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Lord Clinton-Davis: I have a great deal of sympathy with the amendment, but there are difficulties with it, as the noble Lord, Lord Goodhart, said.

Normally, periodical payments should be a matter for the claimant, but that is not always possible, as the noble Lord said. However, the claimant's plans for the future should be taken into account. The Minister said that guidance would be available to the court, which is important, and I invite her to say something more about the availability of such guidance at this stage. That would be enormously helpful to the House in considering the Bill.

Lord Hunt of Wirral: I should like to support the noble Lord, Lord Clinton-Davis. I should not like a one-sided system to be set up, although I am aware of the views of the Association of Personal Injury Lawyers.

The association made it clear, as the noble Lord has just made clear, that we must have the guidance in place before we go further down this route. The association wrote:

My main point, however, is one that I mentioned before, which was made by Stephen Duckworth of Disability Matters and several other leading people, who speak in support of the need for rehabilitation. The International Underwriting Association and Association of British Insurers study on rehabilitation and the initiatives taken by periodicals such as Post magazine, urging forward the code on rehabilitation, make it clear that periodical payments must be in the interests of the person receiving compensation. The interests demand that there should be, when appropriate, an early and prompt return to work and/or return to normal life, when that is possible.

Will the Government have some more joined-up thinking about the need for rehabilitation at a much earlier stage, especially when the defendant is a Government department or the National Health Service, in some form or other, or the Medical Defence Union or Medical Protection Society? There is an urgent need to deal with the problem early in the interests of the claimant. Will the Minister comment on the need to ensure that the people who have suffered are at the centre of the discussion?

Baroness Finlay of Llandaff: I apologise for the fact that I have not been present at previous deliberations on the Bill, but I have been unable to attend. I should like to speak to Amendments Nos. 139A and 140A, which are in my name.

The Deputy Chairman of Committees (Viscount Allenby of Megiddo): We have not reached that group.

Baroness Finlay of Llandaff: Oh, I am sorry.

Baroness Scotland of Asthal: I empathise with many of the comments made by Members of the Committee.

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I shall reassure my noble friend Lord Clinton-Davis about our approach, and try to respond to the issues raised by the noble Lord, Lord Hunt of Wirral, after dealing specifically with the amendment.

We agree with the noble Lord, Lord Goodhart, that the views of the claimant in relation to periodical payments is the important issue. The Bill already provides for the rules of court to set out criteria that the court must take into account when considering whether to order periodical payments. As the noble Lord rightly said, it would be impractical and perhaps inappropriate to attempt to list in primary legislation all the factors that the court will need to consider. As we all know, this is a developing area of law and it is essential that there is flexibility to adjust the criteria in the light of experience. I respectfully suggest that that is best achieved through secondary legislation. We intend that the rules will assist the judiciary and parties in identifying factors that may be relevant in deciding whether periodical payments or a lump sum is appropriate. I reiterate that there will still be cases where periodical payments are not appropriate and do not meet the needs of the parties, particularly the claimant, and where the court will not so order.

We fully accept that the claimant's wishes are an important factor. I reassure the Committee that those wishes will undoubtedly be one of the factors that the court is required to consider. However, we do not believe that it would be appropriate to single out that factor in primary legislation as the amendment proposes. The court must be allowed to take into account all the individual circumstances of the case and weigh all the relevant factors against one another in making the order that it considers best meets the needs of the claimant. The weight to be given to the claimant's wishes, for example, might depend on the reasons for them and the quality of the advice on which they are based. I think that the noble Lord, Lord Goodhart, mentioned issues to do with pressure from family and whether they think a lump sum might be more advantageous to them. Those are all important issues for the court to weigh.

Does the claimant, for example, want a lump sum to spend on a holiday or to start a business? How strong is his or her business case? Has he or she been properly advised? I am sure that the court will be minded to take into account all those issues. Of course the defendant's wishes run through all of that. However, I think that it would be wrong to suggest, by placing it on the face of the Bill, that the claimant's wishes should outweigh all other factors. I therefore invite the noble Lord to withdraw the amendment.

The noble Lord, Lord Hunt, made an important point about rehabilitation. We, too, see rehabilitation as a very important issue. We hope that, by the introduction of periodical payments, it will be easier to settle cases earlier. We know from research that the earlier these issues are settled, the easier it is for the injured person to be rehabilitated. We hope that that is something that will inure to the benefit of the claimant. We have already said that the proposals offer advantages for the defendant. Rehabilitation, however, is a critical issue. I reassure the noble Lord that the importance of the rehabilitation

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issue—how we address it and how we encourage individuals to take advantage of the opportunities for rehabilitation—is very much on the agenda and part of the conversations that we are having with various government departments. I assure him that it is not an issue that this department or other departments will fail to address. We are addressing it with great energy.

Lord Goodhart: I am grateful to the noble Baroness for her helpful reply and her assurance that there will be guidance in regulations on the factors that have to be taken into account by the court in reaching its conclusion. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy Chairman of Committees: Before calling Amendment No. 139ZAA, I have to inform the Committee that if this amendment were to be agreed, I would not be able to call Amendments Nos. 139ZB and 139ZC.

Lord Hunt of Wirral moved Amendment No. 139ZAA:

    Page 44, leave out lines 34 to 40.

The noble Lord said: The amendment would leave out Section 2 of the Damages Act 1996 so far as subsection (4) is concerned. Amendment No. 139A, which is within the group, would leave out lines 4 and 5 on page 45. That provision concerns,

    "enabling a party to apply for a variation of provision included under paragraph (a) or (b).

