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Earl Howe: My Lords, I thank the Minister for his reply. I am, of course, a little disappointed with his reaction to Amendment No. 12. It seems to me that government Amendment No. 36, although very welcome in itself, provides for a process that is a little impersonal and after the event, if I can put it that way. We all subscribe to the aspiration that there will be a culture of learning instilled into the NHS by virtue of this scheme. There is no argument between us on that. However, I thought that there was merit in the suggestion that where appropriate—I underline the words "where appropriate"—the patient himself should receive, as soon as possible after the investigation, a short personalised report indicating what action had been taken in the hospital for the benefit of future patients. While the noble Lord is right to say that that would not be applicable in every case, the Government's Amendment No. 14, which we have just debated, would allow for exceptions to be made in appropriate circumstances, so I would not have thought that the reasons that the Minister gave were necessarily all that compelling. Nevertheless, I note that he is resistant to this idea and I will not press it. However, this has been a useful debate. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Warner moved Amendments Nos. 13 and 14:

( ) the giving of an apology,"
Page 2, leave out line 27 and insert "but may specify circumstances in which one or more of those forms of redress is not required."

On Question, amendments agreed to.

The Deputy Speaker (Lord Boston of Faversham): My Lords, in calling Amendment No. 15, and in view of the groupings, I point out to your Lordships at this stage that if Amendment No. 16 is agreed to, I cannot call Amendment No. 17.

Earl Howe moved Amendment No. 15:

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The noble Earl said: My Lords, in moving Amendment No. 15, I shall speak also to Amendment No. 17. The Minister has told us that the intention for the NHS redress scheme is that it should not compensate people at a lesser level than they would have been compensated at if they had pursued their remedies through civil litigation. If the Government really mean that, it is illogical for them to reserve the statutory right to set upper limits of financial compensation. The amount of compensation offered should be assessed on the basis of the actual loss, plus damage sustained, as well as pain and suffering, just as it would be in a case that was litigated. That principle applies not only to the overall amount of compensation but to any individual head of claim.

I fully acknowledge that the scheme is intended to address those claims that fall into the lower end of the value range. The Minister, in his letter of 18 January, helpfully explained that it is in cases where the award of damages is relatively low—£20,000 or below—that legal costs are disproportionately high. I would not wish to argue that point in the slightest. The rationale for setting an upper limit is, according to the Government, that it will enable a swift response to be given to the more straightforward and lower value cases.

My answer to that is that there is a difference between trying to set an upper ceiling on the size of claims intended to be dealt with by the scheme and the desirability of sticking rigidly to that upper ceiling if, during an investigation, it becomes apparent that the claim is worth more than the amount of the ceiling chosen. If a claim is found to be worth slightly more than £20,000 it would seem ridiculous to miss the opportunity to resolve that claim for that rather bureaucratic reason. If that were to happen, there is only one realistic option for the patient, which is to incur the expense and the additional stress of going to court. That is in no one's interests, and it argues for some flexibility to be built into the nominal upper limit.

In his letter, the Minister expressed the view that there would not be any advantage to the NHSLA knowingly offering less compensation than would be received through the courts because, following legal advice, the offer would be rejected and renegotiated. If the offer were at or near £20,000, and the patient's legal advice was that it ought to be worth more, the patient might nevertheless be persuaded to take a pragmatic view and accept the offer, because not to do so would incur untold additional anxiety and delay. The existence of a strictly enforced upper ceiling on claims points up very graphically the trade-off at play in the scheme between ease of operation and natural justice. I would like to persuade the Minister—although I know that I will not—that in this sense as in a number of others natural justice is a regrettable casualty of this scheme and that we should therefore do all we can to minimise its loss. One way to do that, in my respectful view, would be to abandon the idea of a strict upper limit on total settlements and on individual heads of claim. At the margin, fixed
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financial ceilings will distort decision making and deny patients the full extent of the redress that they would otherwise have received. I beg to move.

