Clause 5 - Compensation for financial loss

Children and Adoption Bill [Lords] – in a Public Bill Committee at 3:15 pm on 16 March 2006.

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Photo of Stewart Jackson Stewart Jackson Conservative, Peterborough 3:15, 16 March 2006

I beg to move amendment No. 50, in page 10, line 7, after ‘suffered’, insert ‘significant’.

Photo of Mike Hancock Mike Hancock Liberal Democrat, Portsmouth South

With this it will be convenient to discuss amendment No. 8, in page 10, line 8, at end insert

‘including the costs incurred by initiating court action if subsequently upheld,’.

Photo of Stewart Jackson Stewart Jackson Conservative, Peterborough

These amendments are important because of the use of the word “significant”. Before I go on to the detail, I should once again like to make the point about the paramountcy principle not being explicit. It bears repetition because that is not clear in clauses 4 and 5.

We must keep the issue in perspective. Inserting the word significant here might not seem very important in the context of the whole Bill, but we should not exacerbate a difficult situation. As the Bill stands, it has the potential to make matters a lot worse for families who are at war with each other, and going to court over compensation for loss. It is not our job to legislate to encourage such situations to become even more protracted and vexatious than they already are. The word “significant” is important because we do not want families to quarrel about how much money was spent at McDonald’s, how much each party spends on petrol, and so on. That is why we need to set the correct context, and that is why we are proposing the amendment. It is a sensible and helpful amendment, which will save a lot of angst, time and public money although, possibly, it will not be all that popular with our friends the lawyers.

The Government have missed an opportunity in respect of the concept of compensatory contact. Why should we be fixated on financial compensation? That is not an issue on which most parents who have separated or divorced focus, although it is important. What people focus on is the quality of parenting that they can give their children, and that is not taken into account in the Bill. That offends against the general consensus that we have established on the paramountcy principle. It is all about the financial arrangements between the parents and the court, and not about the children. That should be borne in mind.

As the Bill stands, it has the potential to allow for obfuscation and for delay in the resolution of situations. That is why we think that the amendment has merit and should be considered carefully by the Minister.

Photo of Beverley Hughes Beverley Hughes Minister of State (Children, Young People and Families), Department for Education and Skills, Minister of State (Education and Skills) (Children, Young People and Families)

I appreciate the intention to be helpful that lies behind the amendments, although I shall seek to convince the hon. Gentleman that they are not necessary.

Amendment No. 50 may not be practicable, because the insertion of “significant” would cause several difficulties. First, and technically, it would contradict the model normally used in civil cases, where no lower limit is set. We would therefore be relying on the applicant to guess what might be considered significant by the court. Some applicants who might have been awarded compensation could be deterred from making an application if they had to second-guess what the threshold of significant might be and how it would be interpreted by the court.

Secondly, what is significant to one person may be insignificant to another. It would be difficult to set an absolute figure that would help members of the public guess what the threshold might be. I certainly agree with the spirit of the amendment, which is that frivolous claims should not be made, but most people will think seriously about whether to instigate legal proceedings and will not take such decisions lightly. Courts can deal with claims that are frivolous or vexatious.

I agree with the spirit of the suggestion that an application for an amount of compensation should be significant to the applicant. However, we cannot determine in advance what will be significant because people’s financial circumstances vary, particularly after a divorce or separation, when a lot of other factors have to be considered in addition to the amount of money to which someone might have access when determining their disposable income.

I do not agree with the hon. Gentleman on the question of compensatory contact, because I do not agree with the concept enshrined in it—that the child is a commodity, whose time can be used to punish one parent and reward the other. Where there has been financial loss, the compensation sought should be financial and directly in relation to that loss. The child should not be used in that way.

I know that amendment No. 8 was drafted on the basis of common sense. If someone has to apply for a compensation order because the actions of another have cost them money, it certainly seems appropriate that a court should be able to consider whether the party in breach should be asked to meet the costs of the application. However, the amendment is unnecessary, because the courts already have the power in all proceedings to award costs to one of the parties. When financial compensation orders are available, and if the courts have decided to award financial compensation, they will consider more frequently, in relation to these specific matters, whether they should also consider awarding costs.

Photo of Tim Loughton Tim Loughton Shadow Minister (Children) 3:30, 16 March 2006

I agree with the Minister, but does she acknowledge that each time the victim of a breach of contract has to initiate action, he or she is usually subject to court costs of £175, which in many cases are not awarded in that person’s favour? It can be an expensive business having to come back to court each time for repeated breaches of contact that are not the fault of the person who is suffering from it.

