I am pleased to have the opportunity to address the Seanad on the Second Stage of this Bill. The Bill proposes to consolidate with amendments what is commonly called the malicious injuries code, that is, the statutory basis for the payment out of the rates of compensation for malicious damage to property. The provisions of the present code are contained in a number of statutes commencing with the Grand Jury (Ireland) Act, 1836. These statutes are listed in the Schedule to the Bill.
I am not going to enter into a discussion of the origins of the code — to do so would be a pointless exercise — although I am aware of the criticism that have been levelled at it as being an instrument of colonial subjugation imposed by an alien Government. On the other hand, there is the view that the code was never intended as such but was primarily intended to deal with the problem of 19th Century agrarian disturbances common to a number of countries. Whatever its origins, it must be recognised — and I know that many people do so recognise it — as having become a non-profit-making and valuable system of communal insurance against malicious damage to property.
There is no doubt that it has been the financing of the code which has given rise to most of the criticism of it which has arisen in recent years. However, it must be said that the financing of the code has never imposed an excessive burden on ratepayers, and it should not be forgotten that ratepayers themselves whose property was maliciously damaged have benefited under the code. Up to 1963 the average charge on the rates in respect of malicious injuries did not exceed ½p in the pound for the whole country.
In more recent years the cost of malicious injuries has increased more in line with increases generally in rates and, by 1979, the annual average charge on the rates had risen to 8p in the pound. Perhaps a better measure of the incidence of malicious injuries on the rates is the percentage of the total rate attributable to charges in respect of malicious injuries. This has risen from 0.1 per cent in the fifties to 0.8 per cent in 1979.
In 1974, in order to put a ceiling on ratepayers' liability for malicious injuries compensation, a non-statutory arrangement was introduced whereby if, in any financial year, the cost of compensation to a local authority exceeds the produce of a rate of 20p in the pound the excess is recouped to the local authority from the Exchequer.
Senators will recall that the Local Government (Financial Provisions) Act, 1978, provided full relief in relation to payment of rates on domestic and certain other property. This did not, however, result in increased amounts being payable by those who continued to be liable for rates — for example, occupiers of agricultural land above a certain valuation and occupiers of industrial or commercial premises, factories, offices and shops. This is because local authorities are compensated by a grant from the Exchequer equal to the loss in rates income resulting from the relief to ratepayers granted by the Act.
Since the financial responsibility of local authorities for malicious injuries compensation has been reduced and limited in the ways that I have just mentioned it might be argued that local authorities should now be relieved of all responsibility for malicious injury compensation. The Government do not accept this argument. Local authority involvement is a key factor, and this approach is fundamental to the main provisions of the Bill. The involvement of local authorities means that the services of their professional and other staff can be used at minimal cost in connection with the processing of malicious injury claims and the contesting of such claims in appropriate cases at court hearings.
To transfer the responsibility to the State would necessitate the establishment of a new and expensive organisation with legal and other specialist staff, probably Dublin-based, which would greatly increase the cost of compensating for malicious injuries, whilst the removal of responsibility from the local authorities would not result in any tangible saving to them by way of staff or accommodation.
The Interdepartmental Committee on Malicious Injuries, in a report furnished some years ago, expressed a similar view, which the Government have accepted. Their basic recommendation was to the effect that a system of compensation for malicious injuries to property should be retained and the cost should continue to be payable by local authorities. The Bill accordingly provides that local authorities will continue to be liable for malicious damage to property, subject to certain exceptions and on the basis that local authorities will be recouped from the Exchequer for any compensation paid in excess of the produce of a rate of 20p in the pound, this being an existing non-statutory arrangement which I have already mentioned and which is being given a statutory basis in section 20 of the Bill.
As I have said, the Bill proposes to consolidate, with amendments, the law providing for compensation for malicious injuries to property. The explanatory memorandum, which was circulated to Senators with the text of the Bill, deals in some detail with its provisions and the side notes in the Bill indicate those provisions which are new to the law or new in part. I shall now outline the main changes in the law for which the Bill provides.
