Thursday, 27th March 2003.

The House met at eleven of the clock: The PRINCIPAL DEPUTY CHAIRMAN OF COMMITTEES on the Woolsack.

Prayers—Read by the Lord Bishop of Manchester.

On Question, Motion agreed to.

House in Committee accordingly.

[The PRINCIPAL DEPUTY CHAIRMAN OF COMMITTEES (Lord Grenfell) in the Chair.]

Clause 87 [ Fees]:

The noble Lord said: We now resume the debate which finished on the previous occasion with the success of Amendment No. 132 on civil court fees. In many ways, as the Minister is aware, we on the Opposition Benches are seeking to assist the Government to resist a Treasury-imposed directive, which would lead to virtually all the costs of civil courts being raised through the level of court fees.

Not that I am ever allowed to disclose any private discussion, but I am aware that there is considerable unrest at all levels of civil justice about this policy. In particular, on the last occasion that the Committee debated the Courts Bill, I quoted the Civil Justice Council, chaired by the Master of the Rolls, which had called on the Government to abandon the policy of raising virtually the full cost of civil courts through fees.

However, as the Minister will be aware, since that date and since the passing of the amendment, the Government have decided to unveil court fee increases. I must not show too many of my grey hairs, but I can recall the court fee being £10 for the writ. I remember it rising to £50 and then to £100. I see from the Law Society Gazette of 20th March that, as from 3rd April, if anyone wishes to commence proceedings in the High Court, the proposed increases will mean that the fee will be £500. The Government intend that the court fee for a claim of more than £100,000 within the High Court jurisdiction—say, by someone with a disability who has been injured in an accident—will now be £700. That will be the cost of simply starting the process. One hopes that under the reforms of the Lord Chief Justice, the noble and learned Lord, Lord Woolf, there will be the

normal pre-action protocols. But if the proposals go through, the cost of issuing the writ will now be £700, and if the claim happens to be above £150,000, it will be £800.

I ask the Government to reconsider. There is no doubt that, as the Civil Justice Council points out, this will lead to a denial of access to justice. I hope that that will no longer be the case following the passing of the amendment. In these amendments—in particular, Amendment No. 132A but also in Amendments Nos. 132B and 132C—we give the Government a menu of options. Indeed, we are from the Opposition and we are here to help the Government. They can choose any one of these three amendments.

The first—Amendment No. 132A—would exclude the recovery of costs other than recurrent running costs. It is a very sensible amendment proposed by a number of outside bodies. Amendment No. 132B would seek to exclude from this new power for the Lord Chancellor to set fees the recovery of judicial salaries and the cost of accommodation. We are aware that problems have been raised by the Royal Courts of Justice, and those have to be dealt with. I hope that the Government will be able to engage in the widest possible consultation and a proper and open debate about the issue of the Royal Courts of Justice and about whether a level of 100 per cent recovery is appropriate and defensible. If it is not, what should the percentage of recovery be, and is it a percentage that will change over time?

The final amendment—Amendment No. 132C— would lay down that:

"The Lord Chancellor may not under this section seek to recover judicial salaries".

I hope that this will be the most acceptable of the amendments. The provision of judges is a social function. It should not be borne only by those who choose to commence proceedings and are required to pay court fees.

I hope that the Government will consider having a meeting with the Civil Justice Council. I understand that there has been no meeting on this matter, but the Minister will be aware that the council issued a very clear report on it seeking a reversal of the policy. The Civil Justice Council, chaired by the Master of the Rolls, is an important body on which sit leaders of civil justice in all its forms. I believe that they deserve at least a meeting to debate and discuss this policy. In the mean time, I beg to move.

11.15 a.m.

Amendment, by leave, withdrawn.

[ Amendment No. 132B not moved.]

The noble Lord said: I beg to move.

11.22 a.m.

On Question, Whether the said amendment (No. 132C) shall be agreed to?

Their Lordships divided: Contents, 90; Not-Contents, 87.

Resolved in the affirmative, and amendment agreed to accordingly.

Clause 87, as amended, agreed to.

11.31 a.m.

Clause 88 [ Award of costs against third parties]:

The noble Lord said: In moving Amendment No. 133, I shall, with the leave of the Committee, speak also to Amendment No. 136. My noble friend Lord Thomas of Gresford will speak to Amendment No. 138, which is also in the group.

Amendments Nos. 133 and 136 are probing amendments designed to clarify some of the terms of Clause 88. The clause inserts a new Section 19B of the Prosecution of Offences Act 1985, introducing, for the first time, provision for the award of costs against third parties in criminal proceedings. A third party costs order is defined as,

"an order as to the payment of costs incurred by a party to criminal proceedings by a person who is not a party to those proceedings".

I assume that a third party costs order can apply to part of the costs incurred by a party to the proceedings and not simply to the whole of the costs, and I have tabled an amendment that would clarify that. Although I have little doubt that that is what subsection (2) of the new section means, I would like it clarified.

Amendment No. 136 is designed to deal with a significant omission from new Section 19B. The new section says nothing about the nature of the proceedings by which a costs order may be made against a third party. It is obvious that justice requires that a third party to criminal proceedings—in other words, somebody who is outside the proceedings and is not a party himself—cannot be ordered to pay the costs of those proceedings, unless there has been a hearing at which he is entitled to be present and make the case as to why a third party costs order should not be imposed.

