Select Committee on Delegated Powers and Regulatory Reform Twenty-Fourth Report


193.  The arrangements for recovering NHS costs set out in this Part are closely modelled on those contained in the Road Traffic (NHS Charges) Act 1999 ("the 1999 Act"). The intention is to extend the 1999 Act scheme to cover most cases where personal injury compensation has been paid, rather than only those relating to road traffic accidents. Consequently, many of the delegated powers in this Part follow the division in the 1999 Act between primary and secondary legislation. Whilst there may, on the face of it, seem to be a substantial number of delegated powers in this part, these are generally concerned either with the detailed and technical administration of the scheme or with arrangements for review and appeal. They are likely to lead, as with the 1999 Act, to two sets of regulations for England and the equivalent for Scotland.

194.  All regulations made under the delegated powers in this Part of the Bill will be subject to the negative resolution procedure. This is on the basis that they are concerned with detailed administrative and technical issues relating to the costs recovery scheme. Five of the powers[3] allow for modification of the primary legislation. However, as is clear from the paragraphs below, these do not, in the view of the Department, involve matters of principle which might be more appropriate for the affirmative procedure. Rather, they are necessary either to take account of changes of circumstances - for example, variation of the schemes referred to in Schedule 10 (clause 146) or abolition of bodies responsible for hospitals (clause 158) - or to provide for the detailed application of the scheme in particular technical situations - for example apportionment (clause 149), structured settlements or payments into court (clause 159).

Clause 146 and Schedule 10: Liability to pay NHS charges

195.  Clause 146 sets out the circumstances in which NHS costs can be recovered. Subsections (1) and (2) provide that any person who makes a compensation payment as a result of an injury will also be liable to pay NHS charges in respect of treatment for the injury received by the injured person at an health service hospital and/or in respect of the provision of NHS ambulance services.

196.  Subsection (3) defines compensation payment. The definition is a broad one which covers payments made by the person liable for the injury or by his representative such as an insurance company or the Financial Services Compensation Scheme[4]. Subsection (3) also introduces Schedule 10, which lists a number of payments which are not to be counted as compensation payments. These include compensation orders made by the criminal courts, payments under the Fatal Accidents Acts 1976 or its Scottish equivalent and payments made by trusts prescribed in regulations. The intention is that this latter might include trusts such as those that are set up to compensate haemophiliacs infected with HIV from blood products.

197.  Subsection (9) creates a delegated power to amend Schedule 10 by omitting or modifying any payment listed in it. Paragraphs 3 and 8 of Schedule 10 give powers to prescribe by regulations exempted trusts and other payments respectively which are not to count as compensation payments.

198.  It is envisaged that these powers might be needed to prescribe, for example, new schemes which might from time to time be established. The power in paragraph 3 of Schedule 10 is tied to a class of case which is stated in the primary legislation and which may be subject to more frequent change than can reasonably be dealt with in primary legislation. Similarly the power to modify or omit items in Schedule 10 is intended to permit flexibility in responding to changing circumstances. In all cases the aim of using delegated powers is to avoid the rigidity of approach that would be caused by relying on primary legislation.

Clause 147: Applications for certificates of NHS charges

199.  Clause 147 deals with applications for certificates, setting out the circumstances in which a person may apply for a certificate, and those in which he must do so. It also sets out the obligations of the Secretary of State and the Scottish Ministers to issue certificates once an application has been made. The provisions in this clause closely mirror those in section 2 of the 1999 Act. Subsections (7) and (8) require a compensator to apply for a certificate if, at the time of making a compensation payment, he has not already been issued with a certificate or a previously issued certificate has expired. These obligations do not arise if the compensator has applied for a certificate within a period before making payment prescribed in regulations under subsection (8)(b). Subsection (9) creates a power to prescribe by regulations the manner and timing of applications for certificates.

200.  These arrangements are purely administrative matters, and it seems more appropriate that they should be dealt with in secondary legislation rather than appearing on the face of the Bill. This again reflects the approach taken in the 1999 Act.

Clause 148: Section 147: Supplementary

201.  This clause contains no delegated powers.

Clause 149: Information contained in certificates

202.  Clause 149 deals with the information to be included in certificates. Subsections (1) and (2) provide that the certificate must state the amount or amounts, determined in accordance with regulations, that the compensator must pay in NHS charges. Subsection (3) provides for a finding of contributory negligence made by a court or recorded in an agreed judgement to be taken into account when calculating the amount of NHS charges due, whether the finding or recorded judgement was made under UK law or under the law of another country which seems to the Secretary of State or the Scottish Ministers to correspond to the appropriate UK law. Subsection (5) sets out particular matters which may be covered by regulations. These include a cap on the overall amount payable (subsection (5)(a)); different amounts for different circumstances - for example out-patient or in-patient treatment and/or ambulance services - and for different areas (subsection (5)(b)); provision for cases where a person receives treatment at more than one hospital (subsection (5)(c)); and provision for apportionment of liability for NHS costs in cases where there is more than one person paying compensation to the same injured person (subsection (5)(e)). All these circumstances reflect existing arrangements in the 1999 Act. In relation to subsection (5)(e), however, it will also be possible for regulations to modify the primary legislation. This is to allow for the possibility that a formal apportionment scheme, which does not currently exist, may be established at some point in the future. If this were the case, the legislation (which currently operates on the basis of joint and several liability) would need to be modified to make clear the basis of each compensator's liability under the costs recovery scheme.

