Damages (Scotland) Bill: Stage 2
We turn to item 3, which is the Damages (Scotland) Bill. Today is the only planned day of stage 2 proceedings of the bill, and there are 17 amendments in six groups.
I welcome Bill Butler MSP, who has moved from his usual position as the deputy convener and my right-hand man to take another seat, as he is now attending the meeting in his capacity as the member in charge of the bill. I welcome Claire Baker MSP, who is substituting for Bill Butler as a member of the committee for this item only. I also welcome Maureen Watt MSP, who is substituting for Stewart Maxwell, who is unwell. Finally, I welcome the Minister for Community Safety, Fergus Ewing MSP. Mr Ewing is accompanied by Scottish Government officials and Mr Butler is accompanied by representatives of Thompsons Solicitors, who have no locus to speak during the proceedings but are welcome nonetheless. We do not expect any other MSPs to attend.
Members should have their copy of the bill, the marshalled list and the groupings of amendments for consideration. We will proceed to go through the various amendments seriatim.
Before section 1
Group 1 is on the principle to apply to an award of damages. Amendment 14, in the name of Robert Brown, is the only amendment in the group.
I congratulate Bill Butler on his persistence in taking forward the bill and his co-operation with other members of the committee in doing so.
Amendment 14 is not intended to do much more than to state a principle. A number of provisions in the bill define how damages are to be calculated and move things along a bit, but it is important to show that our aim in dealing with damages more quickly and more efficiently is to achieve the basic principle of restoring victims to the position that they were in—as far as money can do that—before the accident, incident or wrongful act occurred. I am interested to hear Mr Butler’s view and the minister’s view on whether it would help to state at the start of the bill that that principle continues to be the law.
Against that background, I move amendment 14.
I will make a brief comment in passing. The thought process behind the amendment is praiseworthy, but I would have thought that what it seeks could be regarded as inherent in the bill. However, I will listen to the arguments.
My view is similar to yours, convener. I do not necessarily disagree with Robert Brown, but I am not persuaded of the need for the amendment, because the principle that it outlines is covered more specifically throughout the bill.
First of all, I should say that, following my undertaking to Parliament in the stage 1 debate on the bill, I have had extremely helpful discussions with Mr Butler about today’s business and most of the amendments that are before us.
On amendment 14, in the name of Mr Brown, I see the attraction of restating what we all agree is the basic principle of the law of delict. If the committee will indulge me, I point out that the formulation appears to have its origins in Lord Blackburn’s judgment in the case of Livingstone v Rawyards Coal Company in 1880, which refers to
“that sum of money which will put the party who has been injured, or who has suffered, in the same position as he would have been in if he had not sustained the wrong for which he is now getting his compensation or reparation.”
Although that general statement of principle appears to have stood the test of time, I do not think that this bill is the place for setting out general principles for the law of delict as a whole, given that it deals with only a tiny proportion of personal injury claims.
This will be the fourth time that the Scottish Parliament has amended the law on damages, the previous occasions being the Family Law (Scotland) Act 2006, the Rights of Relatives to Damages (Mesothelioma) (Scotland) Act 2007 and the Damages (Asbestos-related Conditions) (Scotland) Act 2009. Each of those acts deals with a small area of the law of damages and none of them—indeed, not even those introduced when Mr Brown was Deputy Minister for Education and Young People—includes any generic statements of principles such as that suggested in the amendment. The central thrust of the bill is to move away from calculating actual damages towards a fixed formula. There are good reasons for such a move but, of course, it departs from the principles set out in the amendment and, as with most statements of general principle, there are already important exceptions that have been developed through the common law, including the body of law relating to the duty on those who have suffered injury to mitigate their own loss and to the remoteness of damages.
To illustrate the point, I draw the committee’s attention to section 10 of the Administration of Justice Act 1982, which relates to payments to an injured person that are not to be taken into account in the quantification of damages. Paragraph (a) thereof applies to contractual pensions.
Let us take, for example, an employee who suffers an accident at work at the age of 55, as a result of which he is left unable to work again. But for his injury, he would have worked to the age of 60. However, as a result of his incapacity, his employers terminate his employment. Under the occupational pension scheme, he is immediately eligible for a pension that is paid at the rate of 30 per cent of his previous income. As a result of section 10 of the 1982 act, the pension has to be left out of account when damages are quantified. The injured man will therefore receive damages for loss of earnings equivalent to 100 per cent of his net income for five years, even though his actual loss is only 70 per cent of that figure.
I am not suggesting that Robert Brown’s amendment is inconsistent with section 10 of the 1982 act—it seems likely that that section would prevail—but the fact that the proposed provision is made subject only to the ensuing provision of the bill, not to revisions of other acts or any established common-law exceptions to the general rule, seems to create the scope for unintended consequences, which is a possibility that cannot be excluded in the short time that is available.
For all those reasons, I ask the committee to reject amendment 14.
I thank Robert Brown and the minister for their kind words and, indeed, thank Robert Brown for lodging amendment 14 and thereby giving us a chance to debate and discuss the principle.