There is no provision in the new section that requires the regulations to be made by the Lord Chancellor to include any provision either for notifying the third party or, more importantly, giving the third party a right to a hearing at which objections can be made to an order being made against him for payment of costs. I beg to move.

11.45 a m

Noon.

Amendment, by leave. withdrawn.

[ Amendments Nos. 134 to 137 not moved.]

The noble Lord said: The noble Lord, Lord Hunt of Wirral, spoke on the subject of this amendment during the previous debate. The Newspaper Society, as the representative of the provincial press, has spoken to both the noble Lord and myself on this matter.

The society objects to the press being subject to third party costs orders at all on the grounds that the existing penalties for any breach of reporting restrictions under the rules covering contempt of court are entirely adequate. I have to say that I felt unable to go as far as that, but press coverage of the criminal courts, particularly in local newspapers, as the noble Baroness said, is a matter of importance. There is a real risk, as was pointed out by the noble Lord, Lord Hunt, that the possibility of a third party costs order may act as a deterrent to the full and proper reporting of court cases.

When the court decides whether serious misconduct has taken place, it should take into account the important role of the press. Amendment No. 137A is therefore specifically targeted on the press, unlike the earlier amendments, Amendments Nos. 134 and 135, which are of general application and would apply to everyone.

Mistakes made by the press, even if they are mistakes that have serious consequences in terms of costs, should not necessarily be regarded as matters of serious misconduct. Of course the deliberate publication of matters known to be likely to lead to a mistrial is an entirely different matter, but this amendment calls upon the court to have particular regard to the importance of the right of freedom of expression. In doing so, the amendment is based on a similar clause that was added to the Human Rights Bill during the course of its passage through Parliament in 1998.

We believe that, for the same reasons it was felt justified to include the clause in the Human Rights Bill, a clause of this kind would be justified for inclusion in the Courts Bill. I beg to move.

Amendment, by leave, withdrawn.

[ Amendment No. 138 not moved.]

Clause 88 agreed to.

Clauses 89 to 91 agreed to.

Schedule 5 agreed to.

Clause 92 [ Periodical payments]:

The noble Lord said: We now move to consider Clauses 92 and 93 headed "Damages", which provide for periodical payments to be ordered by the court. This gives us an opportunity to review the position of structured settlements. The amendment asks a question about the extent to which periodical payments will be dealing with future loss, whether pecuniary or not.

It is some time since the first UK structured settlement involving periodical payments with model documentation was put in place. In July 1989, the first structured settlement attracted considerable publicity. In the following year more cases were settled on that basis. Since then the flow of cases has increased. In June 1991 a UK Law Commission inquiry was appointed to look at structured settlements which reported in 1994. It concluded the report Structured Settlements and Interim and Provisional Damages in the following terms:

"Structured settlements are a useful alternative form of arranging an award of damages which should remain available to allow plaintiffs [now claimants] a choice as to how to plan their future".

In May 1995, legislation based on the commission's recommendations was enacted. We have seen the development since then. I refer particularly to the Damages Act 1996, which allowed for structured settlements to be made by consent.

In a case before our Judicial Committee in 1998, the noble and learned Lord, Lord Steyn, made the following comments:

"The present power to order periodic payments is a dead letter. The solution is relatively straightforward. The court ought to be given the power of its own motion to make an award for periodic payments rather than a lump sum in appropriate cases. Such power is perfectly consistent with the principle of full compensation for pecuniary loss. Except perhaps for"—

I greatly regret that he added these words—

"the distaste of personal injury lawyers for change to a familiar system, I can think of no substantial argument to the contrary. But the judges cannot make the change. Only Parliament can solve the problem".

That explains why we are here today discussing Clause 92 in particular.

We have had extensive consultation. I pay tribute to the noble and learned Lord the Lord Chancellor. In March 2000 he published a consultation paper entitled Damages: the Discount Rate and Alternatives to Lump Sum Payments. He concluded that further discussion was necessary. In March last year he published a further consultation paper entitled Damages for Future Loss: Giving the Courts the Power to Order Periodical Payments for Future Loss and Care Costs in Personal Injury Cases. The post-consultation report was published in November last year. I applaud the speed with which the Government have responded in putting forward Clause 92 as far as it allows for periodical payments.

The issue has been looked at the by the Clinical Disputes Forum, which published a paper on the subject in August 2000 entitled Lump Sum Damages and Periodical Payments. The working party of the Master of the Rolls published a report last August on structured settlements.

I support what is clearly a more appropriate way of compensating claimants because it will ensure that they have the money to which they are entitled and for as long as it is needed without the anxiety of the award running out if they live longer than expected. But a number of reports have concluded that there must be an element of finality. We shall come to specific amendments dealing with the proposals on variation in a moment.

The extensive consultation that has taken place has disclosed that periodical payments are to be welcomed provided that they introduce a degree of finality. There are views in favour of periodical payments from a range of organisations such as the National Health Service Litigation Authority, the Medical Defence Union, the Medical Protection Society, the Association of British Insurers, the International Underwriting Association and by claimants' organisations. Generally, these are to be welcomed. But all of them are unanimous in their view that they have serious concern about a proposal for those payments to be varied at some unspecified stage in the future.

The variation clauses could cause much more litigation, endless uncertainty, constant scrutiny for claimants and financial instability for those who seek to compensate. I hope that the Minister will accept that there could be a fatal flaw in the system. If periodical payments are introduced with a suspicion that at some stage in the future they will be changed or varied, then I do not believe that the general welcome for periodical payments will continue.

