Lobbying and the Damages Act 1996: ‘Whispering in Appropriate Ears’

Publication Date01 Mar 1997
AuthorRichard Lewis
DOIhttp://doi.org/10.1111/1468-2230.00076
LEGISLATION
Lobbying and the Damages Act 1996:
‘Whispering in Appropriate Ears’
Richard Lewis*
No doubt this Act will be greeted with only muted applause from the Law
Commission. On the one hand it will be pleased that its recommendations for
reform have been enacted quickly – within two years of its report Structured
Settlements And Interim And Provisional Damages (1994).
1
On the other hand it
will be dismayed by the behind-the-scenes lobbying which changed significantly
the formula it proposed for calculating the multiplier, and which would have led to
a major increase in damages for those seriously injured. Overall, the Act provides a
fascinating glimpse into not only the workings of our compensation system, but
also the political and legislative process of law reform.
2
In this wider context, the
Act may be of as much interest to public lawyers as personal injury practitioners
and commentators on the law of tort.
The Act is relatively short, comprising eight sections and one Schedule. At first
glance it may seem to be a self-contained, technical and uncontroversial piece of
legislation, of interest to only a limited group of lawyers.
3
After all, it appears to
have been conceived by the Law Commission and we know that only lawyers’ law
is supposed to emanate from such a source.
4
However, this obscures the origins of
the Act for there is much more to it than is immediately apparent.
Most of the Act deals with structured settlements.
5
These originate not from the
law reform body but from intermediaries – brokers and accountants – who
imported into this country practices which had radically changed North American
personal injury litigation in the 1980s.
6
These intermediaries convinced key
officials in the Inland Revenue that there were ‘significant economic and social
advantages’ in structures.
7
They prompted the Revenue to publicise tax advantages
The Modern Law Review Limited 1997 (MLR 60:2, March). Published by Blackwell Publishers,
108 Cowley Road, Oxford OX4 1JF and 350 Main Street, Malden, MA 02148, USA.230
*Cardiff Law School, University of Wales.
1 Law Commission Report No 224 (London: HMSO, 1994) following Consultation Paper No 125
(London: HMSO, 1992)
2 The Act received the Royal Assent on 24 July and came into effect on 24 September 1996. It
originated as a Bill in the House of Lords, and the main debates were in that chamber, there being
little discussion of it in the House of Commons. Its progress through the Lords was as follows: second
reading HL Deb vol 571 cols 1406–1419 29 April 1995; committee stage HL Deb vol 572 cols 363–
384 13 May 1996; report stage HL Deb vol 572 cols 1223–1234 14 June 1996; third reading HL Deb
vol 572 cols 1645–1654 11 June 1996; and consideration of Commons amendments HL Deb vol 574
col 1175 22 July 1996. Its progress in the House of Commons was second reading HC Deb vol 281
col 1051 8 July 1996; HC Standing Committee A 15 July 1996; and remaining stages on HC Deb vol
281 col 1051 16 July 1996.
3 ‘It is essentially a non-contentious Bill for which the Law Commission should be applauded.’ Lord
Irvine, HL Deb vol 571 col 1414 29 April 1996.
4 Cretney, ‘The Law Commission: True Dawns and False Dawns’ (1996) 59 MLR 631.
5 Such a settlement enables damages for personal injury to be paid by means of a series of tax free
payments, usually lasting for the rest of the plaintiff’s life. They replace at least part of the traditional
lump sum. See generally R. Lewis, Structured Settlements: The Law And Practice (London: Sweet
and Maxwell, 1993).
6 For a detailed analysis see Lewis, ‘Structured Settlements: An Emergent Study’ (1994) 13 CJQ 18.
7 Newstead, ‘The View From Somerset House’ (1989) 7(10) The Litigation Letter 78.

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