The principle to which Robert Brown refers has been applied in common law by our courts for many years in decisions on how much should be awarded to the victim of a wrongful act. However, in its “Report on Damages for Wrongful Death”, the Scottish Law Commission has recognised that damages for wrongful death have reached the point
“where the current law no longer reflects the realities, in particular the economic realities, of contemporary family structures in Scotland.”
It said that
“the law has become anachronistic and ... over-complex”
and that legislation is needed to provide “greater clarity and accuracy”.
We cannot put people in fatal cases back into the position in which they would have been had the wrongful act not occurred. However, the bill seeks to reform the present law and meet the commission’s criticisms. Given that we are doing so not through common law but through an act of the Scottish Parliament, I do not think that it is helpful for the bill to refer to common-law principles.
I will spell out my concerns about the Government’s amendment to section 7(1)(b) and about common law being given a place in the interpretation of the proposed legislation later in the proceedings.
Robert Brown’s amendment 14 seems to be saying that although we are setting out what we now want the courts to do, they still have to have regard to the common law. The same danger therefore arises that the common law could be given a place in interpreting the bill by the back door. With respect, I do not think that Mr Brown’s amendment adds anything to the bill and, although I know that it is not his intention, it could undermine how the bill is interpreted by the courts. Given that, I respectfully request that Robert Brown withdraws amendment 14. If he presses it, I ask committee members to vote against it.
11:45
The discussion has been useful, and it has been particularly helpful to have the minister state on the record that the common-law principles will still underlie these matters. I am slightly bothered by some of Bill Butler’s comments, because the common law will continue in existing law and practice to influence the way in which the law is applied and set the framework, subject to the changes that will be made by the bill. I do not altogether accept Bill Butler’s comments.
However, I accept the potential for unintended consequences, and that it is not always helpful to set out principles. Against that background, I ask the committee to allow me to withdraw amendment 14, given the minister’s statement about the way in which the matter will be approached more generally.
Amendment 14, by agreement, withdrawn.
Section 1—Damages to injured person whose expectation of life is diminished
Amendment 1, in the name of the minister, is grouped with amendment 7.
The committee’s stage 1 report concluded:
“If a rebuttable presumption could be drafted in such a way that it provides flexibility only when it is needed, without undermining the benefits of a fixed deduction in the majority of cases, it might still offer the best way forward.”
Amendments 1 and 7 introduce general flexibility to depart from the fixed formula, but they require a very high test to be reached. The case cannot just be a special case; it must be a truly exceptional case in which the application of the standard formula would lead to manifest and material unfairness. Under that approach, the result of applying the standard percentage would have to be manifestly unfair. In other words, it would have to be evidently and obviously unfair.
The concept of manifest unfairness is already familiar to the courts in the context of the test that must be applied to an appeal before an appeal court will interfere with the discretionary decision that was taken by the judge at first instance. In that context, it is taken to mean that the hurdle that is to be overcome by an appellant is a high one, and the appeal court will not interfere simply because it would have arrived at a different decision on the same facts.
The result of applying the standard percentage would also have to be materially unfair. The degree of unfairness, therefore, must be material. It is implicit that the fact that a defender might end up paying a bit more in damages to relatives than the actual amount of support does not necessarily justify a departure from the standard percentage.
Finally, the court can substitute a different percentage only if it is satisfied that it is necessary to do so to avoid
“a manifestly and materially unfair result”.
Amendment 1 will introduce that test in section 1, in the context of claims that are brought by victims of injury or disease whose expectation of life has been diminished. Amendment 7 will have the corresponding effect to amendment 1 in relation to claims that are brought by relatives for loss of the financial support that would have been provided by the deceased. It will therefore allow the court to substitute a different percentage from that which is specified in section 7(1)(a)—[Interruption.]—but only if it is satisfied that it is necessary to do so to avoid
“a manifestly and materially unfair result”.
I move amendment 1.
I think that someone has a mobile phone switched on. Please check that all phones are switched off.
In supporting the minister’s amendments 1 and 7, I state for the record that I have accepted the need for a workable compromise on this important matter. I have accepted the committee’s advice, as outlined at paragraph 107 of its stage 1 report, that
“putting the 25% deduction”
for the victim’s living expenses
“into statute, but as a rebuttable presumption ... may be the only way of allowing the courts enough flexibility to deal fairly with the genuinely unusual case. If a rebuttable presumption could be drafted in such a way that it provides flexibility only when it is needed, without undermining the benefits of a fixed deduction in the majority of cases, it might still offer the best way forward. The Committee therefore urges Mr Butler and the Scottish Government to engage constructively in consideration of this question.”
We have engaged so constructively that one would think that my note is almost the same as the minister’s, but there has been no collusion in that regard, although there has been co-operation. Our constructive engagement began after the stage 1 debate on 15 December, and productive discussions have taken place over a number of meetings.