12.15 p.m.

Amendment, by leave, withdrawn.

12.30 p.m.

The noble Lord said: I did not participate in the debate on the previous amendment but I strongly agree with the principle of periodical payments, moving from the existing structured settlement regime, which requires the consent of both parties if it can be done only by an out of court settlement subject to approval by the court, to a situation where the court has power to order periodical payments. While this is a step forward it will be essential to ensure that the real value of periodical payments is maintained. That is the purpose of the amendment.

Even at the Government's target figure of 2.5 per cent inflation, periodical payments with a fixed annual amount would steadily lose their real value over time. Ignoring the effect of compounding, a 2.5 per cent increase over a period of 10 years per annum would lead to a decline in real value of the periodical payment over those 10 years by 20 per cent. The figure is 20 per cent not 25 per cent: that is a matter for the mathematicians. If one takes into account the compounding of the interest—the 2.5 per cent per annum is measured not on what happened 10 years ago but with the previous year's figure—the problem becomes even more acute. The consequences would be not only serious but disastrous if inflation rates were over 20 per cent per annum as in the 1970s or early 1990s.

It is now practicable to ensure that the real value is maintained because the cost of an order for periodical payments can be funded through index-linked government securities. It is not practicable to link periodical payments to earnings. That is unfortunate. Because of the increase in real earnings, a person rendered unfit for work 40 years ago and in receipt of periodical payments fixed even in real terms at the 1963 figures would have a standard of living well below that of a healthy contemporary even if those periodical payments had been index linked. That seems to me an unavoidable problem. There is no realistic way in which an earnings-linked annuity could be funded. However, I believe that linkage to the retail prices index is not only practicable but plainly desirable and essential. I beg to move.

Amendment, by leave, withdrawn.

The noble Lord said: This amendment is entirely different in nature from the previous one. It arises from correspondence with the Association of Personal Injury Lawyers. The association pressed for an amendment that would provide that an order for periodical payments should need specifically the consent of the claimant or a McKenzie friend, when the claimant was represented by a McKenzie friend.

I saw problems with requiring consent in all cases, particularly in the case of a young person who was legally capable of taking a decision for himself but might take an unwise one. The prospect of a large lump sum may be tempting to a claimant who would be better off in the long run with a periodical payment. The claimant might also come under pressure from members of his or her family who expected to profit in some way from the lump sum.

Having said that, the court should undoubtedly have regard to the wishes of the claimant and should be required to find out what they are. I accept that in practice a court that acted reasonably would almost certainly do that. However, the requirement should be in the Bill. I do not suppose that the court would ignore the claimant's wishes, even without a statutory obligation, but if the requirement were in the Bill the court would have to find out the claimant's wishes. It would also mean that if the court did not act in accordance with those wishes, it would have to give reasons for overriding them. It is desirable that it should do so. Therefore, there should be an obligation to have regard to the claimant's wishes. I beg to move.

Amendment, by leave, withdrawn.

The noble Lord said: The amendment would leave out Section 2 of the Damages Act 1996 so far as subsection (4) is concerned. Amendment No. 139A, which is within the group, would leave out lines 4 and 5 on page 45. That provision concerns,

"enabling a party to apply for a variation of provision included under paragraph (a) or (b).

Amendment No. 139B, which is also in this group, would leave out "(a) or", in line 5, so that one could apply only under paragraph (b). Amendment No. 147ZA would leave out the words "whether or not" from line 18 and insert "if". Amendment No. 140ZB would, at the end, insert "or". Amendment No. 140A, which is in the name of the noble Baroness, Lady Finlay of Llandaff, is also in the group I think that that covers all the amendments in the group. I thought that I should read them out so that everyone knows exactly where we are in the latest selection.

Amendment No. 139ZAA is really a probing amendment. I have to confess to the Minister that I really do not understand subsection (4), and I look forward to her explanation. On Amendment No. 139A, however, it should be possible to vary the way in which payments are made. We are dealing here with the mechanics of payment, not with variation—to which we shall return as a big subject for debate. There would be no concern if, for example, the claimant wanted quarterly payments rather than monthly ones. That should be allowed. The intention is clearly for the courts to control such variation. Again, I am giving the Minister the opportunity of responding on the point.

Amendment No. 139B offers for consideration whether the words "whether or not" should be replaced by "if". If the court does not specify the method of payment, I am not sure that the person who is obliged to make the payment should be fixed with a method and then be in breach of the order if he varies it as long as the payments are still made and secure. I hope that that explains the reasoning behind the amendment. It may be advantageous if I now leave it to the Minister to explain. I beg to move.

1.00 p.m.

1.15 p.m.

Amendment, by leave, withdrawn.

The noble Baroness said: These amendments clarify the methods of payment to which I have just referred that are reasonably secure for the purposes of new Section 2(3), which requires the court to be satisfied before it makes a periodical payments order that the continuity of payments under the order is reasonably secure.

As I have explained, new Section 4 of the Damages Act 1996, inserted by Clause 93, ensures that the continuity of periodical payments is fully protected by the Financial Services Compensation Scheme where the payments are self-funded by an insurer or funded by an annuity. Section 6 of the Damages Act guarantees the security of self-funded payments by public sector bodies made under a ministerial guarantee. But Section 6 is not designed to guarantee payments made by government departments and is not suited to the National Health Service, which will be funding a substantial number of periodical payment orders, as it would appear to require an individual guarantee in each case. That did not matter when periodical payments had to be made by agreement. It would be clear to the claimant that the defendant department was good for the money, so the absence of a formal guarantee would be no bar to a settlement.

