CIVIL LIABILITY

(ROYAL COMMISSION'S REPORT)

The Prime Minister (Mr. James Callaghan)

With permission, Mr. Speaker, I wish to make a statement. The report of the Royal Commission on Civil Liability and Compensation for Personal Injury has [column 637]been published today and copies are now available in the Vote Office.

The Royal Commission was established five years ago to examine our present practice for compensation for personal injuries, including the particular concern felt about children injured through thalidomide.

The Government are grateful to Lord Pearson and his colleagues for the work and for the comprehensive report which they have now produced. It contains numerous recommendations for change. The main recommendations are as follows.

Two systems of compensation for personal injury through civil liability and through social security should continue to exist side by side but with an altered relationship, and that social security should be recognised as the principal means of compensation.

A no-fault scheme of State compensation should be introduced for road accidents involving vehicles, to be financed by a levy on petrol. This would provide benefit in respect of injuries, irrespective of blame.

The manufacturers should be strictly liable—that is without proof of negligence—for injuries caused by defective products.

A new State benefit should be introduced for all severely handicapped children whatever the cause of their handicap.

The Government or local authority concerned should be strictly liable for severe damage caused by vaccination where vaccination was recommended in the interests of the community.

The industrial injuries scheme should be extended to cover the self-employed and certain benefits of the scheme should be increased at the expense of employers.

Social security benefits should be fully offset in assessing damages awarded by the courts for personal injuries.

The House will see that the Royal Commission's proposals are far-reaching, having important implications for consumers, manufacturers, employers, employees, trade unions, motorists, insurers and handicapped children. The Government will therefore [column 638]study the recommendations with care and urgency and consult interested organisations as appropriate. In reaching their decision the Government will have regard to the public expenditure cost of implementing the proposals, which could be considerable.

As the House will recall, the Government have already announced their commitment to introduce a scheme of payments for severe damage caused by vaccination. Decisions on the form of the scheme have been awaiting the Royal Commission's report. As soon as the relevant recommendations have been considered—and this will be done as a matter of urgency—my right hon. Friend the Secretary of State for Social Services will make a further statement.

Mrs. Thatcher

Is James Callaghanthe Prime Minister aware that it is not possible to make any detailed comment on this very far-reaching report without very considerable study and consultation on the part of us all, especially where the Commission is suggesting a wide range of compensation without any need to prove liability? I should like, therefore, to ask him about just two points.

First, do the recommendations on injuries caused by defective products—I imagine that some of them are meant to go towards thalidomide cases—include recommendations about the unborn child?

Secondly, does the report include details of the financial implications, both the public finance and the kind of cost that the self-employed will have to face if they are to provide cover? Are all the financial implications calculated in the report?

The Prime Minister

I can answer the second question. There is a total placed on the cost, and that is £130 million, but I have not yet gone into the details of how that has been calculated. That would be part of public expenditure.

As regards the unborn child, there is a substantial statement on that in the report, but I would prefer not to go into that as I do not want to mislead the House and I want to be absolutely sure of the recommendation.

Mr. Abse

I am sure that many of the recommendations that have been indicated by the Prime Minister will prove to be welcome, but his announcement that [column 639]the Commission is recommending that social security payments should be taken into full account when damages are awarded is bound to bring concern to trade unions in particular, bearing in mind that the damages that are received in the courts of this country at present are so much lower in the case of injured workmen than they are in most other sophisticated countries. I hope that the Government will give particular consideration to this matter.

Secondly, while there may be many attractions in a no-fault scheme, will not the Prime Minister acknowledge that it is important to realise that it is a scheme which, apart from causing an increase in the price of petrol, could have burgeoning bureaucracy and could be a scheme which could mean that the reckless could benefit as a result of the care of other motorists? These matters require great surveillance.

The Prime Minister

My hon. Friend has great experience on the first point that he has raised. I have not read the full report, but as soon as I read certain extracts I realised that this would be a matter of great concern, as also would my hon. Friend's second point.

My hon. Friend's second question on motor vehicle injury is well argued in the report. I am sure that my hon. Friend will read it with care. This illustrates the need for the Government to be very careful in their further consideration and to receive representations from any groups that wish to put them to us. At the same time, some of these recommendations are so valuable that I would not like to see them delayed indefinitely. A whole range of Ministers is involved here, and I would ask them to get ahead with their consultations as quickly as they can.

