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Baroness Hollis of Heigham: We thank the Minister for his responses. At least we have the consultation, even if we still have the clause.
On a point of clarification, will the Minister confirm his reply that where the compensators agree that one should act for all of them, that is fine, and that the provision comes into play only as a safety network? I understand that to be the case.
If there is no agreement between the defendants, the defendants sue each other. I do not think that the assumption was that the Secretary of State would sue the compensators separately. The defendants will sue each other and the court would sort it out either through third party proceedings or through a contribution notice. Will the Minister take away the issue? I do not have strong views but clearly neither the victim nor the DSS is involved in disputes between insurers. They agree to sue each other and the courts sort it out between them. That may be a more appropriate procedure than the one the Minister envisaged. I do not feel strongly about it. It is a question of what is expeditious and reliable in these cases. Does the Minister wish to comment?
Lord Mackay of Ardbrecknish: On thinking about it, it seems to me that in those circumstances in which we are involved and wishing to recover benefit, we have
the problem of which compensator to recover the benefit from. I am not sure how the compensators would decide who sues whom.However, I am content to reflect on the issue. I believe that we are agreed that in the small number of cases in which those circumstances are likely to come about, we need some provision so that the Secretary of State can recover the money.
Baroness Hollis of Heigham: I agree with the Minister that we must have a fail-safe situation. In the light of his undertaking to review and consider whether there is a more effective and expeditious way to resolve the problem, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 20 [Amounts overpaid under section 6]:
9.15 p.m.
Baroness Hollis of Heigham moved Amendment No. 43:
The noble Baroness said: The amendment concerns overpayment. It touches on an issue, although with different parties, with which we dealt in Amendment No. 28. I hope that we shall have the same helpful, conciliatory, supportive and understanding response from the Minister as we happily enjoyed then.
We are not entirely clear about the intention of this clause; perhaps the Minister can help us. It seems to suggest that if someone--the compensator, I presume--has overpaid moneys to the DSS, the DSS may (though not necessarily must) repay the overpayment. Is that correct? If so, why is it not "must"? If that is a correct reading of the intention of the clause, why should the Government keep the excess?
Similarly, where the DSS has overpaid benefit to the victim--or the claimant--the DSS may claim back deductions after the event. We are rather uneasy about that. Clearly, if the victim has been obviously negligent or fraudulent in the giving of information, there should be a complete right of recovery; but I do not think that the situations of the compensator being repaid by the DSS and the victim repaying the DSS are analogous or comparable.
If the DSS has overcharged the compensator, that is the fault of the DSS and it should make good the compensator's loss. If the DSS has overpaid the victim, where there is no negligence or fraudulent intent on the part of the victim, possibly, for example, because a pension was awarded on the basis of a 20 per cent. disability and it turns out that the person has only a 15 per cent. disability, the victim will in good faith have lived off that money and may well not have the resources to refund the difference.
It is worth labouring the point because all the evidence shows that the DSS is notoriously inaccurate in its delivery of benefits. I recognise the fact that a lot of the benefits are complicated; they are means-tested and circumstances change. But the Minister will surely not challenge the fact that something like 30 per cent. of CSA cases are still wrongfully assessed and the latest auditor's report shows that something like 25 per cent. of all income support calculations are inaccurate, faulty or wrong. Similar rates of negligence apply to other means-tested areas of benefit, including family credit. The Minister knows that; I know that; the information is in the public domain.
We believe that the DSS is likely to be more careful in its calculations if it knows that, if it makes a mistake where the victim is neither negligent nor fraudulent, it may be stuck with the consequences. We accept that this is a difficult and delicate point and that discretion needs to apply as to what is reasonable under the circumstances. Clearly, in some cases the victim should repay; in other cases it would generate real hardship. Where it is the fault of the DSS, it should be stuck with its mistake.
If that is what the Government propose, it is essential that there be consultation about regulations to ensure that the victim is not left in considerable uncertainty and ultimately, through having to repay benefit, in considerable hardship. I beg to move.
Lord Mackay of Ardbrecknish: In looking at the question of consulting on the regulations, perhaps I may say a few words about this clause. It deals with complex and difficult situations. It might help the noble Baroness in deciding what to do about her amendment if I go through them.
The clause deals with the situation whereby, other than as a result of a review or an appeal on a benefit recovery issue, the amount of recoverable benefits paid to the Secretary of State is in excess of the amount for which the compensator is liable.
Under the current scheme there is provision for treating a deduction from the victim's compensation payment as a recovery of benefit overpayment. This provision also enables the Secretary of State to make a refund where no recoverable benefit overpayment is outstanding.
The situation under the reformed scheme will not be so straightforward because it will usually not be clear whether an overpayment or recoverable benefit can be treated as a recovery of benefit overpayment; neither will it always be clear whether the overpayment of recoverable benefit has effectively been made wholly by the victim, wholly by the compensator, or partly by both. There are two areas where the situation may not be entirely clear.
Subsections (1), (2) and (3) of the clause provide for regulations to be made to enable the Secretary of State to treat the amount overpaid as a recovery of an overpayment or to refund an overpayment of recoverable benefits to the compensator, the victim, or both.
Subsection (4) provides that the regulations may also provide for a recalculation of the amount of the reduction of the compensation payment, for giving credit for any amount already paid and for the payment of any balance to, and the recovery of any excess from, any person.
Subsection (5) clarifies that the provision does not apply where a certificate of recoverable benefit has been revised on review or appeal. These are the kinds of cases we dealt with under Clause 14.
I am sure that Members of the Committee will agree that these matters are complex; the scenarios we are discussing are complex and give rise to a range of complex situations. We want to ensure that we introduce rules which are both fair and workable. We shall indeed consult with interested parties before deciding on the details of how the regulations will work.
I hope that what I have said will be helpful. I am quite prepared to believe that it might be more helpful once the noble Baroness has a chance to read it tomorrow. Some parts of my explanation were hard to follow, even as I was reading them, because of overpayments of recoverable benefits and recovery of benefits overpayment. I hope that what I said helps the noble Baroness. Added to that, I give her the assurance that I have given on a number of occasions that of course we shall be consulting interested parties before deciding the details of the regulations. For all the usual reasons, I should prefer to leave it at that assurance rather than put it on the face of the Bill.
Baroness Hollis of Heigham: I thank the Minister. I shall look forward to reading his elegant prose when I read Hansard tomorrow. The Minister has explained Clause 21 and its purport in what I had intended to call more transparent prose, but I am not sure about that because it has sometimes been more opaque. I take his substantive point that this is not something that can be laid down other than to say that there may be a "may" clause; that is to say that areas of discretion may come into play. We also take his assurance about the regulations.
I am still concerned about the situation of a recovery of overpayment to the victim when the DSS has been at fault in its assessment and where the victim was neither negligent nor fraudulent, and in good faith received the money and perhaps in good faith has lived off it. Under what circumstances in that situation would the Minister envisage recovery? What would he expect to do where hardship resulted? Can we have some guidance on that situation?
Page 10, line 34, at end insert--
("( ) Regulations under this section shall be made only after consultation by the Secretary of State with interested persons, including persons who appear to him to be representative of employers, employees, disabled people, consumers, the insurance industry, lawyers and other persons providing advice services.").
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