To be frank, I am still apprehensive about proceeding in the fashion proposed by the committee, but I have accepted the committee’s main concern that everything possible must be done with regard to “the genuinely unusual case” to avoid an inappropriate level of compensation.
I agree that the minister’s amendment 1 places the onus on those who wish to challenge the normal 25 per cent deduction as “manifestly and materially unfair” to make the argument as to why their client’s case is “genuinely unusual”.
The minister will recall that we discussed an amendment that would set out a shortlist of specifically enumerated exceptions. On balance, I feel that the Government’s approach is clearer and avoids the difficulties of setting down a list of exceptions in statute, which I will not go into, as members know about them.
On that basis, I urge members to support amendments 1 and 7—amendment 7 being the obverse, in that it refers to the loss of financial support and the 75 per cent figure.
I am happy to rest on my opening remarks. I confirm that Mr Butler is correct: we have had positive and constructive engagement, following the committee’s recommendation in its report that we do so. I am pleased that we have reached what appears to be the best approach and the most sensible outcome.
Amendment 1 agreed to.
Section 1, as amended, agreed to.
Sections 2 and 3 agreed to.
Section 4—Sums of damages payable to relatives
Group 3 is on the rights of relatives and related definitions. Amendment 2, in the name of the minister, is grouped with amendments 4 and 8 to 11.
Amendments 2, 4 and 8 to 11 relate to the rights of relatives to claim damages as a result of wrongful death. Currently, under the Damages (Scotland) Act 1976, the categories of relatives in fatal claims who are entitled to claim damages for loss of financial support differ from the categories of those who are entitled to claim damages for grief, sorrow and loss of society. Damages for loss of financial support may be claimed by any relative as defined in the 1976 act, while damages for non-patrimonial loss may be claimed only by members of the deceased’s immediate family.
Under the bill, the only relatives who are entitled to claim damages for either loss of support or non-patrimonial loss are those who are currently classed as the immediate family. The committee agreed in its stage 1 report with the majority of witnesses that that proposal would unfairly remove the existing right of certain relatives other than those who are defined as immediate family to claim for damages if they could show that they were supported by the victim. Amendments 2, 4 and 8 to 11 revert the position to that under the 1976 act.
I move amendment 2.
Amendments 2, 4 and 8 to 11 will return the list of those who are entitled to claim compensation to the list that is contained in schedule 1 to the 1976 act. As members will recall, I agreed during the stage 1 debate to reconsider this matter. I agree that the list of those who are entitled to compensation has been drawn too narrowly. I refer specifically to the example of the nephew or niece, which many members brought up—I particularly recall Mr Maxwell bringing it up.
I also stated that I felt that enlarging the list of those who are entitled to claim so that it was very wide would, as some witnesses appeared to argue, be inappropriate. That concurs with the committee’s view as expressed in paragraph 190 of its stage 1 report—I will not quote it entirely. Amendments 2, 4 and 8 to 11, which will return us to the list that is contained in the 1976 act, strike the right balance and the right chord. I ask members of the committee to support them.
Mr Ewing, do you wish simply to adopt your previous arguments?
I do, convener.
Amendment 2 agreed to.
We come to group 4, which is on section 4(2)(b) awards: name and application to cases of mental disorder. Amendment 3, in the name of the minister, is grouped with amendments 5 and 12.
Amendments 3, 5 and 12 relate to relatives’ claims for non-patrimonial loss under section 4. Section 4(3)(a) provides that an award of damages under section 4(2)(b) is to be known as a “grief and companionship award”. At stage 1, the committee concluded that it was preferable not to fix a name for the award in statute, given the doubts expressed by witnesses and the clear lack of consensus about the proposed name of the award.
Section 4(3)(b) provides that an award of damages under section 4(2)(b) is not to be made in respect of any mental disorder suffered by a relative in consequence of the death of the deceased. The committee considered the proposed exclusion of mental disorder at stage 1. It concluded that it would not be appropriate for the Parliament to make a decision on whether mental disorder should be excluded as there is currently conflicting case law on this point, as well as conflicting opinion among stakeholders.
The Scottish Government plans to carry out a consultation exercise on the broad area of damages for psychiatric injury, therefore any determination might be more appropriately left to a decision of the inner house or the outcome of the consultation. Amendment 3 therefore will delete section 4(3). Amendment 5 will delete section 4(5)—it is consequential on amendment 3. Amendment 12 will alter section 14(3) by substituting for “grief and companionship award” a reference to an award under section 4(2)(b). That is also consequential on amendment 3.
I move amendment 3.
I support the general thrust of the amendments, particularly the change of name and the putting to one side of the mental health element.
On amendment 12, is it necessary to have such a reference at all? One would have thought that what was being talked about was manifest. Whatever our doubts about the name, references to awards under section 4(2)(b) do not altogether add clarity to obscurity, if I may say so. Might it have been better to delete section 14(3)?
Mr Butler and the minister will both have an opportunity to deal with that aspect. I invite Mr Butler to answer Robert Brown’s questions.
