Damages (Personal Injury) Order 2017 — House of Lords, 2017-07-18
Topic: Law and Crime
David James Fletcher Hunt (Conservative, Centre-right): My Lords, in declaring my interests, as set out in the register, I join my noble friend Lord Faulks in very much supporting the points made by my noble friend Lord Hodgson of Astley Abbotts, and congratulate him on giving us this opportunity to reflect on the present situation and to look to Ministers expeditiously to resolve this problem. Noble Lords will know that I wear a number of hats in debates in this House, but I speak today as a common lawyer—that is to say, a lawyer who works within the common law. I have had the privilege to practise as a common lawyer since 1968. The assessment of damages for personal injuries has always been a function of the common law. To lapse momentarily into Latin, the founding concept that I was always taught of the law of damages is restitutio in integrum—restoring the claimant as nearly as possible to the financial position in which he or she would have been had the damage or injury not occurred For a seriously injured individual, it may be thought next to impossible to put a price on how that is to be delivered, so the law of damages has developed a series of principles designed to deliver a fair outcome—fair, of course, to the injured claimant, but fair also to the person paying those damages. The civil law of damages in this context is never punitive, only compensatory, and we must remember that. The principle is that of full compensation, which is to say neither undercompensation nor overcompensation. It is also known as the 100% compensation principle, which exists to ensure that the claimant, the injured party, is compensated fairly by the person paying the damages If there is undercompensation, then the claimant is not fairly compensated. Equally, it is not fair to the defendant if the claimant is overcompensated. As has been said in this evening’s debate, the payment may be made by the Government on behalf of the National Health Service or by an insurer, but it is ultimately funded by insurance premiums or taxes paid by everyone. If the claimant is overcompensated, then he or she is placed in a better financial position than if the injury had not occurred, and the defendant is paying something over and above the amount that is proper and fair compensation The discount rate is a vital part of the process of assessing how much compensation is fair. In this respect, it is just like any other component of the sophisticated methods by which lawyers and the courts assess as accurately as possible what a claimant’s losses are and will be for the future. The discount rate is simply a device by which a claimant receiving a lump sum for damages has that sum adjusted to reflect the fact that losses for a period of future years are being paid fully in advance. If that rate, which is set by the Lord Chancellor, is too low, then the claimant will be overcompensated. If it is too high, they will be undercompensated. It is vital that the discount rate should be set at a rate which allows the vital principle of 100% compensation to be achieved: no less, no more. That is not a controversial principle. Indeed, the principle is central to the proper function of the common law I was heartened to learn that the Economic Secretary to the Treasury, Stephen Barclay, speaking at a conference on 27 June, stated that the Government intend to keep true to the 100% compensation principle and will put the statutory process for setting the rate, "on the firmest possible footing in future, so we have a better and fairer system for claimants and defendants" In essence this is a question of fairness for everyone involved. When does the Minister expect to publish the Government’s official response to the consultation earlier this year, which I am confident will fully embody the words of his colleague, the Economic Secretary to the Treasury?