Mr. Hooson

The report is very welcome, indicating a cautious advance in the direction of not having to establish blame in order to obtain compensation. Nevertheless, the report took five years to prepare, and I hope that it will not take five years to implement its recommendations. Will the Prime Minister ensure that time is found for a debate before the end of this Session? The Government might then indicate the priorities. There are very varied recommendations. Some could be implemented fairly easily, whereas others are very complicated.

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The Prime Minister

Without committing myself, I should like to consider that suggestion sympathetically, because the report goes into many new fields which concern many people. Three months is not long for a Government to consider these matters, I would want Ministers to have a proper opportunity of consultation, but I should like to consider whether we can have at least a preliminary debate and make some preliminary indications before the Summer Recess—if, by saying that, I have not got myself into too much trouble with my right hon. Friend the Leader of the House.

Mr. Ashley

Following his welcome statement, will my right hon. Friend ensure that the proposal for helping disabled children will be not only adequate but generous? Is my right hon. Friend aware that while I welcome the proposal for strict liability for drug damage, it would be outrageous to insist that vaccine-damage children must go through the courts to define that strict liability—not prove it, but define it? There are reports that Pearson suggests that. Therefore, will my right hon. Friend set up an independent board to consider the question of strict liability, in addition to honouring the proposal for compensation for children already damaged by vaccines?

The Prime Minister

I am aware of my hon. Friend's great interest in the matter, and I thank him for all the work he has done. He will find that reference is made in the report to his work in this matter. The Government are giving urgent consideration to the scheme that we shall produce in respect to these children, but we are also having parallel consideration of the general recommendations made by the Royal Commission in respect of the great body of children.

Mr. Wigley

Is the Prime Minister aware of the great disappointment and dismay that will be felt by slate quarry workers suffering from pneumoconiosis and silicosis, whose appeal for a compensation scheme similar to the coalminers' has been rejected by the Pearson Commission? Is the right hon. Gentleman aware that time after time the Government have put off a compensation scheme for those people until the [column 641]appearance of the report? Does he recall his words on 8th July 1976—

“In logic, there is very little reason why remedy should be limited to coalminers.” —[Official Report, 8th July 1976; Vol. 914, c. 15597.]

In those circumstances, can the Prime Minister give an assurance that the Government will consider a scheme for quarrymen irrespective of the Pearson Commission report?

The Prime Minister

It would be wrong for me to give such an assurance this afternoon. One of the parts of the report to which I turned was that on the question of compensation for slate quarrymen. I saw the argument produced in the report. I shall not go into that argument now, because all that I am doing is to report on the Royal Commission, which has found against a special scheme for slate quarrymen for reasons that it considers to be good. We shall certainly consider the matter, but we shall weigh what is said by the Royal Commission on this subject.

Mr. Douglas-Mann

Is my right hon. Friend aware that the very welcome proposals for no-fault liability for road accidents will bring an entitlement to compensation to about 200,000 people, victims of road accidents, who receive no compensation now, but that the deferment of any action with regard to industrial injuries will leave about 480,000 people, three-quarters of the 600,000-odd who suffer industrial accidents every year, without compensation? Is my right hon. Friend also aware that proposals were put to the Royal Commission which would have enabled full compensation to be paid to such people with no increased cost to public funds? Will he indicate to the House the nature of the objections that caused the Royal Commission to defer taking action on the industrial injury proposals?

The Prime Minister

It would be preferable if my hon. Friend and other hon. Members would read the report first and then we could have questions put and the Government's views on it extracted.

Mr. Fairbairn

Does the Prime Minister appreciate that when the Government are considering the matter—as the right hon. Gentleman has said, they will have to do so very carefully—they should [column 642]bear in mind that if one opens the door to the no-fault liability concept there are grave dangers that those with disadvantages such as having only one eye or one leg, through birth, illness or accident, may also have to be compensated, in equity?

The Prime Minister

I note the hon. and learned Gentleman's point. I am sure that Ministers will be glad to have such points and bear them in mind.

Mr. Carter-Jones

I give qualified support to the Pearson Report. Will the benefits for disabled children be given without being subject to taxation? Is my right hon. Friend aware that our intention was to give disabled housewives a non-contributory invalidity pension, but that the poorest of the disabled housewives had it knocked off their supplementary benefit? Will my right hon. Friend give an assurance that that will not happen to the disabled children?

The Prime Minister

The Government have introduced a number of benefits for disabled people generally, including benefits for handicapped children, but I cannot this afternoon go into the tax provisions of another proposal that has been made in the Royal Commission report. We must have time to consider that.

Several Hon. Members

rose——

Mr. Speaker

I propose to take four more questions from each side of the Chamber. It is an important statement, but we cannot debate it now.