I will try to do so, convener. All the amendments in the group are worthy of support. I think that I see where Robert Brown is coming from, but I do not share his concern. Amendment 12 ties in with amendment 3—I do not see it as a great deal more than a tidying-up amendment. The amendments do what the committee urged us to do by taking out the idea of a grief and companionship award, because it was not felt that that was the way to go. The committee stated in paragraph 123 of its stage 1 report that we should retain
“the established approach of not fixing a name in statute”.
I agree that that is correct.
The deletion of references to “mental disorder” is appropriate. I do not think that anyone disagreed that the provisions in question were in danger of widening the scope of the bill, or that psychiatric damage and mental disorder are issues that deserve a separate bill and should not be tacked on to the Damages (Scotland) Bill.
Amendments 3, 5 and 12, in the name of the minister, address the concerns of the committee and witnesses on both issues. I urge members to support them.
12:00
Minister, I invite you to wind up the debate and deal with Mr Brown’s points—you might well adopt the arguments that Mr Butler advanced.
I think that there is broad agreement that the description of an award that is made under section 4(2)(b) as a “grief and companionship award” is inappropriate, given the evidence that the committee received from a wide variety of sources. Mr Brown asked whether amendment 12, which would delete that phrase and replace it with
“an award under paragraph (b) of section 4(2)”,
is necessary. We will consider the matter again, in case we have overlooked anything, but it appears to us that it is necessary to be clear what award we are talking about—that is, an award under section 4(2)(b)—for the purposes of interpretation of the statute and previous law. In other words, it is necessary for the sake of accuracy and clarity to have a clear statement of what the award is, and rather than give the award a descriptive title we would refer to it by its numerical reference in the statute. We think that the approach is necessary and sensible, but we will double check the matter before stage 3, and if other points occur to us we will write to the committee.
That would be appropriate.
Amendment 3 agreed to.
Amendments 4 and 5 moved—[Fergus Ewing]—and agreed to.
Section 4, as amended, agreed to.
Sections 5 and 6 agreed to.
Section 7—Assessment of compensation for loss of support
Amendment 6, in the name of the minister, is grouped with amendment 15.
Excuse me for a second, convener. I think that my papers are in slightly the wrong order.
We can suspend the meeting briefly—
It is okay, convener. I have found the papers; they were incorrectly numbered.
Amendment 6 would remove the stipulation in section 7(1)(b) that, in the context of claims made by relatives for loss of support,
“a relative’s income is to be disregarded”.
Amendment 15, in Mr Butler’s name, would reintroduce the requirement later in the section. I should point out that it would be nonsense to reject amendment 6 but support amendment 15, because that would mean that the requirement was included twice. However, drafting issues in amendment 15 are such that the amendment would not deliver what I understand to be its aim.
The Government agrees that a relative’s income should be disregarded, except when that would lead to a manifestly and materially unfair result. In the limited circumstances that we are considering, a court should be able to have regard to a relative’s income in determining the appropriate percentage to be substituted. That is what the bill will deliver if amendment 6 is agreed to and amendment 15 is disagreed to.
The issue is complex and I hope that the committee will bear with me while I give a detailed explanation.
Section 7(1)(b) appears to have been included in the bill to discontinue the use of what has become known as the Brown v Ferguson formula. Under that approach, the court looks at the combined net income of the deceased and the surviving spouse and determines what part of the combined total was spent on supporting the surviving spouse and children. The net income of the surviving spouse is deducted from the total to arrive at the level of financial support that the deceased provided to his family. That figure is then used as the multiplicand in the assessment of damages. The Government shares the view that that approach should be discontinued, but the bill will achieve that in the absence of section 7(1)(b). If amendment 6 is not agreed to, the continued presence of section 7(1)(b) could have adverse consequences.
The effect of section 7 will be that whenever a deceased is survived by a spouse, civil partner, cohabiting partner or dependent child, those relatives and any more remote relatives who are entitled to claim will share between them damages for loss of financial support that are calculated on the basis that they were being supported at the rate of 75 per cent of the deceased’s net income. That is the result of section 7(1)(d), in which it is provided that the 75 per cent is to be taken to have been spent by the deceased in supporting his relatives. It is difficult to see how that could be interpreted in a way that would allow the courts to do anything other than use that as the measure of damages. In other words, it is no longer open to argue that the Brown v Ferguson formula is of any relevance. Quite simply, section 7(1)(b) is not needed for that purpose.
As we have seen, the effect of amendment 7 is that the court would be allowed to substitute a different percentage for the 75 per cent that is specified in section 7(1)(a), but only when it was satisfied that it was necessary to do so to avoid
“a manifestly and materially unfair result”.
As I have already explained, that is a high hurdle. The effect of section 7(1)(b) and what I understand to be the intent behind Mr Butler’s amendment 15 is that the court would not be able to take the relative’s income into account here, regardless of the impact that that exclusion might have. There seems to be no logic in excluding that particular factor from consideration. I take the view that it is important that the courts should be allowed to take all the circumstances into account, including the surviving spouse’s income, in considering whether application of the figure of 75 per cent would give rise to
“a manifestly and materially unfair result”.