203.  Under subsection (5)(f) regulations can deal with cases where a fresh certificate is issued or a certificate revoked as a result of a review or appeal. Subsection (5)(g) allows regulations to deal with the situation where a person has received treatment and/or ambulance services in both England/Wales and in Scotland, by allowing liability under the English scheme to be reduced in recognition of liability in respect of the same injury arising under the Scottish scheme and vice versa. Thus a compensator will not be penalised just because a person's treatment has taken place in two separate parts of Great Britain.

204.  Subsection (9) provides for regulations to specify the information that a compensator can, on receipt of a certificate of charges, request from the authority as to how it has arrived at the amount specified. Again, this mirrors exactly provisions in Section 3(6) of the 1999 Act.

205.  All these provisions are concerned with administrative matters relating to the operation of the scheme that may well need to be modified from time to time. Thus it seems more appropriate for them to be dealt with by regulations rather than appearing on the face of the Bill.

Clause 150: Payment of NHS charges

206.  This clause contains no delegated powers.

Clause 151: Recovery of NHS charges

207.  This clause contains no delegated powers.

Clause 152: Review of certificates

208.  Clause 152 provides for internal review of certificates. Subsection (1) requires the authority to review a certificate if, after it had been issued, there is a finding of contributory negligence made by a court or recorded in an agreed judgement, as outlined in paragraph 201 above. Subsection (1) also gives a power to prescribe in regulations the manner in which persons must notify the Secretary of State or Scottish Ministers of any such judgement or order.

209.  Subsection (3) gives powers to prescribe in regulations the periods and circumstances of reviews. This provision mirrors that in section 6(1) of the 1999 Act.

210.  All these powers relate to the detailed administration of the scheme and are, in the Department's view, therefore best suited to secondary legislation.

Clause 153: Appeal against a certificate or a waiver decision

211.  Clauses 153 to 155 provide for appeals against certificates of charges to an independent body. Clause 153 sets out the circumstances in which an appeal may be made, including that no appeal may be made until the claim to which the compensation payment relates has finally been disposed of and the amounts set out in the certificate have been paid. Subsection (4) enables compensators to make an application for the requirement to pay the charges before making an appeal to be waived. Subsection (5) provides that the Secretary of State or the Scottish Ministers can only grant such a waiver if it appears that payment of the charges would cause exceptional financial hardship. Subsection (6) allows compensators to appeal against a decision not to grant a waiver through the same procedure as for appeals against a certificate. Subsection (7) provides for regulations to be made as to the timing, manner and procedure for appeals and for enabling appeals against a certificate to be treated as a review. With the exception of the waiver provisions, these provisions reflect almost in their entirety the provisions contained in section 7 of the 1999 Act, and the regulation-making powers in subsection (7) relate to matters of scheme administration that it would seem inappropriate to include on the face of the Bill.

Clause 154: Appeal Tribunals

212.  Clause 154 contains no delegated powers per se, but does allow for regulations under clause 153 to provide for the non-disclosure of medical advice or medical evidence given or submitted following referral of a case to an appeal tribunal. This might be appropriate, for example, in cases where it was thought that disclosure of such evidence to the injured person or their representative might be harmful to the person's health. This reflects section 8(5) of the 1999 Act.

Clause 155: Appeal to Social Security Commissioner

213.  This clause contains no delegated powers.

Clause 156: Provision of information

214.  The system for recovery of NHS charges is reliant upon information being exchanged by the various parties involved in the chain of events from accident to payment of compensation. Clause 156 sets out the persons who are required to provide information, and allows for the making of regulations to prescribe the type of information required (which may include information about NHS treatment received), and the timing and manner of providing it. As with most of the other delegated powers in this Part of the Bill, this reflects powers already in place in section 11 of the 1999 Act. Again, these are largely administrative matters over which some flexibility is needed to take account of changing circumstances and which therefore seem better suited to secondary legislation.

Clause 157: Use of information held by the Secretary of State or the Scottish Ministers, etc

215.   This clause contains no delegated powers.

Clause 158: Payment of NHS charges to hospitals or ambulance trusts

216.  Clause 158 places an obligation on the Secretary of State and the Scottish Ministers to pay any monies recovered to the appropriate NHS bodies, unless they have been identified as overpayments. Subsection (3) allows for regulations to provide for the manner and timing of onward payments, and for dealing with situations where the hospital or ambulance trust in question has ceased to exist, including modifying the primary legislation. Such modification is necessary to allow payments to be made to a different body from the one envisaged by subsection (1). These powers mirror (with the addition of ambulance trusts into the wording) those in section 13(4) of the 1999 Act. These are, again, administrative matters which seem to the Department best left to secondary legislation.

