Report on the Draft Criminal Damage (Compensation) (Amendment) (Northern Ireland) Order 2008

AD HOC COMMITTEE ON CRIMINAL DAMAGE COMPENSATION

Report on the Draft Criminal Damage (Compensation) (Amendment) (Northern Ireland) Order 2008

Together with the Minutes of Proceedings of the Committee, 
the Minutes of Evidence, and written submissions relating to the report

Ordered by the Ad Hoc Committee to be printed 17 October 2008
Report: 12/08/09R (Ad Hoc Committee on Criminal Damage Compensation)

This document is available in a range of alternative formats.
For more information please contact the 
Northern Ireland Assembly, Printed Paper Office,
Parliament Buildings, Stormont, Belfast, BT4 3XX
Tel: 028 9052 1078

Membership and Powers

Ad Hoc Committee on the Draft Criminal Damage (Compensation) (Amendment) (Northern Ireland) Order 2008

The Committee was established by resolution of the Assembly on Monday 15 September 2008 in accordance with Standing Order 53(1). The remit of the Committee was to consider the proposal for a draft Criminal Damage (Compensation) (Amendment) (Northern Ireland) Order 2008, referred by the Secretary of State for Northern Ireland, and to submit a report to the Assembly by 4 November 2008.

The Committee had twelve members, including a Chairperson and Deputy Chairperson. Its quorum was five. The membership of the Committee was as follows:

Mr Peter Weir, Chairperson
Mr Alban Maginness, Deputy Chairperson
Dr Stephen Farry 
Mr John O’Dowd
Mr Danny Kennedy 
Mr Declan O’Loan
Mr Raymond McCartney 
Mr Ian Paisley Jnr
Mr David McNarry 
Mr David Simpson
Mr Alex Maskey 
Mr Jimmy Spratt

The Report and Proceedings of the Committee are published by the Stationery Office by order of the Committee. All publications of the Committee are posted on the Assembly’s website at http://archive.niassembly.gov.uk

Table of Contents

Background to the Report

Establishment and Remit of the Ad Hoc Committee

Proceedings of the Committee

Acknowledgement

Overview: Proposed Draft Criminal Damage 
(Compensation) (Amendment) (Northern Ireland) Order 2008

Current Arrangements

Background to Change

Government Proposal

Three-Year Clause

Committee’s Considerations, Conclusions and Recommendations

General Background

The Committee’s Consideration of the Main Objective

Insurance Issues

The Proposed Three-Year Life of the New Provisions (the Sunset Clause)

Funding the New Provisions

Equality Impact Screening of the Proposals

Publicity for the New Provisions

Appendix 1: Relevant Legislation

Draft Criminal Damage (Compensation) (Amendment) (Northern Ireland) Order 2008

Extract from the Rates (Northern Ireland) Order 1977

Recreational Charities Act (Northern Ireland) 1958

Appendix 2: Minutes of Proceedings

18 September 2008

23 September 2008

30 September 2008

7 October 2008

14 October 2008

Appendix 3: Minutes of Evidence

23 September 2008

30 September 2008

7 October 2008

Appendix 4: List of Witnesses before the Committee

Appendix 5: Written Submissions to the Committee

Loyal Orders

Law Society of Northern Ireland

Oval James Insurance Brokers

Committee Briefing Paper 01/08

Submission from NIO regarding Equality Issues

Background to the Report

Proposed draft Criminal Damage (Compensation) (Amendment) (Northern Ireland) Order 2008

1. On 25 June 2008, the NIO published for consultation a draft Criminal Damage (Compensation) (Amendment) (Northern Ireland) Order 2008 and asked for comments on the proposals by 10 November 2008.

2. In accordance with Section 85 of the Northern Ireland Act 1998, Mr Paul Goggins MP, on behalf of the Secretary of State for Northern Ireland, referred the Draft Order to the Assembly for its consideration.

3. Copies of the draft Criminal Damage (Compensation) (Amendment) (Northern Ireland) Order 2008 and the accompanying Explanatory Document issued by the Northern Ireland Office (NIO) are accessible under current consultations on the NIO’s website at http://www.nio.gov.uk

For ease of reference a copy of the draft legislation is reproduced at Appendix 1.

Establishment and Remit of the Ad Hoc Committee

4. On Monday 15 September 2008 the Assembly agreed, in accordance with Standing Order 53(1), to establish an Ad Hoc Committee with the remit:

To consider the draft Criminal Damage (Compensation) (Amendment) (Northern Ireland) Order 2008 and to submit a report to the Assembly by 4 November 2008.

5. This is a Report made by the Ad Hoc Committee and it describes its work during the period 18 September to 17 October 2008.

Proceedings of the Committee

6. At its first meeting on 18 September 2008, the Committee elected Mr Peter Weir as Chairperson and Mr Alban Maginness as Deputy Chairperson. The Committee agreed a schedule of further meetings and a list of organisations that should be invited to give oral evidence. The Committee also agreed to place a Public Notice in the main newspapers, inviting written submissions on the proposals from interested parties, and a Press Release to describe the remit and membership of the Committee.

7. At its meeting on 23 September 2008, the Committee was given an overview of the draft Order by officials from the Northern Ireland Office, the Compensation Agency and Land and Property Services of the Department of Finance and Personnel.

8. The Committee held further meetings on 30 September and on 7 and 14 October. The Minutes of Proceedings for all the meetings are included at Appendix 2.

9. In the course of its proceedings, the Committee received oral evidence from the representatives of the following organisations:

• The Northern Ireland Office
• The Compensation Agency
• The Department of Finance and Personnel, Land and Property Services
• Oval James Insurance Brokers and Zurich Commercial Insurance Company
• The Grand Orange Lodge of Ireland
• The Royal Black Institution

10. A complete list of those representatives who gave oral evidence to the Committee is included at Appendix 4.

11. The Minutes of Evidence for the oral evidence sessions are included at Appendix 3.

12. Written submissions received by the Committee are attached at Appendix 5.

Acknowledgement

13. The Committee would like to express its sincere thanks to the representatives of all the organisations who provided written and oral evidence at relatively short notice. That evidence was very beneficial to the Committee’s understanding of the proposed draft Order.

Overview of the Proposed Criminal Damage (Compensation) (Amendment) (Northern Ireland) Order 2008

14. This overview of the draft Order has been adapted from the NIO’s Explanatory Document.

15. A copy of the draft Order is reproduced at Appendix 1. An Explanatory Document, which explains the background to and purpose of the draft Order, can be accessed on the NIO website www.nio.gov.uk

16. The draft Order introduces an additional criterion, relating specifically to community halls, in the statutory criminal damage compensation scheme.

Current Arrangements

17. The Compensation Agency is responsible for the administration of statutory Compensation Schemes on behalf of the Secretary of State. The legislation under which compensation can be paid for criminal damage to property is the Criminal Damage (Compensation) (Northern Ireland) Order 1977 (“the 1977 Order”).

Background to Change

18. The proposal to amend the 1977 Order has been prompted by concerns about an increase in criminal attacks on community halls, resulting in claims which have sometimes not qualified for criminal damage compensation under the 1977 Order. These claims may not have been eligible for compensation either due to difficulty in obtaining evidence to prove that the damage was caused by three or more people, or because the police were unable to establish and certify that damage was the result of paramilitary activity.

19. There were 17 claims for criminal damage compensation resulting from attacks on community halls in 2007, compared to an average of 3 per annum between 2001 and 2006.

20. In 2007 criminal damage claims relating to attacks on community halls, mainly Orange halls, amounted to around £600k. Around two thirds of these are expected to be eligible for statutory compensation under the scheme as it currently stands. The previous six years generated successful claims amounting to an average of £85k in criminal damage compensation paid out per annum.

21. In bringing forward this draft legislation, the Government is acknowledging that the role played by community halls is vital in maintaining and strengthening the social infrastructure in the communities they serve. It recognises that the damage caused by these attacks, the loss of the facility and the costs falling to the community halls of repairing that damage, can have a significant impact on the local communities which use the halls.

Government Proposal

22. The Government is proposing to support local communities suffering from attacks on these community facilities, by introducing an amendment to the current criminal damage compensation scheme.

23. The aim of the proposal is to create a targeted approach to compensation for community halls that are criminally damaged but which do not meet the criteria of the current compensation scheme. The intention is to create additional provisions that will compensate community halls for criminal damage above the statutory deduction level without the need to prove that the damage (a) was carried out by three or more persons or (b) as a result of a malicious act by a person acting on behalf of, or in connection with, an unlawful association.

24. The new provisions to be added to the 1977 Order will be specific to community halls that are eligible for rates exemption relating to their use, or availability for use, for charitable purposes as set out in the Recreational Charities Act (Northern Ireland) 1958 (“the 1958 Act”).

25. The 1958 Act defines as charitable the provision of, or assisting in the provision of, facilities for recreation or other leisure-time occupation, if the facilities are provided in the interests of social welfare.

26. It is proposed that buildings that are exempt from rates under Article 41(2)(e) or Article 41A of the Rates (Northern Ireland) Order 1977 should be eligible for statutory compensation where they are criminally damaged at a cost of more than the statutory deduction (currently £200). Details of the relevant rates legislation are provided at Appendix 1.

Three-year Clause

27. The Government proposal is that the additional provisions will be time-limited, recognising that the recent increase in the level of attacks on community halls runs against the prevailing trend, and is not expected to continue in the medium term. Reflecting this, a sunset clause of three years is provided for in the draft legislation. This means that the additional criterion will cease to have effect three years after its introduction, unless the Secretary of State considers that the legislation is still required. In such circumstances the provisions could be extended by a further period or periods of three years.

Committee’s Considerations, Conclusions and Recommendations

General Background

28. At its first meeting on 18 September 2008 the Committee agreed that a press notice should be placed in the main newspapers seeking written comments on the proposals by 6 October 2008. The Committee also agreed that representatives of the NIO, the Compensation Agency and the Department of Finance and Personnel should be invited to give a presentation on the background to, and purpose of, the legislation. Furthermore it was agreed that four organisations should be contacted and invited to give oral evidence to the Committee: the Grand Orange Lodge of Ireland; the Ancient Order of Hibernians; the Association of Insurers; and the Law Society.

29. The Ancient Order of Hibernians decided not to provide evidence to the Committee but indicated, via the Committee Clerk, that the Order was generally content with the draft legislation. The Law Society decided to provide written comments only and these are reproduced at Appendix 5. The Grand Orange Lodge and representative of the insurance industry provided written and oral evidence (see Appendices 3 and 5). No other written comments were received by the 6 October deadline in response to the press notice.

30. This section of the Report sets out the Committee’s considerations, conclusions and recommendations on the issues covered by the draft Order, taking account of the oral and written evidence provided by organisations.

Rationale for Extending the Compensation Legislation

31. As outlined to the Committee by NIO officials, the aim of the draft Order is to provide additional access to statutory compensation for designated community halls which are subject to criminal damage. The damage caused by attacks, the loss of the facilities and the repair costs for the community halls can have a serious detrimental impact on local communities. As these halls play a vital role in maintaining the strength of social infrastructure in the areas they serve, the Government believes that they should be supported through the proposed amendment to the Criminal Damage (Compensation) (Northern Ireland) Order 1977.

32. The general trend in criminal damage has been downwards in recent years, and the Government views that as part of the normalisation strategy. In the past the Government took the view that criminal damage to buildings such as community halls was a matter for the commercial insurance industry rather than the statutory system and the current limited statutory criminal damage scheme was seen as being sufficient. It focuses on damage caused by three or more persons or by a paramilitary organisation (the latter case resulting in the issue of a Chief Constable’s certificate).

33. Many of the Orange halls that have been damaged are isolated, and often do not have large memberships or commercially related links, such as bar facilities, to provide a source of income. Some, due to their isolation, cannot meet the criteria under the current statutory compensation arrangements. Sometimes there is no evidence to support a claim. Even though three or more people may have attacked a hall, no one may have seen the attack taking place, particularly if it happened in the middle of the night. The police therefore have had difficulty in obtaining evidence to prove that the damage was caused by three or more people, or they have been unable to certify that the damage was the result of paramilitary activity. In these circumstances the Compensation Agency has not been in a position to conclude that compensation is appropriate.

34. The increase in attacks on halls has caused further problems for their owners because the attacks have had a detrimental effect on their insurance premiums. Some have become even more vulnerable because they were not insured and did not have access to statutory compensation. In 2007 there was an unexpected increase in the number of attacks on isolated and vulnerable Orange halls.

35. In May 2006, the Democratic Unionist Party (DUP) proposed an amendment at Westminster that sought to include community halls under sub-section 4 of the Criminal Damage (Compensation) (Northern Ireland) Order 1977. Had the amendment been successful, community halls would have been treated as if they were agricultural buildings for the purpose of criminal damage legislation and access to compensation would have been automatic. The DUP amendment at Westminster was supported by the UUP and SDLP representatives in the Commons, and by the Conservatives and Liberal Democrats, but it was defeated in the parliamentary vote.

36. The Government, however, subsequently decided to give further consideration to the issue. Ministers and officials met representatives of the insurance industry, with the aim of looking for a commercial insurance solution to the problem. Unfortunately, the outcome of those meetings was inconclusive, and with the number of attacks increasing in 2007, NIO Ministers decided that consideration should be given to amending the current criminal damage provisions. The result was the Government’s decision to add further criteria to the current Compensation legislation to give all eligible community halls easier access to compensation for criminal damage.

The Terms of the Proposed Amended Compensation Scheme

37. Most community buildings are covered by insurance and the Government did not want to distort the insurance market by giving wide access to statutory compensation where it was not necessary. It decided therefore to focus the legislation to address the problem of compensating designated community facilities, but at the same time ensuring that the legislation was not so wide-reaching that it could result in a distortion of the insurance market and have a significant impact on the public purse. The Government concluded that the new criteria should be targeted specifically at community halls that were exempt from rates under the Rates (Northern Ireland) Order 1977, and in particular halls that qualify under either:

(a) Article 41(2)(e) of the Rates Order, which relates to a small number of halls or facilities that are deemed as being used for charitable purposes under the Recreational Charities Act (Northern Ireland) 1958; or

(b) Article 41A of the Rates Order, which in effect covers facilities belonging to the following eight organisations

Ancient Order of Hibernians
Apprentice Boys of Derry
Grand Lodge of Freemasons of Ireland
Grand Orange Lodge of Ireland
Independent Loyal Orange Institution
Order of the Knights of St. Columbanus
Royal Antediluvian Order of Buffaloes
Royal Black Institution

38. Eligibility for compensation under the proposal, therefore, will be dependent on the hall being exempt from rates under the relevant part of the rates legislation and it will be relatively straightforward for the Compensation Agency to identify halls that are covered. These arrangements were considered by the Government to be the fairest and simplest way of focusing the legislation on community halls that are being used, or able to be used, for community welfare purposes. The majority of such facilities would already be eligible for compensation under the existing statutory criteria. For example, it is estimated that about two thirds of facilities suffering criminal damage would normally be covered under the “three or more persons involved” or “a Chief Constable’s certificate” criteria. The new criteria proposed in the draft Order create an additional route to give designated community halls easier access to statutory compensation. Community facilities that have drink licences or other commercial activities will be excluded from the arrangements.

Loyal Orders’ Evidence

39. In its evidence to the Committee the representatives of the Loyal Orders outlined the difficulties that their local branches have faced as a result of attacks and increased insurance premiums. They said that the aim of the Compensation (NI) Order 1977 was to compensate owners for the failure of the state to protect their properties. However, with the majority of the 600 plus Orange Halls being situated in rural areas, it is sometimes practically impossible for the police either to prevent attacks on properties or to detect the persons involved in attacks.

40. The police, the Committee was told, appear to be reluctant to issue a Chief Constable’s certificate. The witnesses said that since the ceasefires, the police 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. As a result the trustees of Orange halls have had to rely more on the “three or more persons” criterion, which has also proved extremely difficult to prove.

41. The trustees of many properties therefore have not had access to statutory compensation and have had to fall back on their insurance. As a result, a huge financial burden and penalty has been put on the owners of the halls and their communities, in the form of increased insurance premiums, the absence of compensation or 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 because they have no insurance and the trustees cannot open them up for public use.

42. The Loyal Orders, therefore, fully supported the main objectives of the draft Order but they strongly opposed the proposed three-year life of the new provisions (the so-called sunset clause) set out in the draft Order under which the provisions would cease unless renewed. Further details about the sunset clause are provided later in this section of the Report.

The Committee’s Consideration of the Main Objective

43. DUP and UUP Members of the Committee fully supported the main objective of the draft Order as a means of addressing the problem of attacks on community halls and the consequential increase in insurance premiums. The Alliance Member supported the objective as the simplest way forward but raised some concerns about the equality screening. Sinn Féin Members were broadly sympathetic to the objective of the legislation but said that a full equality impact assessment would have to be undertaken before they could support the proposal. SDLP Members acknowledged the problems that Orange halls faced, particularly in rural areas. However they were not convinced that the proposed amendment was the best method of addressing the issue and proposed that the measure should be wider in its scope and application.

Committee Conclusion

The Committee agreed to give a broad welcome to the general objective of the draft Order.

Insurance Issues

44. The Committee heard evidence from representatives of the insurance industry about the difficulties experienced, particularly by Orange halls, in obtaining insurance at reasonable premiums since 2001. The written submission to the Committee, titled “The Story So Far” is reproduced at Appendix 5. That paper and the oral evidence from insurance representatives described the problems that affected Orange halls, particularly as a result of the general hike in insurance premiums, following the events of 11 September 2001 in New York, and subsequent decisions by a large number of Orange halls to switch their insurance to an Edinburgh-based company which, it later transpired, had no proper insurance cover.

45. The Committee was informed that the break in long-standing relationships between halls and insurance companies proved costly as premiums increased and the insurance market subsequently considered that Orange halls, because of fire-damage attacks, were not a commercially viable risk. Insurers took the decision not to reconnect with them, leaving 200 - 250 halls without insurance cover. In January 2003 insurance brokers approached the insurance market on behalf of these halls but companies were reluctant to assist halls that had severed relationships in the past or with whom they had never had a relationship. However, following representation to all local insurers, three insurance companies agreed to combine to provide cover to halls, albeit at substantially increased rates (circa £1000 for a small hall).

46. While the vast majority of halls insured under the new arrangement were Orange halls, a couple of Hibernian halls and a couple of halls belonging to the Masonic Order were also covered. Brokers managed to negotiate reductions in subsequent years but then in 2007 there were a number of well-publicised attacks on Orange halls and insurers wanted to increase rates. However, after discussions it was agreed to maintain the rates for 2007-08.

47. The insurance representatives told the Committee that approximately 300 community halls are currently insured under the negotiated arrangement and that premiums are calculated on the same basis across Northern Ireland, so for example, a hall in Fermanagh will pay the same as a similar hall in Ballycastle, regardless of the level of attacks in those areas. With a current annual premium of about £945, this is substantially more than the estimate for a similar-type hall in Wales, the north of England or Scotland. Premiums are also about double the amounts that church halls might expect to pay. In addition, there are a number of halls with no insurance cover at present. The representatives confirmed that although there is an obligation on insurance companies to provide employers’ liability cover, there is no such obligation to provide property insurance and no compulsion on companies to take on an unattractive risk.

48. Insurance representatives anticipated that insurance rates may increase next year across the board, but advised the Committee that, if the draft legislation becomes law, then insurance rates for community halls would more than likely reduce. Furthermore the proposed legislation would open opportunities for halls that have not been insured to come back into the ordinary insurance market

Committee Conclusion

The Committee commended the work that had been undertaken by representatives of the insurance industry in recent years to broker insurance cover for many community halls that had been adversely affected by attacks and increased premiums.

The Proposed Three-Year Life of the New Provisions (the Sunset Clause)

49. NIO officials informed the Committee that the Government recognises that the proposed new provisions focus on community halls at a time when society is moving forward and criminal damage is generally on the decline. Therefore the need for the legislation, to address a specific short-term problem, had to be weighed against the commitment to promoting normalisation of arrangements in a post-conflict society. It was estimated that an open-ended commitment to extending statutory compensation could distort the commercial insurance market and involve a commitment of further public expenditure.

50. The Government considers the proposal to be an exceptional arrangement and one that should end as society normalises. For that reason, it was proposed that the legislation would have a sunset clause, so that it is time-limited to a period of three years. This is in recognition of the fact that the recent increase in the level of attacks on community halls runs against the prevailing trend because, even since 2007, there has been a downward trend in the number of attacks on halls.

51. The Government sees a need for the legislation at present but hopes and expects that the need will disappear and that the legislation can be allowed to lapse. Therefore three years after introduction, the legislation would lapse unless the Minister at the time assessed the situation and decided that the legislation was still required. In such circumstances, the Minister would have the power to extend the legislation for a further period or further successive periods, each not exceeding three years.

Loyal Orders’ Evidence

52. The Loyal Orders in their evidence vehemently opposed the sunset clause. They made the case that confidence had to be instilled in the insurance market, and that the insurance industry worked on five-year cycles. Confidence, they considered, could simply not be achieved within a three-year period. If insurance companies knew that policies were due to come up for renewal every third year and they work on a five-year cycle, they would not reduce the premiums or address the issues. Inclusion of the sunset clause in the draft Order would in their view negate the whole impact of the legislation. In response to questions from Members, representatives of the Loyal Orders provided statistics indicating that one third of the 620 Orange halls have been attacked and there have been approximately 75 repeat attacks. Insurers lack the confidence to provide buildings cover on those properties and representatives of the Loyal Orders expressed the view that even a 5-year or a 10-year sunset clause would not be enough to put confidence back in the insurance market.

Insurance Representatives’ Evidence

53. Representatives of the insurance industry confirmed that a normal insurance policy would have a five-year claims experience attached to it. However, with community halls/Orange Halls, a much longer period of a hall’s history would have to be considered because of the longer history of attacks. A way needed to be found to give insurance companies confidence when it comes to considering insurance for these halls. Introduction of the draft Order would remove that risk from the insurance market and allow Government to deal with the matter. They speculated that discussions on the proposed legislation over the past nine months and a condemnation of such attacks by all political parties had resulted in a reduction in the number of attacks. The legislation, they said, would give confidence to insurers, but it would also make people realise that there is no point in attacking community halls because the cost of repairs would be borne by the public purse.

54. The insurance representatives expressed some surprise at the inclusion of a sunset clause. They informed the Committee that insurance underwriters always look for trends, and that three years would not be long enough for a trend to be established and confidence to be restored, even if the situation were to remain relatively calm over the next three years. They also speculated that having a sunset clause of three years could possibly lead to some insurers taking on the insurance of halls but only for the three years for which the statutory arrangements are in place. In the event of the legislation not being renewed subsequently, that insurer might decide that the comfort of underwriting that business had gone and let the traditional insurers who previously had the business take it back. The three-year period would therefore create uncertainty as to what might happen after that period.

55. In summary, the insurance representatives considered that the proposed legislation, would take attacks on community halls out of the insurance market and had the potential to give insurance companies confidence about the position. However omission of the sunset clause would maximise that confidence on a long-term basis.

The Committee’s Consideration of the Sunset Clause

56. Sinn Féin Members were content with the sunset provisions as drafted. SDLP Members expressed the hope that the circumstances that have led to attacks on halls may not exist in the future. They were therefore content with the clause but qualified this stance with their proposal for a different and wider approach to be taken on the scope and application of the legislation. The Alliance Member was opposed to a sunset clause but felt that the legislation should be subject to review after a few years. DUP and UUP Members strongly opposed the provisions on the grounds that they would be needed as long as attacks continued and to provide confidence to the insurance market.

Committee Recommendation

The Committee recommended that the sunset provisions should be removed from the draft Order.

Funding the New Provisions

57. The Committee questioned NIO officials on the resources that would be made available to cover extension of the compensation scheme. Officials confirmed that account had been taken of an analysis of claims over a number of years and that an additional £300,000 per year had been factored into the Compensation Agency’s spending plans.

Committee Conclusion

The Committee acknowledged the assurance that provision had been made in the NIO’s Comprehensive Spending Review for up to an additional £300k per annum to cover the extended compensation scheme.

Equality Impact Screening of the Proposals

58. Following the Law Society’s written submission, which highlighted the duty on public authorities, under Section 75 of the Northern Ireland Act 1998, to promote equality of opportunity, the Committee received legal advice on the equality screening exercise carried out by the NIO as outlined in its Explanatory Memorandum. The advice raised concerns that the NIO, in undertaking an equality screening, had relied on an equality analysis of Article 41A of the Rates (Northern Ireland) Order 1977, which had been carried out in 2006 on a policy of rates exemption, and that Article 41(2)(e) of the same legislation had never been subject to a full equality screening. The NIO subsequently provided additional comments to the Committee about its Section 75 responsibilities and its equality screening exercise (a copy is included at Appendix 5). The Committee noted the concerns raised with regard to the adequacy of the equality screening exercise. Sinn Féin and SDLP Members proposed that a full equality impact assessment should be recommended. The Alliance Member shared some of the concerns about the equality screening and suggested that the NIO needed to ensure that the process was robust and that the Order was not vulnerable to challenge. The DUP, UUP and Alliance Members thought that a full equality impact assessment might not be necessary. After discussion the Committee agreed unanimously the following recommendation:

Committee Recommendation

While Members expressed a range of views as to whether a full equality impact assessment was needed, the Committee recommended that the NIO must demonstrate that the proposed legislation has been sufficiently equality-proofed.

Publicity for the New Provisions

59. The Committee was informed during its evidence sessions that there had been a decline in attacks on community halls since the early months of 2008. There was speculation from representatives of the insurance industry that this reduction could be linked to the condemnation of attacks across the political parties but possibly also to a growing awareness among those perpetrating attacks that such actions were futile since the Government’s proposals would ensure that halls would be repaired or replaced from the public purse.

Committee Recommendations

The Committee recommended that when the Draft Order is commenced the NIO should publicise the arrangements as a possible deterrent to persons who may contemplate attacks on community halls.

The Committee further recommended that the NIO should write to all relevant governing bodies listed under Article 41A and to any organisations which may qualify under Article 41(2)(e) of the Rates Order, alerting them to the extended coverage under the criminal damage compensation scheme.

Appendix 1

Relevant Legislation

Extract from the Rates 
(Northern Ireland) Order 1977

Recreational Charities Act 
(Northern Ireland) 1958

1958 Chapter 16

An Act to declare charitable the provision in the interests of social welfare of facilities for recreation or other leisure-time occupation and for purposes connected therewith.

[25th November 1958]

1 General provision as to recreational and similar trusts, etc

(1) Subject to the provisions of this Act, it shall be and be deemed always to have been charitable to provide, or assist in the provision of, facilities for recreation or other leisure-time occupation, if the facilities are provided in the interests of social welfare:

Provided that nothing in this section shall be taken to derogate from the principle that a trust or institution to be charitable must be for the public benefit.

(2) The requirement of sub-section (1) that the facilities are provided in the interests of social welfare shall not be treated as satisfied unless—

(a) the facilities are provided with the object of improving the conditions of life for the persons for whom the facilities are primarily intended; and

(b) either—

(i) those persons have need of such facilities as aforesaid by reason of their youth, age, infirmity or disablement, poverty or social and economic circumstances; or

(ii) the facilities are to be available to the members or female members of the public at large.

(3) Subject to the said requirement, sub-section (1) applies in particular to the provision of facilities at village halls, community centres and women’s institutes, and to the provision and maintenance of grounds and buildings to be used for purposes of recreation or leisure-time occupation, and extends to the provision of facilities for those purposes by the organising of any activity.

2 Savings and other provisions as to past transactions

(1) Nothing in this Act shall be taken to restrict the purposes which are to be regarded as charitable independently of this Act.

(2) Nothing in this Act—

(a) shall apply to make charitable any trust, or validate any disposition, of property if before the seventeenth day of December, nineteen hundred and fifty-seven, that property or any property representing or forming part or it, or any income arising from any such property, has been paid or conveyed to, or applied for the benefit of, the persons entitled by reason of the invalidity of the trust or disposition; or

(b) shall affect any order or judgment made or given (whether before or after the passing of this Act) in legal proceedings begun before that day; or

(c) shall require anything properly done before that day, or anything done or to be done in pursuance of a contract entered into before that day, to be treated for any purpose as wrongful or ineffectual.

(3) Except as provided by sub-section (4), nothing in this Act shall require anything to be treated for the purposes of any enactment as having been charitable at a time before the date of the passing of this Act, so as to invalidate anything done or any determination given before that date.

(4) As respects stamp duty on any instrument executed before the date of the passing of this Act, this Act shall not require anything to be treated as having been charitable for the purposes of section eight of the Finance Act (Northern Ireland), 1952 M1 (which excepted instruments in favour of charities and others from certain increases of stamp duty under the Finance Act (Northern Ireland), 1947 M2), unless it would have been so treated in accordance with the practice applied by the Ministry of Finance, for the purposes of the said section eight, immediately before the eighteenth day of December, nineteen hundred and fifty-two; but subject to that and to paragraphs (a) and (b) of sub-section (2), where more stamp duty has been paid on an instrument executed on or after the said eighteenth day of December and before the date of the passing of this Act than ought to have been paid having regard to section one, the provisions of sections ten and eleven of the Stamp Duties Management Act, 1891 M3, shall apply as if a stamp of greater value than was necessary had been inadvertently used for the instrument, and relief may be given accordingly, and may be so given notwithstanding that, in accordance with the provisions of section twelve of the Stamp Act, 1891 M4, the instrument had been stamped before the passing of this Act with a particular stamp denoting that it was duly stamped.

An application for relief under the said section ten as applied by this sub-section may be made at any time within two years from the date of the passing of this Act, notwithstanding that it is made outside the time limited by that section.

Annotations:

M1 1952 c. 13
M2 1947 c. 15
M3 1891 c. 38
M4 1891 c. 39

3 Application to Crown

This Act shall bind the Crown to the full extent authorised or permitted by the constitutional laws of Northern Ireland.

4 Short title

This Act may be cited as the Recreational Charities Act (Northern Ireland), 1958.

Appendix 2

Minutes of Proceedings

Thursday 18 September 2008 
Room 144 Parliament Buildings

Present: 
Mr Danny Kennedy
Mr Raymond McCartney
Mr Alban Maginness
Mr Declan O’Loan
Mr Ian Paisley Jnr
Mr David Simpson 
Mr Peter Weir

Attendees: 
Mr Kevin Shiels, Committee Clerk
Ms Aoibhinn Treanor, Clerk
Mr Oliver Bellew, Assistant Clerk
Mr Lindsay Dundas, Clerical Officer

Apologies: 
Mr Tom Elliott
Mr Stephen Farry
Mr Alex Maskey
Mr Jimmy Spratt 
Mr John O’Dowd

2.07pm the meeting opened in closed session with the Committee Clerk in the Chair.

1. Apologies

The apologies were noted.

2. Election of Chairperson and Deputy Chairperson

The Clerk took the chair for the election of a committee chairperson and asked for nominations. Mr Simpson proposed that Mr Weir be Chairperson of the Committee. Mr Paisley Jnr seconded the proposal. Mr Weir accepted the proposal. There were no other nominees.

Agreed: That Mr Weir be Chairperson of the Committee.

The Chairperson took the chair for the election of a Deputy Chairperson and asked for nominations. Mr Paisley Jnr proposed that Mr Maginness be Deputy Chairperson of the Committee. Mr O’Loan seconded the proposal. Mr Maginness accepted the proposal. There were no other nominees.

Agreed: That Mr Maginness be Deputy Chairperson of this Committee.

2.09pm the Committee opened in public session

3. Declaration of Interests

The Chairperson invited Members in turn to declare any amendments to the Register of Members’ Interests.

4. Committee composition and procedures

Members noted the Committee composition and procedures which had been circulated in advance.

5. Draft Forward Work Programme

Members noted the draft forward work programme and discussed possible dates for future meetings.

Agreed: Members agreed that the Committee should meet on Tuesday afternoons at 3.00pm.

Agreed: Members agreed to invite the following organisations to give oral evidence before the Committee:

On 23rd September:

• Northern Ireland Office Officials accompanied by representatives of Department of Finance and Personnel and the Compensation Agency.

Agreed: Members agreed that the NIO Minister should be invited to attend, if available.

On 30th September

• The Ancient Order of Hibernians
• The Grand Orange Lodge of Ireland

On 7th October

• The Law Society
• The Association of Insurers

6. Press Notice

Members noted a draft press notice prepared by the Clerk for publication.

Agreed: Members agreed the content of the press notice and were content that the notice should be published on Monday 22nd September.

2.29pm Mr Simpson left the meeting

7. Any other business

The Chairperson advised Members that legal advice, if required, could be provided to the Committee by Hugh Widdis, the Assembly Legal Adviser.

Agreed: Members agreed that a press release should be issued to inform the public of the formation of the Committee and its remit.

8. Date and time of next meeting

The Committee agreed that it would meet on Tuesday 23 September 2008 at 3pm.

Future meetings are as follows:
Tuesday 30 September 3pm
Tuesday 7 October 3pm
Tuesday 14 October 3pm

2.34pm the Chairperson adjourned the meeting.

Mr Peter Weir MLA
Chairperson, Ad Hoc Committee
23 September 2008

Tuesday 23 September 2008 
Room 135 Parliament Buildings

Present: 
Mr Peter Weir, Chairperson 
Mr Alban Maginness 
Dr Stephen Farry 
Mr Danny Kennedy
Mr Raymond McCartney 
Mr David McNarry
Mr Alex Maskey 
Mr John O’Dowd
Mr Declan O’Loan
Mr Ian Paisley Jnr
Mr David Simpson 
Mr Jimmy Spratt

Attendees: 
Mr Kevin Shiels, Committee Clerk
Ms Aoibhinn Treanor, Clerk
Mr Oliver Bellew, Assistant Clerk
Mr Lindsay Dundas, Clerical Officer

3.04pm the meeting opened in public session.

1. Apologies

There was an apology from Mr D Simpson, that he would be unable to attend the beginning of the meeting but would join later.

The Chairman welcomed Mr David McNarry as a replacement for Mr Tom Elliott on the Committee.

2. Draft minutes of the meeting held on 18 September 2008

Agreed: The draft minutes were agreed.

3. Matters Arising

3.1 The Chairperson invited Members to declare any amendments to the Register of Members’ Interests via the Clerk.

3.2 Members noted that a Press Notice from the Committee would be published in the media on Wednesday 24th September 2008 seeking comments by Monday 6th October 2008.

3.3 The Chairperson advised Members that a Press Release about the Committee’s work had also been drafted and would be issued on 24th September.

4. Evidence Session

The Chairperson welcomed the following Officials and invited them to brief the Committee:

Brian Grzymek – Deputy Director Criminal Justice Services, NIO 
David Kyle - Criminal Justice Services, NIO 
David Hamill – Criminal Justice Services, NIO 
James McKay – NIO Legal Advisors Branch 
Henry Spence – Land and Property Services, DFP 
Ray Jones – Head of Operations, Compensation Agency

The Officials briefed the Committee on the provisions of the draft Order. This was followed by a question and answer session.

Mr Simpson joined the meeting at 3.32pm

Mr O’Dowd left the meeting at 3.52pm.

Agreed: Mr Spence, DFP, agreed to provide the Committee Clerk with information on the number and category of halls that had gained exemption from rates under the provisions of Article 41 (2)(e) or Article 41A of the Rates (NI) Order 1977.

The Chairperson thanked the Officials for the briefing. The Officials left the meeting at 4.16pm.

5. Any other business

Agreed: Members agreed that the Clerk should send a letter to the Ancient Order of Hibernians inviting representatives to give oral evidence to the Committee. It was agreed that the Clerk should also consider seeking evidence from insurance companies/brokers who may provide cover for some of the other bodies listed for the purposes of Article 41A.

8. Date and time of next meeting

The Committee agreed that it would meet on Tuesday 30 September 2008 at 3pm in Room 135.

Future meetings are as follows:
Tuesday 7 October 3pm
Tuesday 14 October 3pm

4.24pm the Chairperson adjourned the meeting.

Mr Peter Weir MLA
Chairperson, Ad Hoc Committee
30 September 2008

Tuesday 30 September 2008 
Room 135 Parliament Buildings

Present: 
Mr Peter Weir, Chairperson 
Mr Alban Maginness 
Mr Allan Bresland 
Mr Simon Hamilton 
Mr Danny Kennedy
Mr Raymond McCartney 
Mr David McNarry
Mr John O’Dowd
Mr Declan O’Loan
Mr David Simpson

Attendees: 
Mr Kevin Shiels, Committee Clerk
Ms Aoibhinn Treanor, Clerk
Mr Oliver Bellew, Assistant Clerk
Mr Lindsay Dundas, Clerical Officer

3.03pm the meeting opened in public session.

1. Apologies

Apologies were received from Mr S Farry and Mr A Maskey. Mr S Hamilton deputised for Mr J Spratt and Mr A Bresland deputised for Mr I Paisley Jnr.

The Chairperson invited Members to declare any amendments to the Register of Members’ interests in advance of oral evidence from the Loyal Orders. Mr Bresland, Mr Hamilton, Mr Kennedy, Mr McNarry and Mr Simpson all declared interests as members of the institutions.

2. Draft minutes of the meeting held on 23 September 2008

Agreed: The draft minutes were agreed.

3. Matters Arising

3.1 The Chairperson advised Members that, to date, Committee staff had not received any responses to the Press Notice published in the main newspapers on Wednesday 24th September.

3.2 Members noted responses from two Executive Ministers to the NIO consultation on the Draft Order. The responses had been forwarded by NIO officials for Members’ information.

3.3 The Committee noted a briefing paper by the Clerk based on information provided by Mr Henry Spence of the Department of Finance and Personnel, following a request from Members for further information on the number, and categories, of halls that had gained exemption from rates under the provisions of Article 41 (2) or Article 41 A of the Rates (NI) Order 1977.

3.4 The Chairperson advised Members that the Clerk had just established contact with the Ancient Order of Hibernians and the Order was now considering the invitation to provide either oral or written evidence. The Chairperson indicated that Tuesday 7th October would be a suitable date for oral evidence, if the Order chose to do so.

3.5 Mr McCartney advised the Chairperson that he had received a tentative approach from the Ulster Council of the GAA about giving evidence to the Committee.

Agreed: Members agreed to wait to see if an official request was made to the Clerk by the GAA Ulster Council. If the Council wished to provide oral evidence this could probably be taken on 7th October.

3.6 The Chairperson advised the Committee of a written submission from Mr Stephen James of Oval James Insurance Brokers and informed Members that a copy of the paper would be circulated before the next Committee meeting.

3.7 The Chairperson advised Members that the Committee was awaiting a response from the Law Society in relation to giving evidence. Potentially therefore, there could be four organisations (Insurance, AOH, Law Society and GAA) wishing to give oral evidence on 7th October. The Clerk was asked to inform Members as soon as possible and at latest by Monday afternoon 6th October, of the number and details of organisations giving evidence at the meeting on 7th October.

4. Evidence Session

The Chairperson welcomed the following representatives of the Loyal Orders and invited them to brief the Committee:

Louis Singleton – Co. Armagh Institution 
David Hume – Director of Services, Grand Orange Lodge of Ireland 
Millar Farr – Sovereign Grand Master, Royal Black Institution 
William Abernethy – Treasurer, Royal Black Institution

The representatives gave a written and oral submission to the Committee. This was followed by a question and answer session.

Agreed: As a result of Members’ requests, the representatives agreed to provide the Committee with further information on increased insurance premiums for halls which had been attacked, and information on halls which had been left uninsured as a result of attacks. It was agreed that these examples should be anonymised.

Mr O’Dowd left the meeting at 3.59pm.

The meeting was adjourned due to a division in the Assembly Chamber at 4.06pm.

The meeting was reconvened at 4.18pm.

The Chairperson invited Mr David Kyle, NIO, who was present in the public gallery, to comment in relation to a query from Members.

The Chairperson thanked the representatives of the Loyal Orders for the briefing. The Representatives left the meeting at 4.22pm.

5. Any other business

None.

8. Date and time of next meeting

The Committee agreed that it would meet on Tuesday 7 October 2008 at 3pm in Room 135.

Future meetings are as follows:

Tuesday 14 October 3pm

4.26pm the Chairperson adjourned the meeting.

Mr Peter Weir MLA
Chairperson, Ad Hoc Committee
7 October 2008

Tuesday 7 October 2008 
Room 135 Parliament Buildings

Present: 
Mr Peter Weir, Chairperson 
Dr Stephen Farry 
Mr Alban Maginness 
Mr Alex Maskey 
Mr Allan Bresland 
Mr Danny Kennedy
Mr David McNarry
Mr Declan O’Loan 
Mr Jimmy Spratt

Attendees: 
Mr Kevin Shiels, Committee Clerk
Ms Aoibhinn Treanor, Clerk
Mr Oliver Bellew, Assistant Clerk
Mr Lindsay Dundas, Clerical Officer

3.04pm the meeting opened in public session.

1. Apologies

Apologies were received from Mr R McCartney, Mr J O’Dowd and Mr D Simpson. Mr A Bresland deputised for Mr I Paisley Jnr.

2. Draft minutes of the meeting held on 30 September 2008

Agreed: The draft minutes were agreed.

3. Matters Arising

3.1 The Chairperson advised Members that the Committee deadline for written submissions had passed and that no responses had been received.

3.2 The Chairperson advised Members that the NIO had received one further response to its consultation. The additional response was received from Lisburn City Council and supported the draft Order.

3.3 A response from the Grand Orange Lodge was tabled for Members’ information. The response contained anonymised examples of increased insurance premiums being paid by Orange halls and also information on halls with no insurance.

3.4 The Clerk briefed the Committee on various other organisations in relation to giving evidence before the Committee. Members noted that a response had been received from the Ancient Order of Hibernians, advising the Committee that it was generally content with the proposals and would not be giving evidence. Members noted written evidence from the Law Society which confirmed they would not be giving oral evidence. The Clerk advised Members that the Ulster Council of the GAA had not submitted any correspondence nor made contact, therefore oral evidence from representatives of the Insurance Industry would be the final evidence to the Committee.

Agreed: Members agreed to discuss the Law Society submission in closed session later in the meeting.

4. Evidence Session

Members noted a written submission from Stephen James of Oval James Insurers entitled The Story So Far. In advance of oral evidence from representatives of the Insurance Industry, the Chairperson invited Members to declare relevant interests.

The Chairperson welcomed the following representatives of the Insurance Industry and invited them to brief the Committee:

Stephen James – Oval James Insurance Brokers and Board Member, Faculty of Insurance Brokers

Stephen Boyles – Business Manager, Zurich Commercial and NI Chairman of the Association of British Insurers

The representatives gave an oral submission to the Committee. This was followed by a question and answer session.

Mr Kennedy joined the meeting at 3.21pm.

The Chairperson thanked the representatives of the Insurance Industry for the briefing. The Representatives left the meeting at 4.02pm.

The meeting was adjourned due to a division in the Assembly Chamber at 4.08pm.

Mr McNarry and Dr Farry joined the meeting at 4.21pm.

The meeting was reconvened in closed session at 4.22pm.

A memo from the Assembly’s Assistant Legal Adviser was tabled for Members’ attention. The memo addressed comments contained within the submission from the Law Society regarding Equality Impact screening undertaken by the NIO. It was agreed that the legal opinion should be referred to the NIO for comment.

The Chairperson advised Members that, due to the tight timescale to complete its remit, the Committee needed to give the Clerk a steer in relation to:

1. the generality of the Draft Order;

2. the proposed ‘sunset’ clause; and

3. any other issues.

Members gave some initial thoughts on these issues and it was agreed that a more detailed discussion on the Committee’s draft report would be held on 14th October 2008.

5. Any other business

None.

6. Date and time of next meeting

The Committee agreed that it would meet on Tuesday 14 October 2008 at 3pm in Room 135.

5.01pm the Chairperson adjourned the meeting.

Mr Peter Weir MLA
Chairperson, Ad Hoc Committee
14 October 2008

Tuesday 14 October 2008 
Room 135 Parliament Buildings

Present: 
Mr Peter Weir, Chairperson 
Mr Alban Maginness, Deputy Chairperson
Dr Stephen Farry
Mr Simon Hamilton
Mr Danny Kennedy
Mr Raymond McCartney
Mr David McNarry
Mr Alex Maskey
Mr John O’Dowd
Mr Declan O’Loan 
Mr David Simpson
Mr Jimmy Spratt

Attendees: 
Mr Kevin Shiels, Committee Clerk
Ms Aoibhinn Treanor, Clerk
Mr Lindsay Dundas, Clerical Officer

At 3.10 pm the meeting opened in public session.

1. Apologies

Mr Simon Hamilton deputised for Mr Paisley.

2. Draft minutes of the meeting held on 7 October 2008

Agreed —The draft minutes were agreed.

3. Matters Arising

3.1 There were no matters arising.

4. Responses to NIO’s Consultation

4.1 The Chairperson advised Members that responses to the NIO (from Lisburn Council and the DUP) had been copied to Members for information. No further responses had been received by the NIO as of 13 October 2008.

5. Consideration of Draft Committee Report

5.1 The Chairperson referred Members to papers distributed in Members’ packs: a written submission provided by the SDLP, a response from the NIO to the concerns raised in legal advice to the Clerk re equality issues, and the draft Committee Report. He proposed that the Committee should discuss these during its consideration of the draft Report and that this be done in closed session.

Agreed: That the Committee would discuss the draft Report in closed session.

Mr Kennedy left the meeting at 3.13pm

In Closed Session

Mr McNarry joined the meeting at 3.15 pm

5.2 The Chairperson introduced the draft Report and proposed that Members approve the following sections:

Background to the Report — read and agreed.

Overview: Proposed draft Criminal Damage (Compensation) (Amendment) (Northern Ireland) Order 2008 — read and agreed

Appendix 1: Relevant Legislation — read and agreed.

Appendix 2: Minutes of Proceedings — read and agreed.

Appendix 3: Minutes of Evidence — read and agreed.

Appendix 4: List of Witnesses who presented oral evidence to the Committee — read and approved.

Appendix 5: Written Submissions to the Committee — read and agreed.

5.3 Consideration of the Committee’s Conclusions and Recommendations Section

Main Objective of the draft Order

Mr McCartney said that Sinn Féin was unable to support the legislation until a full equality impact assessment had been undertaken. Mr O’Loan stated that the SDLP was not convinced that the proposed amendment was the best method of addressing the issue and thought that the measure should be wider in its scope and application. He asked that the SDLP submission summarising their position be appended to the Committee Report.

Mr Maginness left the meeting at 3.26 pm.

After consideration it was agreed that the SDLP and Sinn Féin views should be reflected in the Committee Report under relevant subject headings, but that the majority decision was in favour of a broad welcome to the general objective..

Agreed: that the Committee give a broad welcome to the general objective of the draft Order, but also reflect nuances of opinion in the Report

Mr O’Loan left the meeting at 3.33 pm.

Insurance Issues

Agreed: that the Report include a general commendation of the efforts of the industry in obtaining insurance for many community halls.

Mr O’Dowd joined the meeting at 3.35 pm.

Mr Maginness and Mr O’Loan rejoined the meeting at 3.38 pm.

Sunset Clause

The Committee discussed options around retention or removal of the sunset clause.

Division: Question put, that the sunset clause be retained.

Ayes: Mr Maginness
Mr O’Dowd
Mr McCartney
Mr O’Loan

Noes: Mr Weir
Mr Simpson
Mr Spratt
Mr Hamilton
Mr McNarry

Agreed: that a recommendation be included that the sunset clause should be removed.