It might help to consider the impact that that choice might have. The examples that the Forum of Scottish Claims Managers provided in its submission to the committee suggest that when the victim had a greater income than the surviving partner, the increase in the amount of compensation payable under the bill would be relatively small, but that when the surviving partner’s income was, say, double that of the victim, the amount of compensation payable could be as much as three times greater than it would have been before the introduction of the bill. It is such cases, particularly when the surviving partner’s income is substantial, that drive the very large potential cost figures that the FSCM gave the committee. I am not saying that such increases in compensation are automatically unfair, but allowing the courts to consider the issue may tackle the most manifest cases of overcompensation that the use of a fixed formula may introduce.
Amendment 6 has been lodged on the basis that, in practice, the only situations in which a court would be allowed to have regard to the income of the surviving spouse would be in deciding whether, in the circumstances of the case, the application of the standard 75 per cent would bring about a manifestly and materially unfair result; and in those cases in which it would bring about a manifestly and materially unfair result, in deciding what percentage should be used instead.
I also mentioned issues around the drafting of amendment 15, which I think make it unlikely to deliver what I believe to be Mr Butler’s intentions. The effect of amendment 15 would not be to prevent the court from taking a relative’s income into account in deciding whether the fixed formula would deliver a manifestly and materially unfair result. Instead, it would prevent the court from taking the relative’s income into account in determining what the correct alternative percentage might be. Therefore, I respectfully ask Mr Butler not to move amendment 15, and I hope that the committee will support amendment 6.
I move amendment 6.
The issue at stake is that a relative’s income should be disregarded in the calculation of a claim. In the evidence that the committee took there was strong support from a number of sources for a relative’s income to be disregarded. The bill provides certainty in the calculation, which is what victims and the courts are looking for. To take out section 7(1)(b) could create confusion in the calculations, and we should not do that.
The minister said that the provision for disregarding a relative’s income would not apply where the judgment was that that would be manifestly unfair. I am not convinced that the amendment would deliver that effect. I oppose the minister’s amendment 6 and support Bill Butler’s amendment 15.
This is a complex issue and I am not entirely certain that I have followed all the ramifications. I am inclined to support the minister. As the minister said, it is difficult to see that in the normal case where the 75 per cent rule is applied a relative’s income would come into the matter—I do not see how that provision can be interpreted in that way. If there is any doubt about that, the minister’s statement on the record would assist interpretation of that aspect.
Another situation arises, which is how you divide the compensation between the relatives when you have a number of relatives with a claim. That issue might not be unimportant. For the sake of argument, you might have a situation in which parties were separated and in which the children of the relationship, who had been living with the deceased, were going to stay with the deceased’s mother. The needs of the children would be assessed in that context, against a limited pot. Unless I am misreading the situation, in that circumstance it would be relevant to consider the surviving spouse or partner’s income. The minister rightly says that that income should be taken into account in such a situation.
I accept that I am digging into the issue a bit, but it seems to me, subject to any further comments, that the minister’s view on this is probably right.
I will speak strongly against amendment 6. If I recall rightly, the evidence that the committee heard strongly supported the disregard of the relative or spouse’s income. I am sure that one witness said that this is about modernising the law according to the way in which we live our lives. People who are out working now are not out working for pin money. The income of the relative or spouse is calculated according to the way in which that family lives and the responsibilities that the relative or spouse takes on, such as mortgages.
If we were to agree to amendment 6, we would be going against the views of the people we heard from who work in the field and against all the work that has been done to prove that the disregard is the right way to go. The spouse or partner should not be penalised any more because of the loss of support and, in some cases, loss of life.
12:15
As has already been said, this is the obverse of a principle that has already been established, following an earlier section of the bill. There is unanimity of purpose on the issue. Everyone is anxious and determined to ensure that fairness applies. Cathie Craigie is correct to say that evidence was received on the disregard, but there may be other issues.
Mr Butler, who will have the opportunity to speak shortly, is slightly concerned about the impact of the Brown v Ferguson judgment. I understand the direction of that concern. However, given that the legal principle has already been established, I do not think that there will be a difficulty, as extending the judgment would clearly fly in the face of what I consider to be the unanimous view of the committee and in due course, no doubt, the Parliament.
As the minister suggested, there are probably some technical difficulties with amendment 15. I know that Mr Butler would not wish to prejudice in any respect the undoubted benefits of the bill by inserting a provision that could be open to challenge at a later date. At this stage, unless I hear persuasive evidence to the contrary, I am minded to support amendment 6 and to reject amendment 15.
As I said earlier, since the bill was last before the committee, a great deal of further work has been done on a constructive and consensual basis. The end result is that I have been able up to this point to agree to all the Scottish Government’s amendments, with no exceptions. I differ from it only on the question of the disregard of a surviving spouse’s income. I am pleased to say that there is no dispute between the Government, the committee and me on the point of principle with regard to the exception; I am grateful to the minister for stating that clearly today. The question for the committee is how best to put the principle into practice.