In future, however, a court ordering periodical payments will need to be satisfied as to their future security. That requirement will apply when periodical payments orders are made against government departments and health service bodies, in particular the National Health Service Litigation Authority. At present, such payments are usually self-funded, and we wish to ensure that that can remain the case under the new system. Self-funding the payments as they arise represents the best value for the public money concerned. Therefore Amendments Nos. 139ZB, 139ZC, 139ZD, 139ZE, 139ZF and 140ZBA will ensure that the continuity of payments made by government and health service bodies is reasonably secure for the purposes of new Section 2(3).

Amendments Nos. 140ZBB and 140ZBC enable the Lord Chancellor to specify in an order the bodies that will constitute "government and health service bodies" for the purposes of new Section 2(4) and (7) which deal with alterations to the method of payment. The amendment is framed in that way to provide clarity as to the bodies which are protected and to provide flexibility, for example, to alter the designated bodies should they change in name or status. I beg to move.

On Question, amendment agreed to.

On Question, amendments agreed to.

The noble Baroness said: As I explained in speaking to previous amendments, the Government wish to give defendants and their insurers as much flexibility as possible in funding court-ordered periodical payments provided always that the claimant's interest in the ongoing security of the payments is protected. To ensure that the Bill achieves that, Amendments Nos. 139ZG and 1390 clarify the provisions relating to the method of funding payments. I beg to move.

On Question, amendment agreed to.

[ Amendments Nos. 139A and 139B not moved.]

On Question, amendment agreed to.

The noble Lord said: This probing amendment is intended to discover the proposed effect of a bankruptcy order on a right to periodical payments. I believe that the position should be similar to that of occupational and personal pensions. The position in that regard broadly is, first, that the underlying right to a future pension payment does not vest in the trustee in bankruptcy and therefore cannot be sold to pay debts; secondly, that the pensioner can retain part of the current payments—the guaranteed minimum payment in the case of a contracted-out occupational pension—but the balance of the current payment goes to a trustee in bankruptcy; and, thirdly, that after the pensioner has been discharged from bankruptcy, he or she gets the subsequent pension payments in full. That seems to be a good model for periodical payments for damages.

It would be distasteful in the extreme if someone's rights to substantial periodical payments for severe personal injury could be bought and sold. However, it is not clear that new Section 2(6) of the Damages Act 1996 achieves that. It provides for restrictions on the assignment or charge of the right to periodical payments, which I welcome. But what about bankruptcy? It is not mentioned in that provision. The fact is that the property vests in a trustee in bankruptcy by operation of law, not by assignment or charge. Subsection (6) does not appear to cover the case of bankruptcy. Have the Government formed a view about the effect that a claimant's bankruptcy should have on an order for periodical payments? Do the rights in fact vest in the trustee in bankruptcy? If so, can he dispose of them? What happens about periodical payments becoming payable during a period of insolvency? Do they vest in the trustee in bankruptcy? If so, should all or part of them remain payable to the claimant? For example, should the claimant continue to be entitled to receive payments that would be equal to what he might otherwise receive in means-tested benefits?

This important issue needs more consideration than it appears to have received to date. I beg to move.

Amendment, by leave, withdrawn.

House resumed.

[ The Sitting was suspended from 1.31 to 3 p.m.]

3.1 p.m.

3.10 p.m.

Whether they have any plans to establish a human rights commission.

3.16 p.m.

Whether they will recommend the establishment of a Select Committee to consider the future of the Monarchy.

3.18 p.m.

What action will be taken as a result of the attendance of children of school age at recent protest meetings if persons with professional responsibility for the children are implicated in encouraging such attendance.

3.28 p.m.

Report received.

Clause 3 [ Recommendations by Electoral Commission as to the distribution of United Kingdom MEPs]:

The noble Baroness said: My Lords, the amendment is designed to set out an important principle; namely, that a power as important as that affecting the franchise for the European Parliament should not be exercised by order, unless and until legislation to effect such a change has been agreed in the European Community. The clause allows the Lord Chancellor—while negotiations continue on the final numbers for each country and before any agreement is reached on the matter, still less any change in Community law—to order the expenditure of public money to investigate a range of possible outcomes as regards changes to our existing electoral arrangements.

In general, it is best to proceed on the basis of what the law is, not what it might be. I should therefore be grateful to the Minister if she could advise the House of the circumstances in which this power might be used by the Government.

I am prepared to accept that there may be many exceptional circumstances. There is the firm background of the Nice treaty. There is the impending accession of a large number of countries and the approaching date of elections to the European Parliament. Against that background, it is reasonable to explore changes in the franchise arrangements as envisaged under the Bill. But that could be treated as a special case. Exceptional circumstances do not justify permanent powers.

Is the view of the Minister that there might be a change in the law at some time in the future a justifiable pretext for taking a permanent power to incur spending on an investigation of possible electoral futures? I am not sure that it is. Therefore, I hope that the Minister will give some indication of where and when this power will he used and will explain the safeguards that there will he on the use of such an open-ended power. I beg to move.

3.30 p.m.

Amendment, by leave, withdrawn.

[ Amendments Nos. 2 to 4 not moved.]

