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Damages for whiplash injuries

Part of Civil Liability Bill [Lords] – in the House of Commons at 5:15 pm on 23rd October 2018.

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Photo of Rory Stewart Rory Stewart The Minister of State, Ministry of Justice 5:15 pm, 23rd October 2018

Absolutely. This is a concession that we have inserted into the Bill partly due to pressure from my hon. Friend, the Chairman of the Justice Committee, and from other Members, including my hon. Friend Mary Robinson. It means that the Lord Chancellor, when reflecting on the nature of the tariff in a judicial capacity, will consult the Lord Chief Justice. That concession in the Bill, combined with the strong emphasis on judicial discretion allowing the tariffs to be uplifted, will be central to our attempt to reconcile a tariff-based system with the tradition of English common law. Through it, we hope to address some of the concerns raised by Lord Woolf.

We have discussed the purpose of the Bill, and the way in which getting rid of the tariffs as suggested in amendment 2 would undermine the central purpose of getting a more affordable system into place. We have made a number of concessions in order to meet concerns raised by many distinguished colleagues around the House, including individuals with experience of personal injury law and those with experience as constituency MPs of the honourable and serious work done by personal injury lawyers. I shall show respect to the House and touch on some of those concessions.

In the initial proposals put forward by the Chancellor of the Exchequer in the autumn of 2015, the suggestion was that there would be no general damages payable at all. That was roughly the argument made by the former Labour Lord Chancellor, Jack Straw. We have moved away from that position and accepted that general damages should be paid, but we have suggested that there should be a tariff for those damages. As my hon. Friend Robert Neill has said, we will consult the Lord Chief Justice on that tariff and there will be judicial discretion. There is a precedent on tariffs—they exist in Italy and Spain—and there is even a precedent in English common law in the criminal injuries compensation scheme.

The benefits that we believe a tariff system will deliver include a reduction in the cost of this form of transaction and, hopefully, through that, a reduction in the number of potentially exaggerated or fraudulent claims. That would have an advantage for general public policy in that people would not be encouraged to make fraudulent claims. We believe that the system will also provide certainty and predictability to claimants, especially when they are connected to an online portal that will ensure that they follow a particular sequence. They will proceed to the online portal, then, for the first time, they will be required to go to a medical practitioner specialising in whiplash claims who would give them a prognosis of, for example, six months, 12 months or 24 months. On the basis of that prognosis, through the portal, a fixed tariff would then tell them exactly how much they would be given. This should mean that in the overwhelming majority of cases there would be absolutely no requirement to proceed to court. In any cases where we did proceed to court, we would rely on the small claims process in order to settle the claim, using the tariffs to reinforce the process.

The speeches so far have not touched on Government amendment 1, which I hope all Members, including Opposition Members, will be happy to accept. Clause 5(7)(a) states that the term “tariff amount” means

“in relation to one or more whiplash injuries, the amount specified in respect of the injury by regulations under section 3(2)”.

Clause 3(2) refers to the

“amount of damages for pain, suffering and loss of amenity payable in respect of the whiplash injury or injuries”.

In other words, clause 3 refers to “injury or injuries”, whereas clause 5 refers simply to “the injury”. The proposal in Government amendment 1, recommended by parliamentary counsel, is that we deal with the discrepancy by inserting “or injuries” after “the injury” in clause 5(7)(a). I hope that the Opposition will be happy to accept that suggestion.

That brings us back to the central issue of the way in which tariffs are set. Andy Slaughter focused a great deal on the notion that the tariffs were somehow inequitable in terms of the damage that individuals have suffered. Ruth George said several times that we should not refer to these types of injuries as minor. I want to emphasise that the phrase “minor injuries” is derived from Judicial College guidelines, not from the Government or any political party. It is simply a long-standing convention to refer to injuries of under two years’ duration as minor injuries, and that relates to Sentencing Council guidelines for injuries of under two years’ duration.[This section has been corrected on 3 December 2018, column 6MC — read correction]

As hon. Members have pointed out, people who suffer, particularly from whiplash injuries of longer duration, might also lose earnings, have considerable medical costs, have to go to a physiotherapist and so on. Although those arguments were well made, for example by Mrs Moon on Second Reading, they overlook the central fact that the tariffs will apply only to general damages. An individual who has suffered loss of earnings or who needs extra care costs can apply for special damages in the normal way. The Government propose no change to special damages.

On the arguments of the hon. Member for Hammersmith about the levels of the tariffs, we have attempted to achieve a reduction in the tariff at the lower end. For example, an individual who suffers an injury of under three months’ duration could receive damages considerably less than those in the current guidelines, but I hope that the hon. Gentleman accepts that, as we approach a duration of two years, the compensation offered begins to merge much more closely with the existing guidelines at a level of £3,600.[This section has been corrected on 3 December 2018, column 6MC — read correction]

In addition, as the Chairman of the Justice Committee pointed out, the levels of the tariffs are currently proposals about which the Lord Chancellor will consult the Lord Chief Justice. He will do that not just once but regularly, on a three-yearly basis, to ensure that our calculations on pain, suffering and loss of amenity reflect judges’ views.

It must be remembered that, ultimately, judgments on pain, suffering and loss of amenity are difficult. As my hon. Friend Alex Chalk pointed out, the question of how much compensation somebody receives for a loss of earnings is relatively easy to calculate, because the figure can be derived from the earnings. The amount of money to which someone is entitled for medical costs is, of course, directly derived from the cost of medical care provided. However, in the case of general damages, a judge must attempt to decide the subjective impact of pain on the individual and assign a financial cost to it. That cannot be anything other than a subjective judgment. There is no objective scientific formula for comparing pain with cash, because the cash is designed not to eliminate that pain, but in some way to acknowledge it. Whether we are talking about the criminal injuries compensation scheme, under which our constituents frequently come forward with examples of what they rightly and subjectively experience as a huge discrepancy between the depth of horror they have suffered at the hands of criminals and the amount of compensation offered, or the tariffs for pain, suffering and loss of amenity under the Bill, in the end the compensation provided cannot constitute anything other than a symbolic judgment, with the court or the Government acknowledging that no amount of money can remove the pain, but with the amount designed to be a public recognition that that pain exists.

The former Justice of the Supreme Court, Lord Brown, is an important guide, and his statements in the House of Lords give us all a sense of reassurance on a tricky bit of law. He feels that two important principles are at stake. The first is that there is a moral hazard and societal issue taking place, in that both the incidence of car crashes and, on a national comparison with Germany and France, the disproportionate number of whiplash claims compared with what would be expected both in terms of automobile design and the biology of the human body, need to be addressed—in other words, fraud needs to be addressed. The second is that there has been an anomaly in law whereby some of the graver injustices, and graver injuries and suffering, have been proportionally undercompensated compared with cases of suffering minor whiplash injuries—the majority of cases before the courts—which involve a duration of only three or six months.

I ask the House to accept Government amendment 1. On the basis of the concessions we have made throughout the passage of the Bill, both in the upper House and in Committee, particularly with regard to passing savings on to consumers, I politely ask Gloria De Piero to withdraw amendment 2.

Question put, That the amendment be made.

The House proceeded to a Division.