I suggest that, when the bill process is finished, we want an act whose terms are absolutely clear. We do not want the courts to have to refer to debates in the Parliament to work out what was intended. As far as is humanly possible, we must have certainty and avoid any unintended consequence.
I understand that the Government has lodged amendment 6 because it does not think that it is necessary to spell out to the court that the surviving spouse’s income is to be disregarded, as section 7(1)(a) instructs the court only to take into account 75 per cent of the deceased’s annual income when calculating how much is to be awarded by way of loss of support.
We have heard in evidence that loss of support is the financial award that is made to the deceased’s dependent relatives. It is made up of several constituent parts. We were referred to a number of cases, especially the formula that was followed in Brown v Ferguson. Broadly speaking, in that formula the court will add together the deceased’s net income and the surviving spouse’s net income, deduct the percentage for the deceased’s living expenses and go on to deduct the surviving spouse’s income to reach a multiplicand. An appropriate multiplier is applied to the multiplicand, and the resulting figure is the loss of support.
My serious concern about the Government’s amendment is that in section 7(1)(e) reference is made to
“any multiplier applied by the court”.
The section goes on to instruct the court to apply the multiplier
“from the date of the interlocutor awarding damages”.
The date from which the multiplier is to run is new and a departure from common law, but courts will still need to look to common law to determine what the multiplier should be. The danger is that a judge looking at that provision and realising that he will have to refer to common law to set the multiplier may take the view that he should also look to common law with regard to any other constituent part of loss of support that is not specifically mentioned in the bill. I suspect that specifically for that reason the Scottish Law Commission left in its specimen bill the words
“a relative’s income is to be disregarded”.
Without that paragraph, we are left with a general reference in section 7(1) to “loss of support” and then specific references to how much is to be deducted in respect of the deceased’s living expenses and the date from which the multiplier is to be applied. If the loss of support was the same as the multiplicand, I would have no difficulty in accepting the Government’s amendment, but I have been advised that the loss of support is not the same as the multiplicand. The multiplicand is only one element of the loss of support, and we should not run the risk of leaving the judges scratching their heads and wondering what to do about only part of what is to happen having been spelled out.
As I have already said, there is no difference in principle between my position and that of the Government, colleagues or the Parliament. We all want to end up with a law that requires the court to disregard the surviving spouse’s income. In view of the fact that part of section 7 still leaves it to the court’s discretion to apply the common law in relation to fixing a multiplier, there is no harm whatsoever in leaving in section 7(1)(b). I would prefer it to be left alone.
I lodged amendment 15 in case the Government’s amendment 6 is accepted. In effect, the bill instructs judges to do something different from what has happened before and we should make it clear to them that that is what the Parliament intends to happen. It is likely that some litigation will be directed towards the interpretation of the phrase “manifestly and materially unfair”, which we have already agreed to at stage 2. The court will have to make a decision in considering whether or not to apply a different percentage in respect of the discount for living expenses. I remain concerned that there will have to be a string of legal cases to determine what those words mean before the law becomes completely settled in the area. I have accepted that a workable compromise is needed on the matter, but I am still apprehensive that we would run the risk of fuelling further arguments in the courts about the surviving spouse’s disregard if we deleted section 7(1)(b), as the minister suggests, through amendment 6.
That said, I have listened carefully to what the minister and colleagues around the committee table have said and I would not wish—although this is not a decision for me—a vote to take place that would divide us where we have been united heretofore. I accept that there may be drafting issues with my amendment 15. I listened carefully to what the minister said and, if that amendment would not have the intended effect, it is otiose and functionless.
I make a direct plea to the minister to withdraw amendment 6. It is obvious that he would win the vote if he pressed the matter, but I want the constructive approach that has been taken to continue. I make it clear that I have no intention of moving amendment 15, even if he presses amendment 6. We have a little time between the end of stage 2 and stage 3 to come up with an approach that we could all agree on and which would be as fixed and certain as is humanly possible. I make a plea to the minister, but that does not mean that, if he refuses to accept that plea, I will go off in a huff, to use the Glaswegian expression; I certainly will not. I am making a serious plea, not to avoid losing a vote, which I certainly would, but to avoid making an error and to give us a little more time so that we can come up with something at stage 3 that we can all get behind. I make the plea through you, convener, that the minister give us some indication in that regard in his summing up.
Thank you, Mr Butler. Minister, I invite you to wind up, bearing in mind what Mr Butler said.
I have listened closely to the arguments and I thank all members for their contribution, especially Mr Butler. I fully accept that, as I said in my opening remarks, these are not entirely straightforward arguments. They are a mixture of technical drafting considerations and of substantive issues. Having heard members’ arguments, I remain very clearly of the opinion that our amendment 6 and the argument justifying its existence are correct. The effect of amendment 6 is to delete a provision that is not required and is unfortunately confusing. The formula in section 7(1)(a) already provides for the amount available to support the relatives to be 75 per cent. It is clearly implicit in that section that no further calculation is to be made to disregard a relative’s income; in other words, that position is already incorporated in section 7(1)(a), together with a reading of the remainder of section 7.