The noble Baroness said: My Lords, in moving this amendment, I do not pretend that the wording is perfect. But the point behind it is extremely important. It follows on from the spirit of an amendment moved by the noble Lord, Lord Rennard, in Grand Committee—an amendment with which this side of the House had a great deal of sympathy, but which was swatted away by the Minister as not relevant to the present Bill.

With respect, the issue is entirely germane to the present Bill which is about the representation of the United Kingdom in the European Parliament. Those of us who believe profoundly in the importance of the European Parliament, as I do, are deeply concerned by the degree of cynicism and alienation that surrounded the methods of election used in the last European elections. I do not believe that it is in the long-term interests of true representative democracy or the standing of the European Parliament to perpetuate that system of election.

The closed list system, used cynically, deprives the electorate of what this amendment asks that they should have; namely, an effective means of choosing an MEP of their own choice from among candidates set before them. Surely that right is the very essence of representative democracy.

As is well known, we on this side are not in general terms enthusiasts of PR systems. But the fact is that it is possible to have a PR system which allows electors to choose an individual MEP. Sadly, the Government chose a system in 1999 which deliberately deprived the electorate of that right. Instead, they placed the selection of MEPs in the hands of the central apparat of the various political parties through the notorious closed list system.

To its great credit this House, on six occasions, stood against that undemocratic system. Indeed, it never agreed to the imposition of closed lists. They were imposed by use of the Parliament Acts. No less an authority than the noble and learned Lord, Lord Donaldson of Lymington, has added his voice to those who argue that an Act such as this. passed by only one House of Parliament, is of questionable legality. But that is not the issue before us today.

However, I question whether this discredited and anti-democratic system can be allowed to continue indefinitely without question, as the Minister appeared to imply in Grand Committee. There is no one outside the ranks of the Government and their most robotic supporters outside Parliament who thinks that it should.

Amendment No. 5 is not a device to interfere with or to hold up progress towards treaty implementation or towards the next European elections. Doubtless, that change will be levelled, but it would be wrong. Nor is it a frivolous amendment. It addresses an issue of major concern. It simply states that at a certain point in the future after the first order issued under this Act, but before any subsequent order, the Electoral Commission should be required to conduct an investigation into the nature and application of the closed list system and into whether it properly allows the public to choose their MEPs.

It also asks that the report of the Commission should be debated in both Houses of Parliament. That is not an unreasonable proposition or an unreasonable expectation to have of the Government. Indeed, I believe that there would be agreement with this objective on all Benches of this House. I do not think that this House which fought so hard and for so long against closed lists should give up that fight.

I hope that the Government will listen and that the Minister will give an undertaking that there will be a full review of the validity of the closed list system. If not, I shall be tempted to return to the matter at Third Reading. Indeed, given any encouragement from noble Lords on the Liberal Democrat Benches, I might be tempted to test the opinion of the House. I beg to move.

Amendment, by leave, withdrawn.

3.45 p.m.

The noble Lord said: My Lords, this is a short and largely self-explanatory amendment which has been tabled in response to a letter from a person registered as a voter in Gibraltar. The names of the electoral regions are listed in subsection (3) of new Section 1 of the European Parliamentary Elections Act 2002. If the Electoral Commission were to so recommend, the Lord Chancellor could then decide that Gibraltar could be added to, say, the North East region for the purposes of the election, the North East being the region with the smallest number of voters per seat. That could take place, but it would not mean that Gibraltar would become a part of the north-east of England, because plainly it is not.

In order to explain what is the constituency, it would be more rational to say that the constituency is the constituency of the North East region of England and Gibraltar. I beg to move.

Amendment, by leave, withdrawn.

Clause 17 [ Regulations relating to sections 14 to 16]:

The noble Lord said: My Lords, in moving this amendment I shall speak also to Amendments Nos. 8 and 9. These amendments are intended to pick up comments made by the Delegated Powers and Regulatory Reform Committee. In its eleventh report the committee doubted whether secondary legislation was appropriate for establishing the right to vote, the right to register a vote as a voter or the right to serve as an MEP in Gibraltar.

The report pointed out that the corresponding disqualifications in the United Kingdom were mostly dealt with by primary legislation although in some cases it was brought in by secondary legislation referring to primary legislation in another Act of Parliament. The report pointed out that the disqualification under what are now Clauses 17(1)(d) and (g) and Clause 21(1) are not limited to making provision corresponding to provision in the United Kingdom.

The Government delivered a full reply to that, but the committee was not persuaded and repeated the comments I have already mentioned in its twelfth report. The effect of these amendments is not to require primary legislation, but to do the next best thing, which is to limit the powers under Clause 17(1)(d) and (g) and Clause 21(1) to the making of provision corresponding to that in the United Kingdom. That means that it will not require primary legislation, but that disqualification must be limited to grounds for disqualification established by primary legislation in the United Kingdom. That seems to be more appropriate than the apparently much wider powers which the Bill now gives to the Government to legislate by regulation. I beg to move.

Amendment, by leave, withdrawn.

[ Amendment No. 8 not moved.]

Clause 21 [ Disqualification from office of MEP]:

[ Amendment No. 9 not moved.]

4.3 p.m.

On Question, Motion agreed to.

[ The page and line references are to HL Bill 20 as first printed for the Lords.]

2 Clause 1, page 1, line 10, after "person" insert "other than a person receiving mental health services"

The Commons disagreed to this amendment for the following reason:

2A Because it is important for the Bill to be able to apply to all NHS hospital patients and it is discriminatory to exclude patients receiving mental health services.