Amendment No. 139B, which is also in this group, would leave out "(a) or", in line 5, so that one could apply only under paragraph (b). Amendment No. 147ZA would leave out the words "whether or not" from line 18 and insert "if". Amendment No. 140ZB would, at the end, insert "or". Amendment No. 140A, which is in the name of the noble Baroness, Lady Finlay of Llandaff, is also in the group. I think that that covers all the amendments in the group. I thought that I should read them out so that everyone knows exactly where we are in the latest selection.

Amendment No. 139ZAA is really a probing amendment. I have to confess to the Minister that I really do not understand subsection (4), and I look forward to her explanation. On Amendment No. 139A, however, it should be possible to vary the way in which payments are made. We are dealing here with the mechanics of payment, not with variation—to which we shall return as a big subject for debate. There would be no concern if, for example, the claimant wanted quarterly payments rather than monthly ones. That should be allowed. The intention is clearly for the courts to control such variation. Again, I am giving the Minister the opportunity of responding on the point.

Amendment No. 139B offers for consideration whether the words "whether or not" should be replaced by "if". If the court does not specify the method of payment, I am not sure that the person who is obliged to make the payment should be fixed with a method and then be in breach of the order if he varies it as long as the payments are still made and secure. I hope that that

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explains the reasoning behind the amendment. It may be advantageous if I now leave it to the Minister to explain. I beg to move.

Baroness Finlay of Llandaff: I apologise to the Committee for my earlier untimely intervention. Amendments Nos. 139A and 140A are in my name. However, I should prefer to speak to them in full later. The points have been more than adequately addressed by the noble Lord, Lord Hunt of Wirral.

Lord Bassam of Brighton: In order to assist the Committee, I think that it might be helpful if the noble Baroness spoke to the amendments now as they are in the group we are considering.

1.00 p.m.

Baroness Finlay of Llandaff: I thank the Minister for that guidance. All of my amendments relate to the proposals to introduce settlement reviews in clinical negligence cases. My concerns are on four levels: for patients themselves; about the complaints procedures which patients encounter in the NHS; for the healthcare professionals; and for the NHS itself.

When a clinical error has occurred, patients understandably and rightly feel deeply wronged. Redress is sought to cover expenses incurred in future care but also—and often much more powerfully—in an attempt to obtain justice for the tragedy that has happened. Of course no money can compensate for the phenomenal emotional and physical trauma that somebody experiences when an error has occurred.

After an error, the complaints procedure comes into play. Patients repeatedly report a block in the process. They feel that there is a brick wall when they desperately need information and an apology—but an apology is slow to come as healthcare professionals and trust management may fear that to apologise would be to admit liability. The new NHS complaints procedures have improved enormously in recent times and the open and speedy way in which issues are dealt with is long overdue.

Sometimes the trust or defence union will settle rapidly out of court to achieve closure for all concerned rather than fight a case, to avoid lengthy court procedures and the stress involved. However, if it is feared that such a settlement might be deemed an admission of guilt that can later be revisited to increase a settlement, the trend towards rapid resolution for closure will be reversed and trusts will try to avoid anything that might be construed as an admission of guilt through fear of later review.

The NHS apparently has a huge and rising bill for negligence payouts. In 2001–2002, the bill for all known and anticipated claims was 5.25 billion—a staggering increase of 850 million in the last year alone. Only five years ago, the total provision for clinical negligence was much lower, at 2.3 billion. National Audit Office accounts show that the NHS paid out 446 million to settle clinical negligence claims last year, which is 31 million more than the

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previous year. The introduction of settlement reviews can only increase that trend, unless the NHS reverses its current policy of rapid settlement.

I am grateful to the Lord Chancellor's office for corresponding with me earlier this year. Its letter outlines the intention of the Bill, which actually matches what currently happens. The medical defence unions currently fund long-term payments through buying an annuity. I understand that in practice, an annuity can be bought only from the National Farmers Union Mutual and that there is no choice in the market. The defence unions are not in a position to self fund. Their subscriptions are drawn principally from employees of the NHS, so review and variation would inevitably impact indirectly on NHS costs.

I now return to the people at the heart of this—patients and the healthcare profession. Make no mistake, when a doctor makes an error, it is devastating for that doctor. I have seen many professional colleagues feel destroyed by a complaint—even one with no grounds. I have seen colleagues haunted for life by an error. Of course the patient is more than haunted. He or she has to live day in, day out, with the outcome of an error or, worse, negligence. Patients are owed a duty of continuing care, which includes the duty to help them to rehabilitate and resume life as much as possible. The Minister and the noble Lord, Lord Hunt of Wirral, have stressed the importance of rehabilitation, so I shall refer briefly to evidence from rehabilitation programmes.

From 17 well-conducted studies in the literature on the impact of litigation on the rehabilitation process, there is consistent and powerful evidence that ongoing litigation and, independently to it, unemployment have an adverse effect on recovery. For patients to achieve closure on episodes seem crucial to their future quality of life. I am not saying that settlements should not occur. I certainly welcome the implication of the introduction of periodical settlements—but leaving settlements open to review may mean that patients cannot complete the grieving process that will and must occur. They cannot have closure.

The NHS might come to fear that admission of fault may leave the way open to future, unquantifiable review claims—making the early stages worse for patients. The NHS cannot afford the open-ended nature of such reviews. Most of all, the victims—the patients—will be unable to rehabilitate because any long-term improvement may work against a future claim review. Patients will be encouraged to be locked into to an acute psychological state and never achieve closure in their lifetime. It is well documented that the individual's psychological state has a huge impact on physical recovery. I beg to move.

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