It is important to bear two things in mind. I want to put on the record this and a few other matters that I hope will be of benefit and provide reassurances in addition to what I have already said. First, it is envisaged that cases where the courts are satisfied that 75 per cent would result in manifest and material unfairness will be very much the exception. I believe that I said that earlier in the debate on amendments 7 and 1.
Secondly, even when such cases arise, section 7 will continue to apply. While the court can set percentages other than 75 and 25 per cent, damages would still be assessed on the basis of a percentage of the deceased’s income. That is the point that I believe the convener made in relation to Brown v Ferguson. It would not be possible for the court to apply the Brown v Ferguson method of basing support on a percentage of the combined income and deducting the income of the surviving spouse. It is true that in those exceptional circumstances it would be open to the court to factor in the income of the surviving spouse when deciding what percentage to apply—I think that that is correct.
As has been evidenced to the committee, where the income of the surviving spouse is very substantial indeed, it could risk producing unfairness if the court were not to be permitted to consider that at all. So, in those unusual cases—I think that we all know that they will be unusual—it is appropriate that the court can deal with situations where the income of the surviving spouse is exceptionally high, in order to prevent giving rise to manifest unfairness.
I wanted to restate those general arguments, which Mr Butler and I have discussed in the extensive meetings that we have had since stage 1. Those matters have been thoroughly discussed between us and that is to the benefit of this morning’s proceedings, because it has allowed this debate to focus on the remaining issue of substance between us. I want to and will continue to work with Mr Butler—I hereby undertake to do so—in exactly the same way as we have done since stage 1. We will be happy to meet and discuss this issue with him further should he so wish, but it is my view that amendment 6 is necessary and correct. I hope that the committee will support it. If the committee does so, I undertake that we will continue to listen to any further representations and respond to reasonable arguments, particularly from Mr Butler but, of course, from any other member and from any interested observer outwith today’s proceedings. We will listen carefully and respond if it is felt that the course that we have urged the committee to take this morning is anything less than the correct approach.
I hope that my response is acceptable to Mr Butler. I did not think for a moment that he would flounce off in a huff and I am sure that we will continue our constructive engagement if the committee decides to support amendment 6 and reject amendment 15—although I understand that amendment 15 will not be moved. I urge the committee to support amendment 6. No doubt before stage 3 we will have an opportunity to give further consideration to the matter, with Mr Butler.
12:30
The question is, that amendment 6 be agreed to. Are we agreed?
Members: No.
There will be a division.
For
Aitken, Bill (Glasgow) (Con)
Brown, Robert (Glasgow) (LD)
Don , Nigel (North East Scotland) (SNP)
Thompson, Dave (Highlands and Islands) (SNP)
Watt, Maureen (North East Scotland) (SNP)
Against
Baker, Claire (Mid Scotland and Fife) (Lab)
Craigie, Cathie (Cumbernauld and Kilsyth) (Lab)
Kelly, James (Glasgow Rutherglen) (Lab)
The result of the division is: For 5, Against 3, Abstentions 0.
Amendment 6 agreed to.
Amendment 15 not moved.
Amendment 7 moved—[Fergus Ewing]—and agreed to.
Section 7, as amended, agreed to.
Sections 8 to 13 agreed to.
Section 14—Interpretation
Amendments 8 to 12 moved—[Fergus Ewing]—and agreed to.
Section 14, as amended, agreed to.
Section 15 agreed to.
Schedule 1 agreed to.
Section 16 agreed to.
Schedule 2 agreed to.
Section 17 agreed to.
Section 18—Transitional provision etc
Amendment 16, in the name of Robert Brown, is grouped with amendments 17 and 13. If amendment 17 is agreed to, I cannot call amendment 13, on the ground of pre-emption.
In its report, the Subordinate Legislation Committee noted that wide Henry VIII powers appear to be contained in section 18. In particular, section 18(4) provides:
“An order under subsection (1), if it includes provision amending or repealing an enactment contained in an Act, is not made unless a draft of the statutory instrument containing the order has been––
(a) laid before, and
(b) approved by resolution of,
the Parliament.”
The point is that the provision allows for subordinate legislation to appeal or amend primary legislation, which is not the general direction of travel that we should be taking.
Amendment 13, in the name of the minister, would clarify the position to a degree but would simply replace the reference to an order that includes provision that amends or repeals an enactment contained in an act with the phrase
“A statutory instrument containing an order under subsection (1) which adds to, replaces or omits any part of the text of an Act (including this Act)”.
That does not change the substance of the issue and, if anything, it goes further than the provision that it would replace.
I am prepared to listen to the arguments, but it seems that the principal issue is why there needs to be provision to amend or repeal primary legislation, including the act that results from the bill, rather than provision for subordinate legislation that would implement bits and pieces of the act. Provision to amend or repeal primary legislation is not frequently made.
