Civil Liability Bill [HL]

Debate between Lord Marks of Henley-on-Thames and Lord Hunt of Wirral

3rd reading (Hansard): House of Lords
Wednesday 27th June 2018 Lords Chamber

[Lord Hunt of Wirral (Con)]

My Lords, I congratulate my noble and learned friend on his expert handling of this Bill, together with his ministerial team, my noble friend Lady Vere, and their officials.

Part 1 has indeed proved to be more contentious than many of us expected, but I hope that all noble Lords have now recognised the true and serious nature of the problem that the Government need to tackle and also accept that the radical solution of a tariff is thoroughly justified. The social evil that we have discussed on many occasions, which this part is intended to address, will not completely evaporate as a result of these measures. There are too many vested interests at work for the compensation culture to vanish overnight. No doubt they will continue to set citizen against citizen and are already crafting new ways around any controls that we seek to impose. None the less, I feel that this Bill will certainly slow down the process and, I hope, end this great country being known as the whiplash capital of the world.

On Part 2, I am delighted at the consensus across the House that time is very much of the essence, as we lawyers would say. The overwhelming view of this House has been that change to the discount rate cannot come soon enough. I congratulate my noble and learned friend the Minister and noble Lords on all sides of this House who have all worked so hard to eliminate the scope for delays in reaching a first review.

[Lord Marks of Henley-on-Thames]

My Lords, on behalf of these Benches, I add my thanks to the noble and learned Lord the Minister and to the noble Baroness, Lady Vere, for their help, courtesy and consideration throughout the passage of this Bill. We have all approached the Bill with common purposes; on some of the issues, we have suggested different ways of achieving those purposes. With co-operation from Members across the House, in the Conservative Party and on the Labour and Cross Benches, we have produced a set of amendments that have now improved the Bill significantly as it goes to the Commons. If I may say so, it has been a model of co-operation. We are very grateful to the noble and learned Lord for the many meetings that he has held at which he has explained the Government’s thinking and listened to us, and for the letters that he sent us explaining their thinking and, sometimes, changes in thinking. Thank you.

Criminal Justice and Courts Bill

Debate between Lord Marks of Henley-on-Thames and Lord Hunt of Wirral

Wednesday 23rd July 2014 Lords Chamber

[Lord Hunt of Wirral (Con)]

My Lords, I declare my interest as a practising solicitor and partner in the international law firm DAC Beachcroft and as chairman of the British Insurance Brokers’ Association, and I have other interests recorded in the register.

The “have a go” culture has infected our civil compensation system for far too long. Claimants—and it is always claimants—see that there is no real penalty for trying on either that they have been injured at all or a deliberate exaggeration of the symptoms that they have suffered. The advertising by claims farmers and solicitors has undoubtedly played a part in this. The adverts for personal injury and for financial mis-selling continue to give the impression of free money. The starkest example that I can immediately recall was a full-page advert last November showing simply a bundle of £50 notes done up in Christmas ribbon. We all recall those original adverts saying, “Where there’s blame, there’s a claim, and it won’t cost you a penny”.

That is why I welcome Clause 45 as part of the Government’s initiative to tackle this. I certainly support its introduction. Measures are, of course, already available to tackle the completely fabricated claim, but I fully support the idea that a claimant with a genuine claim who then dishonestly exaggerates it should put their whole case at risk. That, after all, is what would happen if one was unwise enough to put in a consciously exaggerated claim to one’s own insurance company. Why should it be any different if one proceeds with the same intent against another person’s insurance company?

I would like to hear more from the Minister on the choice of the phrase, “fundamentally dishonest”. I recognise that my noble friend has great experience of the English language, and I should declare an interest as having been for six years chairman of the English-Speaking Union, but, with due respect for his grasp of the English language, it seems to me that dishonesty is one of those absolute concepts: either you are dishonest or you are not, in the same way that you cannot refer to something as “very unique” or to someone as “slightly pregnant”. I know that a similar phrase was used in the Civil Procedure Rules following the seminal—perhaps I should now call it the “fundamentally seminal”—review by Lord Justice Jackson of civil legal costs, but I am not aware that it has been tested or scrutinised by the Appeal Courts as yet. I would welcome clarification from the Minister about the thinking behind the choice of this phrase.

I have received, no doubt like other noble Lords, material from those representing claimant personal injury lawyers who have expressed concern that this measure might go too far. I cannot agree with that. If a claim is brought which contains a dishonest element—and dishonest always means that there is proof of a deliberate intent to deceive—then that behaviour should rightly put the whole claim at risk. The effect of this clause is clearly a deterrent one which, as I have already explained, I strongly welcome.

It might be helpful to point out to noble Lords that Clause 45 is not unique—not even slightly unique—because an analogous provision can be found in Ireland, in Section 26 of its Civil Liability and Courts Act 2004. There, any plaintiff, as they are still called in Ireland, who knowingly gives false or misleading evidence will find their claim dismissed in total. The test is simply one of dishonesty rather than fundamental dishonesty. If there is a fear that the power in Clause 45 would be abused by overzealous defendants, the experience of more than 10 years in Ireland proves otherwise: the courts are alert to any attempts to abuse a provision that is expected to apply in only a small number of cases, and of course if the clause truly has a deterrent effect, it should mean fewer cases coming to court in the first place.

