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Baroness Ashton of Upholland: I could not agree more with the noble Lord, Lord Hunt, that it is really important for us to ensure that we recognise the implications here for all bodies, whether they are public or privatehere I acknowledge what the noble Earl has saidwhen having to deal with frivolous or spurious claims that require resources to be put at their disposal in order to sort them out. That is particularly pertinent to the work of the ministerial group on local government. However, that does not mean that I do not take seriously his point about the private sector. Moreover, the voluntary sector is also critical.
When talking to local government colleaguesI work with the ODPMit is clear that two things need to be done. The first is to support organisations, and public authorities in particular, to ensure that they have the information they requiredare I use the word "guidelines" here?to enable them to feel confident about tackling these questions and thus not give in to such claims. I know from talking to organisations in the private sector that reputation starts to play a part and it is easier for a claim to be got rid of than to worry about the publicity that might follow, and so on. So I am very interested in trying to persuade all our organisations to fight the cases that they need to fight and to recognise the ones where they need to think otherwise. That is how we want to approach the matter.
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I am delighted that the noble Lord has raised this important question. One of the great contributions to the conference held on 17 NovemberI do not think that the noble Lord was able to be there for this part because I know that he was involved in a pensions Bill in your Lordships' Housewas that of Knowsley Council. That was a very interesting case of a local authority which had managed to reduce its claims in one year from 1,700 to 250 and saved £1.7 million in the previous 12 months.
I do not have an aggregate figure for how much local authorities spend, but there was one example. It gave a very good description of the kinds of things it had done. It fought claims and it tried to ensure that claims were valid. I think that from one cul-de-sac of six houses there were 12 claims. They were people who were witnesses in one, claimants in another and so on. Knowsley tackled what was becoming a culture of claiming very positively. It involved the police service in doing so. It worked very hard with its housing repair department to make sure that it was doing things very quickly to prevent claims coming in. It had a wonderful and very dramatic effect.
I cite that case because it was a great example to me of how it had done it without us, but, my goodness, if we put some weight behind the work it is doing, I think we could make a real contribution. That is my ambition for some of the work that goes on outside. So I am very grateful because the amendment has given me the chance to talk about an area of work that is not covered by the Bill. I could not agree more: it is very important. I return to the Historical Houses Association. We are working with organisations which can help get to their members and say, "We will support you in trying to make sure that you accept claims that are real, and that you absolutely do not give in to claims that are not. Here is lots of information and advice on how other people have tackled this to very good effect". I am very keen to do that.
The difficulty with the amendmentsthe "policy defence" is the term that the Australians have used for thisis that people make decisions on public authority spending. I understand that the courts will be mindful of that in looking at the issues. If you are a member of the public or involved in an activity, it is difficult to know what decisions have been made. I do not think we can exclude that decision-making process from the process that courts can examine. In other words, the fact that you have made a decision in an appropriate manner but you have not done a particular thingrepaired a fence or whateversomehow lets you off.
I am reluctant to go down this route because it does not take us where we want to goor, indeed, where the noble Lord wants us to go. I could not agree more with the premise that underlies this: that we need to ensure that all bodies, including our public bodies, involved in the provision especially but not exclusively of activities for young people, and people generally, understand the support that we want to give them to ensure that
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they reject spurious claims and bring spending resources under control. That is for the very reason given by the noble Lord, Lord Hunt, which is that that is a waste of public money, a waste of anyone's money, which could be much better used to support other activities. I could not agree more with that premise.
Viscount Eccles: I add to what the Minister has said. I absolutely agree that sometimes the easy thingI think that was her wordis just to accept and settle. I suspect that that is negligent at some point. There is an intermediate state, which is a business decision.
UnquestionablyI am sure that we shall come to this againthere are many occasions when it is much cheaper to settle than to fight to the death. Certainly it is much cheaper to settle than to go to court on many occasions. Yes, there are people who do not know that they should be defending themselves and more information should be given them to explain to them how they can defend themselves. I thoroughly approve of that. At the same time, we must think very carefully about the cost. At what point do people make a business decision? It is not a matter of who is right or who is wrong. They might decide that something could be settled for £1,500 which, if the matter went to court, could not possibly cost less than £5,000. That is a much more important influence than this debate has so far led us to realise.
Baroness Ashton of Upholland: I completely understand what the noble Lord saysI completely accept that such decisions are made. I used the example of reputational issues. It is another factor that people are concerned that their reputation does not suffer, and it is easier to pay up than be seen to have had a claim against them.
In the work that I am undertaking I seek to take a step back from that and the actions of those who say, "If you put in spurious claims, we will take this all the way through". We have had a couple of cases recently when people have ended up going to prison because of making bogus claims. So we can deter people completely from doing that. What was interesting about Knowsley and the reduction of cases was that the word went out that it was not worth making a claim because you were not going to get anywhere. That was why the drop from 1,700 to 250 was so dramatic. I accept that in a sense, in a local authority area, there is a captive audience of people and you can do something in one big push; it was resource-intensive at the time, but it paid off handsomely. It is much more difficult if you are an individual organisation or business.
I hope that through the steering groupworking with DTI colleagues, who are also part of the groupwe will set the tone. We need to get the message across so that people do not get claims that they should not, while recognising that, as the noble Viscount rightly said, you make a business decision at the end of the day as to what is most cost-effective in money and time. We
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want to prevent people even from having to get to the point of making that decision when the claim is not valid.
Viscount Eccles: I offer the Minister one more example. In a foundry in the west midlands the annual wage increase was 1 per cent less than the management had first envisaged because of the number of industrial injury claims that had been put in in the previous year. We battled it out with the representatives of the workers in the foundry and it was acceptedand, of course, the claims fell. As in that case, the difficulty is often a business decision, because your insurer is always extremely keen that you should settle, if it is a matter of a squashed thumb or bruised shoulder. From the point of view of the insurance company, the business decision is to settle and not to fight to the end.
The Earl of Erroll: There has been a lot of discussion about fighting things, but the new clause is about the courts being able to determine whether the organisation has taken appropriate steps. It is about being allowed to look at the economics of whether the organisation has put in more protection and have spent money on that, and whether it has taken enough care within the limit of its budget, or the money available. The same would apply to the public coming to visit. Are the courts allowed to take into account that it would have cost a fortune to prevent something by putting up a very expensive barrier, or something like that, or is it an absolute? Are the courts allowed to take into account the economic balance between how much it would cost against a notional occurrence and that the organisation perhaps got it wrong, because something happened that it hoped would not happen?
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