I move amendment 16.
The practical effect of amendments 16 and 17, in the name of Robert Brown, would be that orders that the Scottish ministers made under section 18(1) would be subject to the negative procedure. The affirmative procedure is more appropriate for orders that involve amending or repealing any parts of primary legislation, including the act that results from the bill. I understand why the Subordinate Legislation Committee, as a matter of general principle, requires Henry VIII powers to be justified. As I said in my formal response to the Justice Committee’s report, I think that such powers are justified in this instance.
I turn to amendment 13. Section 18 provides Scottish ministers with the power to make
“incidental, supplemental, consequential, transitional, transitory or saving”
provisions by secondary legislation. More specifically, section 18(4) provides that, if such provisions amend or repeal primary legislation, the instrument must be subject to the affirmative procedure. The Subordinate Legislation Committee was critical of section 18(4), commenting that the power to modify primary legislation through an ancillary order should be stated expressly rather than indirectly. Incidentally, that was stated in paragraph 192 on page 38 of the Justice Committee’s report, which encompassed the Subordinate Legislation Committee’s recommendation in that regard.
Amendment 13 addresses that point, taking up the Subordinate Legislation Committee’s invitation by introducing a more explicit reference to the power to add to, replace or omit the text of an act, and by making it clear that the power may be exercised in relation to the act that results from the bill.
The committee also had concerns about ancillary powers being capable of modifying primary legislation. Any new body of law can give rise to a need for a range of ancillary provisions, and it might be appropriate for them to extend to modifying primary legislation, including the act that results from the bill. That is particularly so where, as in this case, the bill covers complex reform mechanisms. It could be that the provisions, once enacted and tested, will prove problematic. If that were to be the case, given the importance and sensitivity of the issues, it would be essential to move quickly to take remedial action. The power will ensure that that is possible.
Additionally, without the power, in order to deal with a matter that was clearly within the scope and policy intentions of the bill, it would be necessary to return to the Parliament to make changes by primary legislation. That would not be an effective use of either the Parliament’s or the Scottish Government’s resources.
Accordingly, I commend amendment 13 and, with respect to Mr Brown, invite the committee to reject amendments 16 and 17.
Thank you. There being no contributions from committee members, I call Mr Butler.
I entirely agree with amendment 13, and especially with the latter part of the minister’s explanation of why it is the correct amendment. He said that provisions might prove problematic as the legislation plays itself out. Amendment 13 represents a way of dealing with a problem that arises swiftly, expeditiously and with the appropriate level of parliamentary scrutiny. I believe that use of the affirmative procedure is more appropriate. Amendment 13 deals concisely and succinctly with the concerns that the Subordinate Legislation Committee raised and, although Robert Brown lodged amendments 16 and 17 with the best intentions, amendment 13 is by far the more preferable way of proceeding. I urge colleagues to go for amendment 13.
As the minister pointed out, the Subordinate Legislation Committee had two concerns about the matter. Amendment 13 endeavours to deal with the first concern, and I have no particular difficulty with that. My principal issue is the other part of that committee’s comments, which were about the necessity for the provision to amend primary legislation in this way. I have not heard much by way of justification of that, except in general terms. I do not know whether this is the case, but it might have been necessary to amend the Damages (Scotland) Act 1976 through subordinate legislation because of the same sort of issue. If so, that would give us a hint, given that an act that has been on the statute book for some time, even with the best intentions, has had to be modified in that way.
I point out that the power is not just about transitional provisions but about incidental, supplemental, consequential and saving provisions, so it is a wide power. I will remain opposed to the giving of the power unless the minister or indeed the sponsor of the bill can give more substantial grounds than they have given so far. Against that background, I will persist with amendment 16.
The question is, that amendment 16 be agreed to. Are we agreed?
Members: No.
There will be a division.
For
Brown, Robert (Glasgow) (LD)
Against
Aitken, Bill (Glasgow) (Con)
Baker, Claire (Mid Scotland and Fife) (Lab)
Craigie, Cathie (Cumbernauld and Kilsyth) (Lab)
Don, Nigel (North East Scotland) (SNP)
Kelly, James (Glasgow Rutherglen) (Lab)
Thompson, Dave (Highlands and Islands) (SNP)
Watt, Maureen (North East Scotland) (SNP)
The result of the division is: For 1, Against 7, Abstentions 0.
Amendment 16 disagreed to.
Amendment 17 not moved.
Amendment 13 moved—[Fergus Ewing]—and agreed to.
Section 18, as amended, agreed to.
Section 19 agreed to.
Long title agreed to.
That ends stage 2 consideration of the bill. I congratulate members on their lucid contributions. I also congratulate Mr Butler and the minister on the way in which they have conducted negotiations over the bill, which has been an exemplar of how discussions should be conducted for the good of people who find themselves in the unfortunate position of being bereaved following an accident.
12:41
Meeting suspended.
12:43
On resuming—