Let me finish by illustrating the concern over “fundamentally dishonest” with a stark example that was recently brought to my attention. It was a case tried in Stoke-on-Trent County Court earlier this year. Mr Steven Cotton is a 31 year-old heating engineer who now lives in Swadlincote, Derbyshire. In December 2008, he sustained an injury to his neck and shoulder while at work. It was frankly a modest injury and he was able to go back to work the following month, in January 2009, before a disciplinary matter at work intervened. At that point, he decided to bring a claim against his employers and to include in that claim an allegation of a lower-back injury. Matters progressed and, just a few months before trial, he put in a claim schedule for in excess of £1 million, despite his solicitors, Woolliscrofts in Stoke, being aware of video surveillance evidence showing Mr Cotton as being much less disabled than he was making out. I understand that the insurers facing this claim, AXA Insurance, were not impressed. They rightly defended the case to trial and the judge agreed that Mr Cotton had invented the lower-back injury as a deliberate exaggeration of his genuine neck and shoulder injury. The judge awarded Mr Cotton just over £18,000 for the genuine injury, which was less than 2% of the amount that he had falsely claimed, plus some of his solicitor’s costs. One might think that this degree of exaggeration would be enough to knock out the entire claim but, sadly, it was not so. On the one hand, Mr Cotton’s case is a classic example of why the clause is badly needed. On the other hand, it raises a question in my mind as to whether the addition of a second injury to an already genuine injury would be seen by the courts as fundamentally dishonest. The court in Stoke stopped short of declaring that Mr Cotton’s lower back injury was not a genuine medical condition, despite the surveillance evidence. I have a real fear that Mr Cotton might still be awarded damages after the new clause comes in when all right-thinking people would agree that someone whose claim had already been knocked out to the extent of 98% not being allowed should not receive a penny.

I turn to the second amendment in my name: Amendment 63FE. To me, the meaning of subsection (5) of Clause 45 is unclear. Subsections (2) and (4), for example, impose obligations on the court to follow a particular line of conduct by use of the word “must”. In contrast, subsection (5) is different in tone and appears to offer more leeway. I hate once again to split linguistic hairs with the Minister, but I would like some clarification on whether subsection (5) is really intended to be a discretionary “may”. I reassure noble Lords that there is some substance behind the point I seek to make. Subsection (5) appears to limit the legal costs consequences of a claim being dismissed in its entirety under the clause by restricting the costs award that could be made to the defendant to a sum net of the damages that would have been awarded to the claimant if he had pursued an honest claim. I wonder whether there is even a risk that subsection (5) simply undoes the good work of the rest of the clause. The dishonest claimant who is found out ends up paying his opponent’s cost but is able to offset the money he has forfeited by his dishonesty. To return to the example of Mr Cotton, he would still, in effect, get credit for the £18,000 awarded for his genuine injury. Does that not encourage the likes of Mr Cotton to have a go at the expense of insurers, which is where I was when I started? I beg to move.

[Lord Marks of Henley-on-Thames]

My Lords, I rise to speak to Amendments 63FDA to 63FFA. I do so with some diffidence because, in part, I disagree with my noble friend Lord Hunt. After the humorous and intelligent way in which he introduced his amendment, and given that I agree with a great deal of the sentiment he expresses, I am concerned about the extent to which I disagree with him.

I agree with my noble friend that there has been a culture of “going for it”. There has been an outbreak of “compensation-itis” that we no doubt acquired, in part, from the United States and which has bitten particularly deep into the culture of people who have had motoring accidents. I greatly agree that something needs to be done. The question is whether the clause does what needs to be done in the way it needs to be done.

As my noble friend explained, Clause 45 deals with claims for damages in personal injury cases where the claimant is guilty of fundamental dishonesty in the prosecution of his claim. Clause 45(2) provides that,

“The court must dismiss the primary claim”—

that is, the claim for damages—

“unless it is satisfied that the claimant would suffer substantial injustice if the claim were dismissed”.

The question I seek to pose is how far subsection (2) would leave judges free to do justice.

In my view, the subsection works against the interests of justice, or certainly risks doing so, in two ways. The first is by imposing a presumption in favour of dismissal, subject to a modest saving provision that, frankly, is difficult to understand. I am not sure I agree with my noble friend Lord Hunt that the word “fundamentally” adds nothing, but I certainly am of the view that the saving subsection,

“unless it is satisfied that the claimant would suffer substantial injustice if the claim were dismissed”,

is very difficult to understand. On one view of justice, and the view of justice which appears to be intended by the proponents of the clause, if there is dishonesty, it is not unjust for the whole claim to go. If that is the meaning, how does the saving provision come in at all? If, on the other hand, it means that the interests of justice seem broadly to require the claimant still to get some of his damages, does that amount to a duty to dismiss or is it merely a power to dismiss, which is what my amendments are directed to?