against the assessment of what is to be paid in recoverable benefits until he has finally disposed of his arguments and debates with the compensator. Therefore, the liability to repay the recoverable benefits is finally discharged.
That appears to us to place the victim in a double bind. When he is negotiating, litigating or arguing a claim against the employer, a third party or whoever, he cannot be sure whether the certificate of recoverable benefits is correct, too high or too low. He may assume that it is correct, and in nine cases out of 10 it will be correct. However, if he has reason to believe that it is not correct he must wait and see and take the settlement. When he receives the settlement he must try to persuade the department that his appeal is sustained. We do not believe that that is fair.
Perhaps I may give another example. Let us suppose that as a result of an accident a victim is put out of work and claims benefit for four years. Let us suppose that the defendant claims that the victim had some of the symptoms before the accident and offers compensation for only two years. We could refer to the previous example relating to backs and feet. In the meantime, the DSS want four years' benefit returned. If, as a result of an early appeal, the victim can get that reduced to two years he might wish to settle at the defendant's offer out of court. He will save the court liability and time and he will save money. If he loses on appeal to the DSS perhaps he will not accept the settlement and will fight on to see what he can get in court. Either way, he needs
Earl Russell: I listened carefully to what the Minister said in answer to an earlier amendment about the importance of encouraging out of court settlements. I agree with him entirely. However, it seems to me that it will be very difficult to get people to settle out of court if there is a big dispute about how much of the benefit is recoverable and how much is not. It would be much easier to reach an agreement if parties could be clear what they are being asked to agree.
I do not believe that the Minister has entirely taken on board how much the provisions of the Bill will alter the processes of negotiating for a settlement and, indeed, of arguing for a settlement in court if no agreement is to be reached.
One must have a settlement on the basis of all the material information. If all the material information is not taken into account there must be a risk that the whole issue is likely to be reopened. There will be cross litigation and usually some other point can be brought into issue. Conditions worsen and new grounds of action might arise. Is it not a mistake to continue with erroneous information knowing perfectly well that it is so? Is it not like saying that you cannot stop to mend your brakes because you have to get to the end of the journey? Would it not be better to put it right quickly?
Lord Mackay of Ardbrecknish: Of course, if it is agreed, there is provision to put it right quickly. That is not a great problem in the terms outlined by the noble Earl. However, we enter into this field when there is no agreement. The purpose of the amendment is to remove the requirement that before any appeal can be brought against a certificate of recoverable benefits compensation payment must be made and any liability to pay recoverable benefits discharged. The noble Lord, Lord McCarthy, and the noble Earl, Lord Russell, have argued that the inability to appeal against a certificate until the compensation payment has been made can create difficulties for the victim in seeking to pursue a claim for damages. It is suggested that, because he disputes the certificate, the victim can be placed in an uncertain position about the outcome of his claim despite the fact that the settlement has taken place.
However, the provisions in the Bill were put in place in order to prevent an appeals system being used as a way in which to delay benefit payment recovery. If an appeal against a certificate were accepted before final settlement, even though the amount of the award and certificate could still be revised at that time, a further appeal could also be made subsequent to settlement. That would not just affect the Secretary of State in benefit recovery terms but it could lead to a further build-up of benefits which would in turn affect the size of the victim's payment.
In short, I do not believe that this amendment would remove uncertainty in the negotiating process. It could actually affect the victim because the benefit payment
Page 6, line 23, leave out subsection (3).
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