4.30 pm

Lord Warner : My Lords, it is intended that the redress scheme will provide for financial compensation to be offered, and Clause 3(4) sets out some of the parameters of such financial compensation. It allows the scheme to specify upper financial limits for compensation. As drafted, this may be an upper limit on the total amount of financial compensation that may be included in an offer under the scheme, or an upper limit on the amount of financial compensation that may be included in an offer in respect of a particular matter, or both of these. If no total upper limit is specified then an upper limit on compensation for pain and suffering must be specified.

That is the starting point. It is our stated intention that financial compensation offered under the scheme will be broadly equivalent to the level of compensation that would be provided in a successful claim before a court. The noble Earl, Lord Howe, acknowledged that as one of the considerations that would be taken into account by the NHS Litigation Authority in making an offer.

In Committee, a number of noble Lords raised concerns that patients might not receive financial payments equivalent to those they might expect from the courts. Concerns were also raised that if limits were imposed on particular elements of a claim, more people would be driven to the courts rather than encouraged to use the scheme. As I stated in Committee, it is not currently intended to use the power in Clause 3(4)(d) which allows upper limits on individual heads of damages. We do not intend to impose caps on the level of special damages that may be offered under the scheme. I said I was willing to consider removing it.

Amendment No. 16 removes the power in Clause 3(4)(d) to specify an upper limit in respect of individual heads of damages, other than a single overall upper limit in respect of damages for pain and suffering. The effect of the amendment would be to allow the scheme to provide either for an overall upper financial limit, or an upper limit on the amount of damages for pain and suffering only.

This amendment will prevent the scheme from providing for a double cap. It will not be possible to have an overall cap on the total amount of financial compensation and a second cap on the amount that may be offered in respect of a particular matter. The scheme will not be able to specify any other limit on what may be included in an offer of financial compensation. No caps on special damages will be possible. The intention is that the scheme will provide for offers of financial compensation to be broadly equivalent to the level of compensation that would be provided in a successful claim before a court.

I remain aware of noble Lords' concerns over the appropriateness of setting an upper financial limit for claims under the redress scheme. I understand the
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arguments that the noble Earl, Lord Howe, has offered on Amendments Nos. 15 and 17, which would remove the power for the scheme to set any upper financial limit. I was very pleased that his expectations of my response were extremely low. I do not wish to disappoint him. However, we believe it is vital to the successful operation of the scheme that such a limit is set. Concentrating on the lower-value claims will do the most to reduce disproportionate legal costs.

I remind noble Lords that we arrived at the figure of £20,000 as the upper limit on the amount of financial compensation that may be included in an offer under the scheme after examining existing legal claims. The number of low-value cases settled by the NHS Litigation Authority in 2002–03 and 2003–04 was 4,090 and 5,690 cases respectively. That shows that legal costs in those cases were disproportionately high for cases where the level of settlement was up to £20,000. Cases settled where the award of damages was above £20,000 show a significant reduction in the proportion of legal costs to damages. That is why we settled on the £20,000 limit.

Setting an upper limit supports the scheme's aim of offering a swift response to the more straightforward and therefore lower-value cases and allows scheme resources to be focused on cases where such an approach would be of most benefit to patients. It is felt that complex cases should continue to be dealt with outside the scheme. As I have stated, it is intended that offers made under the scheme will be broadly equivalent to an offer made under a successful claim before a court. Where a case is felt to fall just above the £20,000 threshold, it may be appropriate for that case to be referred to the Clinical Negligence Scheme for Trusts, and resolved outside the scheme.

We have undertaken to review the working of the scheme after three years, with a view to considering whether it would be appropriate to order the limit, or apply a limit on the pain and suffering element only. We have not ruled out change, but we must start somewhere. It is most appropriate to start with the ceiling of £20,000. Because provision is made to settle that limit in secondary legislation, it will be easy to adjust that limit without coming back to Parliament for amendment to primary legislation. That is why we disagree with the noble Earl, Lord Howe, although I acknowledge the eloquence with which he advocated his case.

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