At present all claims for compensation must be heard by the Circuit Court. A number of these claims are for very small sums. It is now proposed in section 13 of the Bill that any case where the claim is for a sum not exceeding £2,500 will be dealt with in the District Court. Senators will be aware that this is the new general limit proposed for District Court contract and tort cases in the Courts Bill, 1980, which was circulated at the same time as this Bill. Claims for greater amounts will be heard by the Circuit Court, as at present.
A right of appeal from the District Court to the Circuit Court is provided in section 17 and in section 18 there is also provision to have a case stated by the District Court for the opinion of the Supreme Court. This is in line with the views of the Committee on Court Practice and Procedure in relation to cases stated in general and as set out in the recommendations of their 11th Report.
At present compensation is payable where the malicious damage exceeds £5. This figure was fixed in 1898. In 1963 the interdepartmental committee, having noted that the costs involved in the hearing of certain cases were greater than the amount of the claims themselves and that there was an undue number of trivial cases, recommended that compensation should be payable only where damage exceeds £20. Section 5(1) of the Bill proposes that the "threshold" should be raised to £100. This is being done so as to take account of the fall in the value of money since 1963. In Northern Ireland the "threshold" figure was increased from £20 in 1971 to £100 in 1977. Section 26 of the Bill provides that the Minister for Justice, with the consent of the Minister for Finance, may by order vary the amount of the "threshold" figure. There is no equivalent provision in the present law.
Another innovation as far as our law is concerned is the provision in section 12(2) prohibiting the award of compensation in respect of the first £100 of any claim so that no applicant may suffer a reduction in respect of more than one claim for the same property as a result of actions occurring during any period of 12 months. There is a similar provision in Northern Ireland. It is a common practice with insurance companies to provide for exclusions of this type in their policies. In our present malicious injuries code, however, there is no such provision: if the damage exceeds £5, compensation for the full amount, including the first £5 may be awarded. I believe that the logic behind the proposed provision is clear. In the absence of such a provision a person who suffered damage amounting to say £99 would not be entitled to any compensation, whereas a person who suffered damage amounting to £101 would be entitled to the full amount.
Compensation for malicious damage to property in coastal waters is another matter in relation to which the Bill makes provision for a change in the law. Until 1979, compensation for damages to property in coastal waters was not payable under the Malicious Injuries Code. In that year, in an unreported case, Brown v Donegal County Council, the Supreme Court held that by reason of section 685 of the Merchant Shipping Act, 1894, where a vessel is maliciously damaged while lying off the coast, compensation may be recovered from the county off which she lies. Section 685 of the 1894 Act deals with jurisdiction over vessels "being on, or lying or passing off" a coast or "being in or near" a bay, channel and so on. On the one had, the present law as it stands following the 1979 Supreme Court decision is too restrictive as its coverage is limited to malicious damage to "vessels".
As defined in the 1894 Act a "vessel" is any ship or boat or other description of vessel used in navigation and may not, for example, cover such things as fixed offshore navigation lights, drilling rigs or equipment used in fish farming operations. On the other hand, the distance from the coast within which malicious damage to a vessel will qualify for compensation is too imprecisely described by the terms "lying off or passing off the coast," and so on that are used in section 685 of the 1894 Act. It is for these reasons that section 5(3) of the Bill, provides that damage to property which is within any harbour or within one mile beyond the coastal boundary of a local authority will qualify for compensation.
I should mention, too, that the interdepartmental committee recommend that the area of liability of local authorities should be extended to include coastal waters. The committee's recommendation was not restricted to any particular kind of property nor did they define what they meant by coastal waters.
Section 16 of the Bill provides that local authorities against whom claims are brought will be empowered to settle the claims out of court and to lodge money in court. These are new provisions in so far as the malicious injuries code is concerned and they follow the procedure that obtains in ordinary civil actions. They are intended to encourage the settlement of claims for compensation before the case comes before the court thus saving the time of the courts and reducing the liability of local authorities for costs. Another advantage will be that persons whose property has been maliciously damaged and who agree to a settlement will receive payment of compensation much sooner than they would under the present code.
The Bill also provides for the repeal without re-enactment of the local levy provision in the Grand Jury (Ireland) Act, 1836 whereby the court may direct that the cost of meeting compensation for malicious injuries will be levied on the rates of a particular small locality such as a parish or townland. This is undoubtedly a punitive provision that was designed to bring their civic responsibility home to the people of a particular area in cases where the court was convinced that some, at least, of them had been involved in or privy to communal activity leading to the malicious damage giving rise to the claim for compensation. With the abolition of rates on domestic property, circumstances in this regard have changed completely and the retention of a provision in the law enabling a local levy to be imposed on the rated occupiers of non-domestic property such as shops and factories in a small locality would be clearly inappropriate.
Compensation for property stolen in the course of a riot is provided for in England and in Northern Ireland. There is no similar provision in Irish law at present. Section 6 of the Bill is designed to cover such cases. It provides for payment of compensation in respect of loss of property which is unlawfully taken from a building during the course of a riot in which other property is also maliciously damaged. This provision is included in the Bill because a property owner in such circumstances is at the mercy of the wrongdoers and normally he cannot secure insurance cover to protect himself against loss or damage caused by persons riotously assembled. The provision extends to a riot on board a ship which is in a harbour or within one mile of shore. It may be observed that section 5 provides for compensation for damage caused to property during a riot whereas section 6 provides for compensation for property that is stolen during a riot.
Under the present law, an award of compensation cannot be paid until the local authority have included the amount in its estimates for the following year and the rate has been levied and collected. This means that — apart from any other delays — there can be a time-lag of almost two years between the occurrence of the damage and the actual payment of the award. Section 11 of the Bill which provides for the payment on foot of a court award of compensation ‘out of the funds' of the local authority will have the effect of reducing the time-lag very considerably — by a year or more in many cases.
In order to close a loophole in the Bill as initiated I introduced amendments in the Dáil which will prevent an applicant from obtaining compensation "on the double". These provisions are in section 12(3)(C) and 19.
There are a few other proposed changes in the law that should be mentioned at this stage. Three of these changes will have the effect of providing an entitlement to compensation for malicious damage in cases where such compensation is not payable under the present law. First is a new provision in section 5 which classifies damage caused in the course of the committing of a crime as malicious damage for the purpose of the legislation. An amendment introduced in the Dáil ensures that the crime involved must be one against the property damaged and not just any crime. Damage caused for the purpose of committing a crime, which is covered in the present law, is also provided for in the section.
The second change is provided for in section 2 where "property" is defined, for the purpose of this legislation, as including incorporeal hereditaments which are not covered by the present law on compensation for malicious damage. The effect of this new definition of property is that malicious damage to inter alia rights of fishing, shooting or herbage will qualify for compensation, as was recommended by the Interdepartmental Committee on Malicious Injuries. Destruction of a fishery, for example, may cause more damage to be done to those who hold the fishing rights and whose living is threatened by the damage than to the landlord who, under the present law, is entitled to recover compensation for damage to the river bed.
The third change, which is provided for in section 7, relates to compensation for damage that is caused by a person of unsound mind or by a child. Under the present code compensation is excluded where damage is caused by a person of unsound mind or by a child under the age of seven years; the position in regard to chtildren between seven and 14 is doubtful, because many of the decisions relating to children of this age are apparently conflicting. From the age of 14 years on, a person has full criminal responsibility. There is no justification for the exclusion from the scope of the Bill of damage caused by persons of unsound mind or by children, that is, those under 14 years of age. Section 7 will, accordingly, allow persons whose property is damaged in this way to qualify for compensation. In this regard, I should mention that personal injuries inflicted by children and by persons of unsound mind are covered by the non-statutory scheme of compensation for personal injuries criminally inflicted that was introduced by the Minister for Justice in 1974.
Other proposed changes in the law will have the effect of reducing or excluding compensation in certain cases. Section 12 of the Bill provides that compensation will not be payable in respect of damage to or loss of coins, currency notes, postal orders, money orders or stamps or in respect of damage to or loss of articles of personal ornament, including watches and jewellery if these articles are kept otherwise than as part of stock-in-trade. To prove or disprove the existence of such items can be difficult, if not impossible, and it can be difficult to prove or disprove exactly when and in what circumstances an item of personal ornament is damaged or lost. There is, therefore, the danger of fraudulent claims being made in respect of these items.
Section 12 also provides for the reduction or exclusion of compensation where the applicant did not take reasonable precautions to avoid the damage or loss or reasonable steps to minimise the extent of it or where he himself bears some responsibility for it. A number of local authorities have requested the inclusion of a provision of this type. The same section provides that compensation will not be payable in respect of damage to a structure which is erected in contravention of, or otherwise does not conform to the requirements of the Planning Acts. Apart from these instances there are, as I mentioned earlier, other provisions which will have the effect of limiting the financial liability of local authorities, namely, their recoupment from the Exchequer for any compensation they pay in excess of the produce of a rate of 20p in the £; the raising of the threshold figure for payment of compensation to £100; and the exclusion of compensation for the first £100 of damage.
The Bill also provides for a number of procedural changes of a minor nature, details of which are given in the Explanatory Memorandum. The need for these changes has become apparent from experience over the years and Senators will, I trust, agree that they can more appropriately be dealt with during Committee Stage.
Before I conclude, however, there are a few points that should be brought to the attention of the House. The provisions in sections 5 and 6 of the Bill which exclude compensation for any loss consequential on the actual damage or loss will make no change in the present law. In 1975 the Supreme Court disallowed a claim in respect of consequential loss. In the case in question the actual damage amounted to £29,000 while the claim for consequential loss amounted to £220,000. It can be seen that if the Bill were to provide for consequential loss the financial implications for public funds could be serious.
Senators will note that the Bill does not cover compensation for criminal injury to the person. In 1974 a non-statutory scheme, financed from State funds was introduced. Under that scheme payment of compensation may be made on an ex gratia basis in respect of personal injuries, fatal and non-fatal directly attributable to a crime of violence or to circumstances arising from the action of the victim in assisting, or attempting to assist in the prevention of a crime or in the saving of human life. The scheme is administered by the Criminal Injuries Compensation Tribunal and has operated satisfactorily. The Minister for Justice will however, be reviewing the scheme to see whether it is necessary to make any changes in it and also to see whether it should not be put on a statutory basis. There is a provision in section 10(2) of the Bill which entitles a ratepayer to appear and be heard at the court hearing of an application for compensation in which his local authority is involved. Related provisions concerning a rate-payer's right to intervention in such proceedings occur in sections 15, 17 and 18.
It was suggested during the debate on the Bill in the Dáil that, because many persons have the legal status of ratepayers although no longer actually paying rates and because the Exchequer contribution to local authorities is now so great, these rights should be given to a wider sector of the community, say taxpayers generally. I do not see that there is any need to do this. The Government's view is that, on balance, to provide for the continuance of the ratepayers' rights, as is proposed in the Bill, is the best course. Since what is involved is a right which is provided for in the present law, and even though I understand that, in the past, few ratepayers exercised this right, I think that, as a matter of principle, we should be slow to interfere with it while there still remains the possibility — though a diminishing one — that it could be usefully invoked. It would be open to any member of the public who has information concerning an incident that gives rise to a claim for compensation to communicate with either party to the proceedings and it would be open to that party to call him as a witness.
I commend the Bill to the House.