Mr. Burden

Will the Prime Minister give early consideration to the proposals for State help for handicapped children? I ask because undoubtedly many of the thalidomide children will now be reaching a stage at which their educational opportunities should be seriously considered, as with the mentally handicapped children. This is an area that should be dealt with promptly. Will the Prime Minister give an undertaking that the recommendations about handicapped children will receive special consideration by him and his right hon. Friend the Secretary of State for Social Services?

The Prime Minister

Yes, Sir. I certainly give that undertaking. Apart from child benefits, there are attendance allowances at present, and handicapped children have access to the full range of health [column 643]and social services. If there are gaps in them, I shall ask the Ministers concerned to look at them.

Mr. Thompson

Is the Prime Minister aware of the differences in the levels of award given, on the one hand, by the courts in Scotland and, on the other hand, in the courts of England and Wales? Has the Royal Commission been able to make any suggestion for a levelling out of those differences?

The Prime Minister

The hon. Gentleman will understand that, as there are more than 550 pages in the report and as I received it the day before yesterday, I cannot answer his question.

Mr. Ward

Is my right hon. Friend aware that hon. Members who have tried to obtain copies of this most welcome report find that Volume 1 is not available in the Vote Office? Will he take steps to see that such delays do not recur on important occasions of this kind?

The Prime Minister

Certainly, Sir. I am very sorry to hear what my hon. Friend says. I do not personally deliver copies, but I shall inquire why they were not there when I was told to say that they were.

Mr. Graham Page

May I press the Prime Minister on the question of a debate? Will he consult the House before all the consultations with outside bodies are complete and not wait for their completion? In the circumstances, will the right hon. Gentleman find time for a Private Member's Bill on no-fault liability, in the name of the right hon. Member for Crosby, already before the House?

The Prime Minister

I cannot go further than I have already gone on either of those questions. The matter of a debate can be discussed through the usual channels. As regards the right hon. Gentleman's Bill, I am sure that my right hon. Friend the Leader of the House is sympathetic to all Bills at all times.

Mr. Alexander W. Lyon

Does my right hon. Friend recognise that to extend no-fault liability only to those injured in road accidents would increase the sense of injustice felt by those injured at work or [column 644]in the home? Is it not unfortunate that after so much consideration we should lose the chance to go over to something like the New Zealand scheme, which is totally comprehensive and is bound to be cheaper than the present system because one saves on the lawyers' fees?

The Prime Minister

The Royal Commission has examined the scheme and has given its views on it. I suggest that my hon. Friend should study them and see whether that study modifies his conclusions in any way.

Mr. Christopher Price

In as much as my right hon. Friend gets opposition to no-fault liability substantially from the legal profession, will he be very wary of that, bearing in mind that the extra public expenditure related to these schemes could be very much compensated by the smaller amount of money flowing into the pockets of the lawyers?

The Prime Minister

I do not want to make enemies of the lawyers. There are too many in this House—[Hon. Members: “Oh.” ] I had not finished the sentence. There are too many of them in this House for me to quarrel with them. But I certainly share some of my hon. Friend's views about this, and I should like to think that some of the fees which now go to the legal profession could be diverted to channels in which they would perhaps do even more good.

Mr. Wyn Roberts

With reference to the Prime Minister's reply to the hon. Member for Caernarvon (Mr. Wigley), he is no doubt aware that the problem of silicosis among quarrymen has agitated North Wales Members on both sides of the House. Is it not clear from the report, and from the Prime Minister's reply, that a special scheme for slate quarrymen will have to be devised, just as there is one for sufferers from pneumoconiosis in the coal pits and sufferers from byssinosis in other industries?

The Prime Minister

I take note of the hon. Gentleman's views, but I am here to report on the Royal Commission's findings and its arguments, and I cannot go further than that today. I am sure that the argument will continue. I am well aware that my hon. Friends and Opposition Members have followed the health problems of slate quarrymen very carefully, as I have myself, but the Royal [column 645]Commission has made a recommendation, I am reporting back to the House, and consideration will now have to begin.

Mr. John Evans

Will the Prime Minister confirm that employers' liability for defective products goes much wider than the question of thalidomide damage to children? Is he aware that there is a Common Market regulation on employers' liability at present before the European institutions? If the Government are to legislate, will my right hon. Friend ensure that there is comparability between the two schemes?

The Prime Minister

I am aware of this draft directive. We shall take it into account in any recommendation we make and try to make the two comparable.