Photo of Beverley Hughes Beverley Hughes Minister of State (Children, Young People and Families), Department for Education and Skills, Minister of State (Education and Skills) (Children, Young People and Families)

I agree that that is a problem. However, I was saying that the court has the power to award the costs and that it might well consider doing so specifically in relation to this measure, which is about awarding financial compensation. The court may want to consider adding financial compensation for those who have had to pay court costs. The real point is that the court already has the power. I therefore hope that the hon. Gentleman will withdraw the amendment.

Photo of Stewart Jackson Stewart Jackson Conservative, Peterborough

As my grandfather used to say, warm words butter no parsnips. Those words from the Minister were warm indeed, but I would make two points, if I may be so bold. The concept of compensatory contact was slightly oversimplified by the Minister and merits further debate on another occasion. I also think there is a larger issue about the onus on an individual to seek justice in family courts rather than it being the responsibility of public authorities as it is, for example, in France. No doubt we will discuss that.

On the basis of a break-out of consensus and with perhaps nine minutes to go, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Jeremy Wright Jeremy Wright Conservative, Rugby and Kenilworth

I beg to move amendment No. 63, in clause 5, page 10, line 15, after ‘excuse’, insert

‘and the standard of proof is the balance of probabilities’.

The amendment covers a simple point, which it will not take me long to explain. It deals with the provisions relating to reasonable excuse and the decision that the court must make as to whether someone has a reasonable excuse for not paying compensation for financial loss.

The provisions relating to reasonable excuse are similar to those in clause 4 relating to enforcement orders. The difference is that clause 4 makes it clear that the burden of proof in proving reasonable excuse lies on the individual claiming it and that the standard of proof is the balance of probabilities. In clause 5, the standard of proof—the balance of probabilities—is missing. I suspect that that is an error, but I do not know. I hope that the Minister’s response will be   favourable because it seems self-evident to me that the standard of proof, as well as the burden of proof, should be clear in the Bill. If it is right in clause 4, it should also be right in clause 5.

Photo of Beverley Hughes Beverley Hughes Minister of State (Children, Young People and Families), Department for Education and Skills, Minister of State (Education and Skills) (Children, Young People and Families)

I understand exactly why the hon. Gentleman has raised this matter because it does look like an omission. However, it is not one. As he may be aware, the balance of probabilities is the standard of proof normally used in family proceedings and is, therefore, the default position. We have expressly inserted it in clause 4 because we are making it clear that the standard of proof for breaches of enforcement is beyond reasonable doubt because of the penalties that may ensue. It was felt advisable to avoid any misinterpretation by stating that despite that higher standard of proof for breaches, the standard of proof for excuses would still be the default position of the balance of probabilities. It was simply to prevent any misinterpretation in clause 4 and for clarification rather than an omission in clause 5.

Throughout the Children Act 2004 and other family law, the standard of proof has been declared to be the balance of probabilities. That is what applies in clause 5, but it is not necessary to state that in the Bill. We have done so in clause 4 to avoid any misunderstanding about the standard of proof on excuses, which remains the norm, but we are going for a higher standard of proof for breaches. I hope that that satisfies the hon. Gentleman.

Photo of Jeremy Wright Jeremy Wright Conservative, Rugby and Kenilworth

I am grateful for that explanation, but I am not sure that it would not be simpler to make it clear in relation to clause 5 as well as clause 4. I was going to say that I understand what the Minister said and that I was prepared to withdraw the amendment, but if she wants to persuade me otherwise, she may.

Photo of Beverley Hughes Beverley Hughes Minister of State (Children, Young People and Families), Department for Education and Skills, Minister of State (Education and Skills) (Children, Young People and Families)

I simply want to make the position absolutely clear. If we were to do that in clause 5, we would have to do it in every clause in the Children Act 2004 and in legislation on family proceedings. The default position is the balance of probabilities, and that is why it does not normally have to appear.

Photo of Jeremy Wright Jeremy Wright Conservative, Rugby and Kenilworth

I am even more grateful for that further clarification. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 5 ordered to stand part of the Bill.

Further consideration adjourned.—[Mr. Cawsey.]

Adjourned accordingly at twenty minutes to Four o’clock till Tuesday 21 March at half-past Ten o’clock.