2B Page 6, line 23, leave out from "regulations" to end of line 24 and insert "or an order under this Part is exercisable by the appropriate Minister by statutory instrument"

2C Page 6, line 29, leave out from beginning to "to" in line 31 and insert—

"(2A) Regulations under section 1 which—

(a)prescribe care for the purposes of the definition of "qualifying hospital patient"; and

(b)are made by the Secretary of State (or by the Secretary of State and the Assembly acting jointly), may not prescribe a description of care which is, or includes, mental health care unless a draft of the regulations has been laid before, and approved by a resolution of, each House of Parliament.

(2B) A statutory instrument which —

(a)contains regulations or an order under this Part, other than regulations which fall to be approved in draft by virtue of subsection (2A); and

(b)is made by the Secretary of State (or by the Secretary of State and the Assembly acting jointly), is subject"

2D Page 6, line 40, at end insert—

"mental health care" means any health services relating to mental health which are of a description prescribed by order;"

2E Page 7, line 34, leave out subsection (5)

The noble Baroness said: My Lords, I beg to move that the House do not insist on their Amendment No. 2 to which the Commons have disagreed for their reason numbered 2A, but do agree with the Commons in their Amendments Nos. 2B to 2E in lieu thereof.

Some people have argued that mental health patients must be excluded because it is simply not possible to carry out an assessment and arrange a care plan within the minimum interval provided for patients receiving acute care. The Government do not dispute that; indeed, we accept that it may well be the case. If it did seem appropriate to extend reimbursement to the mental health sector in the future, we would want to consider whether the level of reimbursement or the minimum interval should be altered to reflect any additional difficulties. The Bill already allows us to do that. So, as happens in Sweden, we could allow a longer period of time.

However, despite having allowed for different time-scales, I understand that noble Lords are still concerned about this. For that reason the Government have tabled amendments to require any regulations which bring patients receiving mental health care within the definition of "qualifying hospital patient" to be subject to the affirmative procedure.

Because the amendments have been added at this late stage, the drafting is rather tortuous. Perhaps I may explain the effect of the amendments, why they are necessary and how they relate to each other.

Although we originally thought that achieving this would mean an amendment to Clause 1, we were advised by parliamentary counsel that, because the substance of the issue is more to do with the affirmative procedure, the amendment is more properly located in Clause 8. Therefore, in Clause 8 we have added a requirement that regulations which prescribe mental health care must be subject to the affirmative procedure. That has meant that we also need to define "mental health care", and to do this it is necessary to add an order-making power to deal with the problem of definition in the most straightforward way. That order will prescribe mental health care as care which is received by a patient who is under a consultant psychiatrist. Two further consequential amendments have been added to Clause 9 and Clause 11.

The implications of these changes are that the existing set of regulations prescribing care, which are currently out for consultation, will have to be slightly amended to exclude this type of care, as defined in the order, as being outwith the definition of acute care. Then, as and when it is considered appropriate, we will lay before the House regulations bringing patients receiving mental health care within the scope of the definition of "qualifying hospital patient". If the Government decide in the future that bringing such patients within the provisions of the Bill would be an effective way of tackling the delays as regards community care services suffered by people with mental illness—a point addressed several times during our debates—Parliament will then be able to debate, and disagree to, any such regulations.

I agree with what the honourable Member for Chelmsford West said in another place; namely, that this group could be included in the future but should not be included at the moment. That is the right approach. I hope that noble Lords will be able to accept the Commons amendments.

Moved, That the House do not insist on their Amendment No. 2 to which the Commons have disagreed for their reason numbered 2A, but do agree with the Commons in their Amendments Nos. 2B to 2E in lieu thereof —( Baroness Andrews.)

On Question, Motion agreed to.

5 Clause 2, page 2, line 5, after "hospital" insert "after 1st April 2004"

The Commons disagreed to this amendment for the following reason:

5A Because it is necessary for the Bill to come into force before 1st April 2004.

5B Leave out "not".

The noble Earl said: My Lords, perhaps I may address the two issues in reverse order by taking first the issue of the sunset clause. That may seem perverse but the noble Baroness may understand shortly why I do so.

I listened carefully to what she said. In essence, she has taken many of the same lines of argument against the amendment as were used by the noble Lord, Lord Hunt, during our debate last week. I do not accept the arguments which attempt to portray sunset clauses as somehow anti-constitutional and as fettering the will of Parliament. If Parliament decides that an Act must be subject to a mandatory review in both Houses after a certain period of its operation, then Parliament is entitled to make that decision, no matter what the subject of the legislation. I take some comfort from the fact that it was not only Conservatives and Liberal Democrats who joined me in pressing that opinion through the Lobbies last week: there was also a heal thy number of very distinguished Cross-Bench Peers. I was heartened by and grateful for the support of all noble Lords who voted for the amendment. Nevertheless, in deciding what to do with the amendment today, I feel that I must take account of the considerable number of concessions made by the Government during the Bill's entire passage. They are not insignificant concessions. I do not propose today, therefore, to press the sunset amendment. I believe that we have had a useful debate on the subject. Another place has considered the issue and rejected it and there the matter should lie.

