Wednesday, April 05, 2006

Government's new Compensation Bill - First Clause to be scrapped?

The first clause of the Government's new Compensation Bill "is unnecessary and may prove harmful". This is the conclusion of the Commons Constitutional Affairs Committee's inquiry into the UK compensation system. The clause stipulates:

"A court considering a claim in negligence may, in determining whether the defendant should have taken particular steps to meet the standard of care (whether by taking precautions against a risk or otherwise), have regard to whether a requirement to take those steps might -

(a) prevent a desirable activity from being undertaken at all, to a particualr extent or in a particular way, or

(b) discourage persons from undertaking functions in connection with a desirable activity."

The Government's aim in proposing this rule is to ensure that people undertake 'normal activity' (Baroness Ashton of Upholland) without fear of litigation. The Government argues that the provision "reflects the existing law and approach of the courts as expressed in recent judgements of the higher courts" (Explanatory Note to the Bill) (probably referring to the House of Lords judgement in Tomlinson v Congleton Borough Council [2004]). The idea for the provision arose no doubt from the recent 'compensation culture' debate. The Commons Committee concluded that there was no evidence of increase in personal injury litigation, but there certainly was a 'perception of compensation culture'. The Committee did not see the revision of the law of negligence as capable of tackling this perception. It concluded that the application of the rule would be very limited (only negligence and not tort in general, only determination of standard of care and not determination of the existence of duty). It also pointed out that the effect of the provision was not certain, and it was rather likely that the immediate effect might be to lead to additional litigation.

(Please watch this space for our more comprehensive review of the Commons Committee's Inquiry into the UK compensation system - in particular - the conditional fee agreements, excessive risk aversion, the Compensation Bill and the NHS Redress Bill. The Report is available on the website of the Committee: