Minutes of Evidence - 30 September 2008

Members present for all or part of the proceedings:

Mr Peter Weir (Chairperson)
Mr Alban Maginness (Deputy Chairperson)
Mr Alan Bresland
Mr Simon Hamilton
Mr Danny Kennedy
Mr Raymond McCartney
Mr David McNarry
Mr John O’Dowd
Mr Declan O’Loan
Mr David Simpson

Witnesses:

Mr William Abernethy )
Mr Millar Farr ) Royal Black Institution
Mr David Hamill ) Northern Ireland Office
Dr David Hume ) Grand Orange Lodge of Ireland
Mr David Kyle ) Northern Ireland Office
Mr Lewis Singleton ) County Armagh Grand Lodge

The Chairperson (Mr Weir):

I welcome representatives from the Orange Institutions and from the Northern Ireland Office. Lewis Singleton is from the County Armagh Grand Lodge, and he is also a solicitor who has acted on behalf of those Orange Lodges whose property has been damaged maliciously; Dr David Hume, is director of services at the Grand Orange Lodge of Ireland; Mr Millar Farr, is the sovereign grand master of the Royal Black Institution; and, finally, Mr William Abernethy, is the treasurer of the Royal Black Institution.

Last week, the Committee was given a full briefing on the Draft Criminal Damage (Compensation) (Amendment) Order (Northern Ireland) 2008 from representatives of the Northern Ireland Office (NIO), The Compensation Agency and the Department of Finance and Personnel (DFP). Members are therefore fairly well briefed on the background to the draft Order. Given that NIO representatives are also present today, the Committee can seek clarification from them on any issues that may arise.

I advise our guests today that, following the presentation, members will have an opportunity to ask questions. I ask members to indicate that they have a question to ask, and I will take questions in the order in which they are asked.

Dr David Hume (Grand Orange Lodge of Ireland):

I thank the Committee for inviting us here today. We have circulated a briefing paper among members, which is more detailed than our presentation will be, although we are happy to take questions.

Attacks on Orange Halls in recent years have been very well publicised, as members will know. Our central point is that attacks on our halls are essentially attacks on our wider community, because many of those halls are used for a variety of other community activities.

I will now hand over to Lewis Singleton, who will make a presentation based on our submission.

Mr Lewis Singleton ( County Armagh Grand Lodge):

I do not propose to read through the entire submission, but it would be useful to give some background to the current legislation and the effect that the proposed amendment would have. The current legislation is the Criminal Damage (Compensation) (Northern Ireland) Order 1977, the purpose of which is essentially to allow the state to compensate individuals or groups for damage to property that has occurred as a result of criminal acts that the state has failed to prevent.

Essentially, under article 5 of the 1977 Order, compensation is payable if one of two conditions can be fulfilled. The first condition is met when the police issue a Chief Constable’s certificate on the basis that they have information, or reason to believe, that a proscribed terrorist organisation was behind the attack.

The second condition is where a Chief Constable’s certificate is not issued, but where the police believe or have evidence to show that three or more persons were involved in the attack or incident, and, as the legislation states, were unlawfully or riotously assembled together.

A Chief Constable’s certificate is issued solely at the discretion of the police. There is little that an organisation or an owner of a property — or a hall, in this case — can do to produce evidence that would help the police to make up their minds about an incident. On the face of it, the “three or more persons” condition may seem to be a simpler ground on which to proceed. However, that condition is governed not only by the 1977 Order, but by case law. The case of Gilmore and McCandless, if read strictly, shows that even if there is evidence to show that three or more persons were involved, an additional burden exists, which is that there must have been people in the area at the time who were reasonably put in fear of an attack.

That condition was designed to cover more fully situations in which property was damaged during riots or civil disturbances, as opposed to instances in which attacks on property in isolated areas occurred in the middle of the night. As members of the Committee will appreciate, it is very difficult to obtain witness evidence to show how many people were involved in an incident, much less that there were people in the vicinity of a property at the time of the incident who were put in fear for their safety.

The police are now extremely reluctant, to the point of outright refusal — except in a number of recent incidents — to issue a Chief Constable’s certificate. Since the ceasefires, they have taken the view that the level of involvement of proscribed organisations in the attacks has been reduced, although they still issue certificates in very particular circumstances, rather than adhere to any general policy.

That means that the trustees of halls have to fall back on the “three or more persons” route, which has also proved practically impossible to prove, given that even if there are witnesses, they are very reluctant to come forward. The same applies to the additional burden of finding people who were in the vicinity of the incident at the time of the attack and who were put in fear.

As I said at the outset, the aim of the 1977 Order was to compensate owners of property for the failure of the state to protect those properties. The difficulty for the Orange Institution is that the majority of its 620 or so Orange Halls throughout Northern Ireland are situated in rural areas, down lanes and on by-roads. It has to be accepted that it is practically impossible for any police force to either prevent attacks on those properties in the early hours of the morning or to detect those who were involved.

In practical terms, that has meant that in circumstances in which the trustees of properties do not succeed under the criminal damage legislation, they have had to fall back on their insurance. The effect of that, as members can see from our document, is that insurance premiums for Orange Halls, when they can obtain insurance — in some cases, that proved to be impossible — can cost three or four times as much as premiums for comparable halls in the rest of the UK. Our document refers to the Highlands and Islands scheme in northern Scotland as a direct comparator.

A huge financial burden and penalty has been put on the owners of the halls and the communities that use them, in the form of increased premiums, the absence of compensation for attacks, and the shortfall between compensation and the cost of repairs. That burden is also felt when halls cannot be used by the community that they serve simply because they have no insurance and the trustees cannot open them up for public use.

The purpose of the proposed amendment is, essentially, to add to the legislation halls that belong to the seven organisations that are listed in our written submission. It will put them into a similar position to that of agricultural buildings, with which the current legislation deals differently.

Under the 1977 Order — and in line with Irish land law that dates back to 1697, and, in particular, in line with the Grand Jury (Ireland) Act (1836) — special provision has always been made for agricultural buildings that are damaged as a result of a criminal or malicious act. The 1977 Order essentially states that if the police take the view that an agricultural building has been damaged maliciously as a result of a criminal act, the owner is automatically compensated.

Let us say, for example, that the same group of people attacks both an Orange Hall and a hay shed that sit side by side on the same lane. A ridiculous situation could arise whereby the owner of the hay shed will automatically be compensated on the basis that the attack was malicious, whereas the trustees of the Orange Hall — which was attacked in the same circumstances, by the same gang — will not. Those trustees will have to jump through hoops in an attempt to get compensation, but will find ultimately that it is impossible to get.

The draft Order essentially proposes that the current legislation be amended so that the halls belonging to the seven organisations will be added to that agricultural exemption clause. Thus, they would be placed on the same footing as not only agricultural property, but shipping property. The intention is that property owners in the seven organisations will be given some relief and comfort. That will, in turn, encourage confidence in the insurance market to insure the halls and to reduce the premium substantially. Given that the cost of repairing the damage caused by attacks would be spread across the entire community, the Orange Institution also believes that the provision would encourage communities to realise that no matter whose halls are attacked, it is the entire community, and not just a section of it, that would bear the financial burden.

The Institution is largely in favour of the draft amendments, with one exception: what is known as the “sunset clause” — new article 4A(5) of the proposed draft Order. It essentially states that the article should automatically cease to have effect three years after the Order is enacted. The Institution opposes that sunset clause strenuously for several reasons, but mainly because to state that the article will cease to have effect after three years gives the insurance market no confidence.

As I understand it, insurers have given evidence to the NIO on this matter. We have certainly been advised that insurance companies work on a five-year insurance cycle; in other words, they look at a five-year claims history, and a three-year period clearly falls short of that. No confidence will be built up in the insurance market within three years — in my view, it will not be built up within five years. We believe that that situation is totally inadequate. Indeed, if that sunset clause remains in the draft Order, there would frankly be no point in enacting the legislation because it will not achieve its end in any shape or form.

The legislation is either needed or it is not needed. If attacks stop, no claims will be made under the legislation. If attacks continue, whether as part of a co-ordinated, systematic campaign or through sporadic activity, the legislation will be needed. There is no point in introducing legislation that will cease to have effect within three years if it cannot achieve its aims in that period. That would give attackers a green light to recommence their attacks.

I have given a synopsis of our position. As I said earlier, I do not propose to read through the entire submission; it is there for members to read, if they wish.

The Chairperson:

Thank you for that evidence. Two members have so far indicated that they want to ask questions. Does anybody else wish to ask questions?

Mr McNarry:

I welcome you all, and I thank you for a plausible presentation and a good written submission.

You make a strong case for the removal of the sunset clause. However, a case is being made to retain that clause and to introduce a renewal clause on a review system, which will, more or less, show whether a pattern emerges of a reduction in attacks. That may or may not be reviewed at the end of the three years, with the result that we will enter into a cycle.

What is your opinion of the review or renewal process being contemplated after three years? Can you detail briefly any difficulties that have been experienced by your organisations in the current compensation process?

Mr Singleton:

To put it bluntly, the three-year renewal clause is a nonsense. If legislation is to be introduced, it must be drafted and enacted in such a way that means that it achieves what it sets out to. As you will read in our submission, the Northern Ireland Office and various Ministers have been involved in lengthy meetings on the matter for over six years. The NIO and its Ministers are well aware that the insurance market is confidence driven. There must be confidence in the insurance market so that insurers can provide adequate insurance and provide the trustees of the halls with a level playing field of insurance premiums. As I understand it, the NIO is aware that the insurance market works on a five-year cycle; I would be surprised if it were not aware of that fact.

The NIO knows that confidence must be instilled in the market, and it is bound to know that three years in a five-year cycle process will not work. If the matter has to come back to the legislature — wherever that may be — it means that it is left hanging. It is similar to the American presidential election where the President serves for eight years but really only serves for six, because when year seven is reached the President is dead in the water. The same principle applies here. If insurance companies know that policies are due to come up for renewal every third year, and they work on a five-year cycle, they will not reduce the premiums or address the issues. It is a nonsense to include that clause in the draft Order because that would negate the whole impact of the legislation.

As regards the current process, I have had wide experience of dealing with The Compensation Agency and, in fairness to it, I would not be overly critical of the staff or the way in which they process claims — particularly in light of the number of appeals that have been to the County Court recently; I will not bore the Committee with the details. The legislation, particularly relating to the three or more persons and people being in fear, has been shown to be all over the place with different County Court judges — and, in some cases, The Compensation Agency — placing different interpretations on the legislation.

The bottom line is that the current legislation does not work. The timescales for processing claims, or the assessment values that are placed on damage to properties are not in question. The legislation simply does not work. Instead of protecting properties and compensating people for attacks on those properties, it penalises financially both the owners of the properties and the communities that they serve.

Mr Kennedy:

Mr Singleton, you mentioned that there are approximately 620 halls in Northern Ireland. What is your best estimate of the number of halls that have qualified for and enjoy rate relief and those that do not? The legislation makes it clear that unless a hall qualifies for rate relief it would not be covered. What is your best estimate of the percentages that are involved?

Mr Singleton:

Mr O’Dowd:

I thank the witnesses for their presentations. I restate Sinn Féin’s condemnation of the attacks on the properties of the Orange Lodge and other Loyal Orders.

One thing that is clear is that those organisations provide a community function. They also provide functions for the Orange Order, which is also perfectly legitimate. My colleague in Craigavon Borough Council Mr Simpson will know that the community provision in rural areas where many Orange halls are situated is woefully inadequate. Therefore, the provision given by the Orange Lodges to the community is needed and welcome.

My questions relates to the sunset clause. Would the compromise of, for example, a five-year sunset clause alleviate your concerns about the insurance companies’ five-year cycle of insurance? That could also provide some leeway with the NIO on those matters.

Mr Singleton:

I will make my remarks through the Chairperson. A five-year sunset clause would still encompass only one insurance cycle. Having dealt with a large number of claims personally, and having spoken to very senior brokers in Northern Ireland, it is my view that a five- or even a 10-year sunset clause would not come close to resolving the issue or to putting confidence back into the market.

One would not make a claim in relation to minor damage.

Proposed new article 4A(4) states:

“This article shall, subject to paragraph (5), expire on the third anniversary of the commencement date”.

Proposed new article 4A(5) states:

“At any time while this Article is in operation (including a time when it is in operation by virtue of an order under this paragraph), the Secretary of State may by order provide that it shall continue in operation for a period not exceeding three years from the coming into operation of the order.”

What is your interpretation of that, in your capacity as a solicitor? I was not certain of its meaning.

Mr Singleton:

If the honourable member is not certain, how will a humble country solicitor know what it means? [Laughter.]

The Chairperson:

I will stop this breakout of humility. The explanatory note at the end of the draft Order states that:

“The provision is limited to a period of three years from its coming into operation, but the Secretary of State may by order extend its operation for a further period or further successive periods, each not exceeding three years.”

Mr A Maginness:

That was my tentative interpretation.

The Chairperson:

I am not sure who will be sending a bill to whom.

Mr A Maginness:

I understand your argument about the sunset clause and the insurance. However, under the draft Order, the Order could, effectively, be extended for another three years if the circumstances arose in which the mischief that the draft Order is intended to deal with continued or was reactivated. Is that a reasonable conclusion?

Mr Singleton:

The problem with that is that people are at the mercy of the legislator who is dealing with their cases. I keep returning to this: the Orange Order has a problem with this whole area; that is why we have been lobbying on it for six years, or thereabouts.

To put it in perspective, the Orange Order has approximately 620 halls. According to our figures, 205 separate properties have been the subject of attacks. Eleven halls have been attacked in the Republic, and there have been approximately 75 repeat attacks. One third of all Orange Halls have been attacked. That creates a problem, because insurers completely lack the confidence to provide buildings cover on those properties.

Subject to what the legislator might say, I take your point that there is almost a provision for a rolling renewal, but that would still be a renewal that would operate on a three-year cycle. Even if that is renewed only once, it is still only one five-year cycle from the insurer’s point of view. The attacks have effectively occurred for almost of 20 years — four five-year cycles. It will take something as radical as the legislation being changed to put the necessary confidence back into the market.

Leaving it open to the whim of a legislator will not engender the confidence that the insurers require. That is our concern.

Mr Maginness:

Your figures about attacks are interesting. There were three attacks in 2001; two attacks in 2002; six or more attacks in 2003; four attacks in 2004; 14 attacks in 2005; and five attacks in 2006. There were then 28 attacks in 2007 — 15 of which were minor, but attacks nonetheless; and then three attacks in 2008.

There certainly seems to have been an intensification of attacks in 2007 and probably 2005. The other years have fairly reduced numbers; they do not go into double figures. I am not justifying those in any sense; I am just pointing out that there is a variable pattern. The figures up to February 2008 — although there may have been some incidents after that — indicate that there seems to be a decline in the number of attacks. Is that a reasonable assessment?

Mr Singleton:

Attacks can come sporadically or in clusters. In a way, the attacks during 2008 are a continuation of the cluster of attacks that occurred in late 2007, many of which took place in the north Armagh area. The difficulty is that the attacks eased off during other periods. The insurers have not drawn any comfort from the reduction, because the attacks could flare up again.

The big issue with insurers is that they need to be confident that the problem has been dealt with. I assure the Committee that insurers do not have confidence in insuring Orange Halls. I could give examples of areas in which there have been very few — if any — attacks on halls, but the premiums have still increased threefold or fourfold. The insurers see it as a sector in the insurance market and deal with it as a block issue. Attacks on halls in south Armagh or west Tyrone affects the premiums in north Down. That is the way that the insurers deal with it.

I have a comment to make before I bring in Mr Simpson, who I know has been waiting quite a while.

Mr Simpson:

I have waited this long, so I do not mind.

The Chairperson:

Looking at the timescales, it seems that the attacks have been on a long-term basis and have had a rollercoaster-type pattern. There was a certain amount of attacks in the early 1990s that escalated during the late 1990s and then dropped off to a much lower level than had previously been the case. Then, around 2007, the number of attacks escalated again. It seems that the attacks have occurred in cycles, with fairly lengthy periods of time between them.

I will move on to Mr Simpson, who has been waiting patiently.

Mr Simpson:

Thank you, Mr Chairman. As the sixth person to ask a question, I would be as well asking you what the weather was like when you were coming in, because almost everything else has been asked already.

Mr Maginness highlighted the downturn in attacks in 2008 and I take your point that the incidence of attacks is sporadic and could increase at any time. Would you put that down to the fact that the legislation is in the public domain; therefore, those who carry out the attacks may be concerned that the halls that they attack will be replace with new halls? You may not be able to answer that but please try your best.

Mr Maginness mentioned the Chief Constable’s certificate: have there been occasions when a local district commander has recommended the issue of a certificate and the Chief Constable has disagreed?

Mr Singleton:

I am not aware of any instances where senior local police have recommended the issue of a certificate and the Chief Constable has refused.

Mr Simpson:

What about the downturn in recent attacks?

Dr Hume:

It is difficult to assess why attacks occur. There are patterns. Mr Maginness mentioned a later downturn; however, there were a large number of attacks in 1995 and 1998. It is difficult to draw any conclusions except that, in some areas, people are opposed to the presence of Orange Lodges and Orange Halls.

Mr Simpson:

That point is valid, because levels of attack may relate to what is happening politically or to whether contentious parades are involved. In 2007, in my constituency, six halls were attacked and badly damaged because of the parades issue. I accept that it is difficult to assess the matter. However, it is pleasing to know that local district commanders’ recommendations have been respected.

Is it possible to improve the Compensation Agency’s service in order to facilitate quicker payments? Mr Singleton said that he has no issue with the staff.

Mr Singleton:

It is not for me to make the argument for the Compensation Agency. However, realistically, the agency does not deal with the same volume of claims as it did 10, 15 or 20 years ago. For that reason, a claim for damage to halls can probably be processed more quickly. That is an understandable and practical reason. When I have dealt with Compensation Agency staff — especially on recent occasions — they have done their utmost to expedite the matter.

Mr Hamilton:

I conveyed the main thrust of my question before the intervention. On the basis of the legislation — and precluding the issue of the sunset clause — how confident are you that there will be a positive response from the insurance industry?

Mr Singleton:

The insurance industry will be in a better position to answer that question when its representatives speak to the Committee next week. However, the measure is being specifically lobbied for because it is designed to restore confidence in that sector of the market.

I thank the witnesses for their evidence.

The Committee will have a further evidence session next week, after which it will consider its report. The Assembly will debate the report, probably on 4 November 2008, and everyone is welcome to attend. Those who are more technically minded might like to know that the debate will also be streamed on the Internet. Although the Committee’s report will remain confidential until the Assembly debate, copies will be sent to everyone who has given evidence.

Mr Hume:

I thank the Committee for receiving our submission. I hope that members found it useful. We wish you well in your deliberations.

The Chairperson:

Thank you.