I turn, therefore, to the issue of the sunrise clause. I thank the noble Baroness for her extremely constructive and helpful speech. The amendment we are debating is, as she will know, one to which we attach very great importance. We do so not through a desire to make life difficult but because of the intense anxiety that exists in local government, the voluntary sector and the NHS itself about the speed with which the legislation was to be introduced. I shall not rehearse the arguments at length; that has been done enough already. But in essence they boil down to two concerns: the need for local authorities to put in place the necessary human resources to enable them to deliver what is required of them on the ground, especially home care services; and the need to deal with issues emerging from the ombudsman's report and the Coughlan judgment to ensure that there are properly understood and consistent procedures in place throughout the health service to deal with decision-making about NHS-funded continuing care.

Twelve months, I believe, was the minimum period necessary to allow for those matters to be expedited in order for the Bill to stand a chance of achieving its aims even on a restricted definition. This very day I received a letter from the Local Government Association which urges this House to continue supporting the inclusion of my amendment within the Bill. I do not believe that the noble Baroness should be under any illusion about the strength of feeling "out there" about this matter. However, this is the second occasion on which the House has had to decide this issue. Another place has rejected the amendment that was carried here last month.

There is, I think, a natural limit to the parliamentary process in that sense. Today the Government have made a considerable effort to be conciliatory. That has to be recognised; I do recognise it. In an ideal world, I would have wished for a deferral of the financial penalties until April 2004. However, from debates in this House and from my private discussions with the Minister, I do not believe that that is an end result which the Government would ever concede. If I have understood the Minister correctly today, she has very considerably expanded the concession made in Committee by the noble Lord, Lord Hunt. She said that the Bill will come into operation on 1st October 2003 but that the operation of the financial incentives and penalties will not commence until 1st January 2004. At the same time, funding of £50 million will be made available to local authorities as if the scheme had been fully operational for a full six months of the next financial year. If that is a correct understanding of the Government's offer, it represents a considerable step in our direction, and it would not be a productive use of parliamentary time to call a further Division on the issue.

Will the Minister tell us how the sum of £50 million is to be distributed among local authorities? Will she also allow me to press her on the amount of money itself? She will know that there is real worry in local government about the shortage of resources in social services. Will she undertake to leave the door open on the possibility of increasing the amount of money available during the coming financial year? The LGA has estimated that, if £50 million is distributed from October or perhaps even sooner, as much as £35 million will be swallowed up in fines between January and April 2004. That would leave little for investment into building up capacity, which everyone agrees is the single most important task for local authorities in the coming months.

The compromise offered by the Government, although not everything that we could have wished for, is a significant step forward. I thank the Minister for that. I do not propose to ask the House to express a collective view on the issue a second time. I beg to move.

Moved, as an amendment to the Motion that the House do not insist on their Amendment No. 5 to which the Commons have disagreed for their reason numbered 5A, leave out "not"—.( Earl Howe.)

4.30 p.m.

Amendment No. 5B, as an amendment to the Motion, by leave withdrawn.

On Question, Motion agreed to.

6 Page 2, line 8, at end insert—

"and

(ii) has consulted with the patient (and in the case of a carer in relation to assessment under the Carers (Recognition and Services) Act 1995 (c. 12) and the Carers and Disabled Children Act 2000 (c. 16)) to ascertain their views and preferences, informed them of the reason for the notification, and obtained their informed consent or in the case where a patient lacks the mental capacity to give such consent, has recorded on the file what steps have been taken to ensure that the patient's best interests have been duly considered"

The Commons disagreed to this amendment for the following reason:

6A Because it is unnecessary to require consent for the giving of notices containing no personal information and because Lords Amendment No. 9 makes more appropriate provision for consultation.

6B Leave out "not".

The noble Baroness said: My Lords, I thank the Minister for that statement and for the helpful letter which the department sent last week to my noble friend Lord Clement-Jones. That letter set out many of the points that she has just made. I am glad that we have moved on from the position outlined in the draft regulations which seemed to give older people no say at all in the process. I believe that it is right to enable older people to have some influence in the process.

Always at the back of my mind was the fear that older people seeing the new system in operation as described at earlier stages would believe that if they went to hospital, nothing could be done to stop them going into an old people's home. That might seem an irrational fear to your Lordships but it is real to many older people. I am glad that it will be possible to explain to older people that such will not happen to them but that they or members of their family can be active participants.

I agree that many older people would like the opportunity of help from social services. Social workers can be of enormous help in explaining what is available. I hope that when the new system comes into force, there will still be room for flexibility and a human approach to older people in hospital—that we will not take away from nurses the ability to treat their patients holistically, which is part of good nursing. I am heartened by the Minister's comments. We have almost reached the point where I wanted us to be.

Moved, as an amendment to the Motion that this House do not insist on their Amendment No. 6 to which the Commons have disagreed for their reason numbered 6A, leave out "not.—( Baroness Barker.)

4.45 p.m.

Amendment No. 6B, as an amendment to the Motion, by leave, withdrawn.

On Question, Motion agreed to

14 Clause 3, page 2, line 41, after "consulting" insert "the patient and having obtained the informed consent of the patient or, in the case where a patient lacks the mental capacity to give such consent to the proposed care plan, having recorded on the file what steps have been taken to ensure that the patient's best interests have been duly considered, and after consulting"

The Commons disagreed to this amendment for the following Reason:

14A Because it is unnecessary to add additional requirements in relation to community care assessments under clause. 3(3) and it is undesirable to differentiate between assessments under clause 3(3) and other assessments carried out under section 47 of the National Health Service and Community Care Act 1990.

