I move amendment No. 1:—
In page 4, to insert the following new section before Section 8:—
8—(1) Where a weekly payment (including a weekly payment which commenced before the appointed day) to a workman in a case of total incapacity has been continued for not less than two years, the court, on the application of the workman made at any time after he has attained the age of 21 years, if it is satisfied that the workman remains totally incapacitated as a result of the injury and that he is likely to continue to be so incapacitated for the rest of his life, may by order provide for the payment by the employer, by way of redemption as from the date of the application of his liability to make the weekly payment, of a lump sum of such amount as may be determined by the court, subject to the limitation that the amount so determined shall not exceed such amount as would, if invested on the date of the application in the purchase of an immediate life annuity, purchase an annuity for the workman equal to 75 per cent. of the annual value of the weekly payment.
(2) In determining, under sub-section (1) of this section the amount of a lump sum, the court, as well as having regard to all other matters which it considers relevant, shall have regard, in particular, to the age of the workman and to his expectation of life.
(3) For the purposes of sub-section (1) of this section a life annuity shall be deemed to be purchasable at a price calculated in accordance with the table set forth in the Second Schedule to this Act and not otherwise.
(4) The court shall have a discretion to grant or refuse an application under this section and, in exercising that discretion, the court, as well as having regard to all other matters which it considers relevant, shall have regard, in particular, to whether the making of the order would be for the benefit of the workman and whether the making of the order would cause undue hardship to the employer.
(5) This section shall not apply to a case of partial incapacity which, by an Order under Section 24 of the Act of 1934, is required to be treated as a case of total incapacity.
(6) This section shall come into operation on the appointed day.
(7) This section shall be construed as one with the Act of 1934.
I introduced the original Section 8 into the Bill in an attempt to remedy what many people regard as a hardship on injured workmen, that is, that their compensation takes the form of a weekly payment and that they have no right, as employers have, to apply to the court to have the weekly payment commuted for a lump sum. I mentioned that the workmen settle for lump sums by agreement with the employers or the insurance companies in about 800 cases in the year but that nearly half of these agreements are not registered in the courts, and that there is a widely-held belief that these voluntary settlements are rarely to the workman's advantage. The purpose of Section 8 was to protect the interests of injured workmen by bringing in the courts to determine whether there should be a lump sum settlement and, if so, what the amount of the lump sum should be.
The original Section 8 was modelled on Section 27 of the 1934 Act, which gives employers the right to apply to the courts for redemption. It was obvious from the start that the section as introduced would give rise to many new complexities and difficulties. I mentioned, for instance, the difficulty that might be experienced in proving that incapacity to earn—which is the only kind of incapacity with which the Workmen's Compensation Acts are concerned—was permanent.
The debate on the Second Reading left me with the feeling that I had not got the general view of the House on Section 8. The amendment which was put down to delete the section apparently made Deputies think harder about the problem. The debate on this amendment made it clear that, while there were objections to giving men who were only partially incapacitated the right to have their weekly payment commuted for a lump sum, there was a general feeling that some provision of this nature should be made for injured workmen whose incapacity was permanent.
The amendment which I now move is an attempt to meet that expression of opinion by the House. It provides that, where a workman has been in receipt of a weekly payment of compensation in respect of total incapacity for not less than two years, he may apply to the court for the redemption of the weekly payment and, if he satisfies the court that he is totally incapacitated and is likely to remain so for the rest of his life, the court may order redemption if it is satisfied that it would be for the benefit of the workman and would not cause undue hardship to the employer. The amount of the lump sum will be fixed by the court having regard to the age of the workman and his expectation of life, but the amount shall not in any case be greater than that already provided in the Act of 1934 for redemption in cases of permanent incapacity. Sub-section (5) of the new section excludes from the operation of the section cases in which the workman's incapacity is partial only but is deemed to be total under Section 24 of the Act of 1934. This section certainly does not do all we would wish to do, but it does give a right to apply for redemption in the type of case to which the House was most favourably disposed. It is a big change and introduces a new principle into the workmen's compensation code, but it should not be regarded as in any way our last word in this matter.
During the Committee Stage debate, it was suggested that the original Section 8 went too far and that what was wanted was a simple section giving a workman the right to receive compensation by way of a lump sum rather than in the form of a weekly payment, as at present. A provision of this kind would be tantamount to scrapping the code of workmen's compensation as it has stood for nearly 60 years and replacing it by a new one. Compensation has always taken the form of a weekly payment which was some fraction of the pre-accident wages, subject to an overriding maximum, so that it has not been necessary to attempt to foresee how long the incapacity will last. The compensation ran only from week to week and could be varied or ended at any time, according as the workman's circumstances changed. To provide instead a lump sum payment involving a precise estimate of the length of time the incapacity to earn would continue would be a change of the most fundamental kind, which would require the fullest consideration and should hardly be made by amendment on the Report Stage.
Taking everything into consideration, I hope the House will agree that the section as it now stands is an honest effort to do the best we can at the moment to give the most deserving type of case the right to apply for redemption.