Clause 159: Regulations governing lump sums, periodical payments, etc

217.  Clause 159 allows for regulations to be made as to the application of the scheme to particular types of payments which may be made in personal injury cases, including provision modifying the primary legislation. These are multiple payments, structured settlements and interim payments. In the case of structured settlements, it is envisaged that regulations might allow for the settlement agreement to count as a single payment of compensation and for no further liability in respect of NHS costs to arise when payments are made in accordance with the agreement. This would require modification in such cases of the definition of "compensation payment" in clause 146(3). In the case of interim payments of damages which are ordered to be repaid by a court, it is envisaged that regulations might provide for repayment to the compensator of any payment of NHS costs made as a result of the interim payment.

218.  Subsection (3) enables regulations to be made to deal with the particular situation of payments into court and the circumstances in which such payments - which are made to the court rather than to the injured person - are to count as compensation payments. It permits regulations to modify the legislation as it applies in such cases - for example by amending the period within which a compensator must apply for a certificate of charges under clause 148, or what counts as the settlement date in these cases under clause 150.

219.  Again, the delegated powers in this clause largely reflect powers contained in section 14 of the 1999 Act. The matters concerned are highly detailed and technical in nature and, in the view of the Department, therefore more appropriate for secondary legislation.

Clause 160: Liability of insurers

220.  Clause 160 provides that where an insurance policy covers, to any extent, a compensation payment made by an insured person in consequence of an injury, that policy will also cover any NHS costs for which the insured person is liable in respect of that injury and that this cover cannot be restricted or excluded. It is intended to ensure that insurers meet liabilities under the scheme and do not just leave them to be picked up by policyholders. Subsection (4) enables regulations to be made limiting an insurer's liability in circumstances set out in the regulations. It is envisaged that this might be appropriate, for example, to enable a reduction in the NHS costs payable in cases where an insurer has only covered a proportion of the total compensation due as a result of a cap on the amount payable under the insurance policy. This power was not necessary under the 1999 Act which was concerned only with cases covered by compulsory motor insurance or its equivalent. It reflects the fact that all kinds of personal injury will now be included in the scheme regardless of the insurance position, and that they may be covered by different types of insurance rather than only those specified in section 1(3)(a) of the 1999 Act. This is a technical insurance issue which may be subject to change in the light of changing practice within the insurance industry and is therefore thought more appropriate for secondary legislation.

Clause 161: Power to apply part 3 to treatment at non-health service hospitals

221.  Clause 161 enables regulations to be made extending the scheme for recovery of NHS costs to cases in which treatment has been provided at a non-health service hospital under an arrangement with one of the NHS bodies listed in subsection (3)(b) and in which an injured person has been provided with ambulance services to take him to such a hospital for treatment. This would cover, for example, treatment at private or voluntary hospitals paid for by the NHS. The regulations would cover such issues as the bodies who would receive any payments recovered under the extended scheme. Subsection (2) excludes from any such extension treatment which, had it taken place at an NHS hospital, would have been private treatment or treatment under arrangements for primary dental services or general or personal medical or dental services. This mirrors the exclusions from the main scheme set out in clause 146(5).

222.  Nowadays, the NHS is actively encouraged to work in partnership with other health care providers to provide quick effective treatment for its patients. It is increasingly common for NHS trusts to enter into arrangements with non-NHS providers for the provision of treatment and services to patients who remain, at all times, NHS patients funded by NHS money. The provisions of this clause recognise the reality of this situation, and allow the scheme to keep up with the different ways in which NHS treatment might increasingly be delivered in future. The extension of the scheme to non-NHS hospitals is likely to raise different administrative issues as well as to which body - the private hospital or the NHS commissioner - should receive the money received under the scheme. Given the need for further discussion and the comparatively low level of current use of non-NHS hospitals for treatment of injuries, the Department is not ready to extend the scheme beyond NHS hospitals at this stage. Since such an extension will involve largely technical and administrative matters rather than issues of principle, it was however thought appropriate to provide for it in later secondary legislation.

Clause 162: The Crown

223.  This clause contains no delegated powers.

Clause 163: Regulations

224.  This clause contains no delegated powers, but does set out by whom such powers in this Part are to be exercisable.

Clause 164: Interpretation of Part 3

Clause 165: Consequential and minor repeals

225.  These clauses contain no delegated powers.

3   Clauses 141(9), 144(5), 153(3), 154(1) and 154(3). Back

4   The Financial Services Compensation Scheme is a scheme set up under the Financial Services and Markets Act 2000 to provide compensation when the insurance company cannot, for example because the business has failed. Back

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