14B Leave out "not".

The noble Baroness said: My Lords, in moving the amendment I shall speak also to Amendments Nos. 15B, 16B and 18B with which it is grouped. Throughout the Bill's passage we have fought tooth and nail for consent. The basis for our arguments has been in many ways the Bill's architecture, which we on this side of the House have found far too weighted in favour of the NHS and against patients. There has been a sort of pendulum process. We saw that the Bill was weighted one way, we tabled a number of amendments that took it in the opposite direction, and perhaps now the pendulum has begun to swing back.

What we have done and why we have done it have been open to misinterpretation. Throughout our discussions we were trying to reach the key word in the Minister's statement: agreement. I am glad that she has come forward with a proposal for directions that are about agreement. In our discussions we have been motivated by a wish to empower patients. I confess that during our discussions the Government were slightly unlucky in that they caught me at a time when a friend who was in hospital took a bath only to return to find someone else in her bed. That rather coloured my views of some of the speeches.

I also want to take issue with a remark made in another place on 19th March. The Minister said:

"Whether hon. Members in another place are the people in the real world is questionable, but we have listened to people who operate in the real world".—[Official Report. Commons, 19/3/03; col. 975.]

I have a piece of evidence that will prove that that is not true. As everyone knows, in "The Archers", Mrs Antrobus has just returned home from a period of intermediate care, and the whole of Ambridge and the rest of us are desperate to know whether Roy and Hayley are going to manage to enable her to stay at home. I am afraid that it does not get more real than "The Archers".

These amendments, particularly the one on assessment, are about enabling older people to go through a process that is time-linked, centred on their needs, and at the end allows them to say if the services provided for them were not right. Throughout our discussions we have talked a great deal about where and when assessments will happen. I have accepted what Ministers said: that acute hospitals full of MRSA are not places in which to make decisions about the continuing needs and support of older citizens. "The Archers" had it absolutely right the other day: Mrs Antrobus was wondering whether she could manage.

I think it is true that the BBC is party to a political conspiracy. How it knew that in these two weeks in Parliament we would be focusing on Iraq and delayed discharge I do not know, but it is marvellous that it did. I am being flippant, but I am trying to hit at the heart of the Bill, which is about older people being in a process in which they are able to play a part rather than having things done to them for the convenience of others.

I take to heart what the Minister said about all reasonable steps. It was never our intention that family members could hole older people up in hospital so that they could never leave. We were talking about setting standards in reaching agreement with older people about their care packages. I listened to what the Minister said about mental incapacity. I am slightly disappointed and remain convinced that old people with Alzheimer's or dementia or who have had strokes may Find themselves disadvantaged by this process. We will look at the important mental incapacity legislation with extreme care. I welcome what the Minister said about consent and I shall welcome the contribution of other noble Lords.

On Question, Whether the amendment shall be agreed to?

[ Amendment No. 14B not moved.]

On Question, Motion agreed to.

15 Page 2, line 41, after "body" insert "and the qualifying patient"

The Commons disagreed to this amendment for the following reason:

15A Because it is unnecessary to add additional requirements in relation to community care assessments under clause 3(3) and it is undesirable to differentiate between assessments under clause 3(3) and other assessments carried out under section 47 of the National Health Service and Community Care Act 1990.

16 Page 2, line 42, at end insert—

"( ) Before making a decision under subsection (3), the responsible authority must—

(a) consult the patient and his carer, if he has one;

(b) inform them of the cost of the proposed care plans; and

(c) obtain the consent of the patient and any carer and, where informed consent is given, record that on the patient's file, or if a patient lacks the mental capacity to give such consent, record on the file what steps it has taken to ensure that the patient's best interests have been duly considered."

The Commons disagreed to this amendment for the following reason:

16A Because it is unnecessary to add additional requirements in relation to community care assessments under clause 3(3) and it is undesirable let differentiate between assessments under clause 3(3) and other assessments carried out under section 47 of the National Health Service and Community Care Act 1990.

18 Page 3, line 8, after "consulting" insert "the carer and obtaining the informed consent of the carer to the proposed care plan and after consulting"

The Commons disagreed to this amendment for the following reason:

18A Because it is unnecessary to add additional requirements in relation to carers' assessments under clause 3(4) and if is undesirable to differentiate between assessments under clause 3(4) and other assessments carried out under the Carers and Disabled Children Act 2000.

On Question, Motion agreed to.

23 Page 3, line 37, at end insert—

"( ) The responsible NHS body must give the patient and his carer, if he has one—

(a) notice of the day on which it proposes to discharge the patient, and where informed consent is given, record that on the patient's file, or if a patient lacks the mental capacity to give such consent, record on the tile what steps it has taken to ensure that the patient's best interests have been duly considered, and

(b) information about their right to request a review if they disagree with the decision to discharge."

The Commons disagreed to this amendment for the following reason:

23A Because the decision to discharge should not be subject to the consent of the patient and it is undesirable to discriminate on this issue between patients who are subject to the Bill and other hospital patients.

[ Amendment No. 23B not moved.]

On Question, Motion agreed to.

24 Page 3, line 45, at end insert—

"( ) The Secretary of State shall specify to the bodies charged with inspection of health and social services that they should monitor, at regular intervals, the impact of this Act on patients and their carers."

The Commons disagreed to this amendment for the following reason:

24A Because the inspection and monitoring system for health and social care services is adequate and the amendment is unnecessary.