SDLP Submission

Mr O’Loan and Mr Maginness proposed that the inclusion of the SDLP submission as an appendix to the Report be put to a vote.

Division: Question put, that the SDLP submission be appended to the Report.

Ayes: Mr Maginness
Mr O’Dowd
Mr McCartney
Mr O’Loan

Noes: Mr Weir
Mr Simpson
Mr Spratt
Mr Hamilton
Mr McNarry

Agreed: that the SDLP submission should not be appended to the Report.

Resources

Agreed: that the Committee should acknowledge the assurance given by NIO officials re comprehensive spending review cover.

Dr Farry joined the meeting at 3.45 pm.

Equality Impact Screening of the Proposals

Mr Kennedy rejoined the meeting at 3.48 pm.

Mr Maskey joined the meeting at 3.54 pm.

After discussion around the equality issues the Chairperson proposed the following form of words for the Committee Report:

“The Committee notes that concerns have been raised as regards the adequacy of the equality screening that has been carried out. While the SDLP and Sinn Féin members believe that a full EQIA is needed, and the DUP, UUP and Alliance Party members believe that it may not be needed, the Committee recommends that the NIO must demonstrate and ensure that the draft legislation has been adequately and sufficiently equality proofed”.

Agreed: that a form of words on the above lines be included in the Committee Report.

Mr McNarry left the meeting at 4.00pm

Publicity to the Legislation when Introduced

Agreed: that the proposed draft recommendations re publicity be included in the Committee report.

5.4 Action on Draft Report

Agreed: that the Committee Clerk should take account of the Committee’s decisions to finalise the Report. A revised version should be circulated to Members on 15 October and any minor amendments or a “content” reply should be sent to the Clerk by close of play on 16 October.

Agreed: Committee Report ordered to be printed (on 17 October).

Agreed: that the Motion proposed by the Chairperson be tabled in the Business Office for the plenary debate on 4 November.

Agreed: that the witnesses be notified of the date and indicative timing of the debate.

6. Any Other Business

Dr Farry mentioned the impact of the legislation on existing hate crimes provisions. It was agreed that related issues such as this could be mentioned during the plenary debate on the Committee’s Report on 4 November but were not appropriate for coverage in the Report.

Agreed: that the Chairperson should sign off the minutes of the meeting on behalf of the Committee to allow them to be included in the printed report.

4.20 pm The Chairperson adjourned the meeting..

Mr Peter Weir MLA
Chairperson, Ad Hoc Committee
16 October 2008

Appendix 3

Minutes of Evidence

23 September 2008

Members present for all or part of the proceedings:
Mr Peter Weir (Chairperson)
Mr Alban Maginness (Deputy Chairperson)
Mr Stephen Farry
Mr Danny Kennedy
Mr Alex Maskey
Mr Raymond McCartney
Mr David McNarry
Mr John O’Dowd
Mr Declan O’Loan
Mr Ian Paisley Jnr
Mr David Simpson
Mr Jimmy Spratt

Witnesses:

1. The Chairperson (Mr Weir): We proceed to the evidence session, and I invite Mr Grzymek to make his presentation to the Committee.

2. Mr Brian Grzymek (Northern Ireland Office): I have brought a few people to cover the range of questions that might arise in the meeting. James McKay is one of the Northern Ireland Office’s (NIO) legal advisers, and he has been involved in drafting the legislation; David Hamill is one of my staff; David Kyle is one of my deputies in the NIO; Ray Jones is attending on behalf of the chief executive of The Compensation Agency; and Henry Spence is from the Department of Finance and Personnel (DFP), and he can provide helpful advice on the rating aspects of the proposal.

3. I will give a 10-minute overview of the background of the proposal and the areas to which it relates. We are here to clarify the background and circumstances of this proposal and to listen to the Committee. This afternoon’s meeting is part of a consultation process. Yesterday, I spoke to the Minister about today’s meeting, and he asked me to convey his apologies for his non-attendance; he has party business to attend to. However, he stressed that he wants to develop the proposed process, and he is happy to listen to the thoughts and considered views of members of the Committee.

4. The draft Criminal Damage (Compensation) (Amendment) Order (Northern Ireland) 2008 is part of a wider consultation that the Government are developing. We are seeking the views of the Assembly, and others, on the proposal to introduce additional criteria to the Criminal Damage (Compensation) (Northern Ireland) Order 1977. The criteria relate, specifically, to community halls, and I will explain how they are defined in the proposal. The consultation was initiated in June, when the NIO issued a consultation document that was laid before Parliament. It was sent to the Assembly, and all Members have received a copy. It was also distributed more widely within the community, and we have received a number of responses already.

5. The aim of our proposal and the new criteria is to provide additional access to statutory compensation for designated community halls, which are at risk of being subject to criminal damage. The damage caused by attacks, the loss of the facility and the repair costs, for instance, for the community halls can have a serious detrimental impact on the local communities in Northern Ireland, which rely on those facilities for many purposes.

6. Community halls play a vital role in maintaining the strength and social infrastructure in the areas that they serve. Therefore, the Government believe that it is right that steps are taken to support the local facilities through amending the Criminal Damage (Compensation) (Northern Ireland) Order 1977 in relation to statutory criminal damage compensation.

7. I am sure that members are aware that the general trend towards criminal damage in Northern Ireland has been in decline in recent years, and that is reflected in the activity of The Compensation Agency. The Government see that as part of their normalisation strategy in Northern Ireland. In the past number of years, the Government took the view that criminal damage in such buildings as community halls was a matter for the commercial insurance industry rather than the statutory system. The current limited statutory criminal damage scheme was seen as being sufficient. Members might recall that it focuses on damage that is caused by three or more persons or by an organisation, and which, subsequently, results in a Chief Constable’s certificate.

8. That being said, in 2006 and 2007, in particular, there was an unexpectedly sharp increase in the number of attacks on isolated and vulnerable community halls in many parts of the Province. Linked to that, perhaps, in May 2006, the DUP proposed an amendment in Parliament that sought to include some additional buildings under subsection 4 of the Criminal Damage (Compensation) (Northern Ireland) Order 1977. In effect, that would have included buildings that are exempt from rates because of their usage and their belonging to one of eight specified organisations — that relates to some earlier rating legislation. Had the amendment been successful, those buildings would have been treated as if they were agricultural buildings for the purpose of criminal damage legislation. They, therefore, would have been included, almost automatically, under the terms of the legislation if they were subject to significant criminal damage.

9. That amendment was supported by virtually all the local parties in Northern Ireland, along with the Conservatives and Liberal Democrats. However, it was defeated in the parliamentary vote. The Government recognised that widespread cross-party support for the amendment, including the support of all the Northern Ireland MPs who were present in the House at the time. After that amendment was defeated, they decided to give further thought to the issue, which was clearly one of concern across political parties in Northern Ireland.

10. The damage caused by attacks on community halls, the loss of the facility and the repair costs can have a significant impact on the local communities that use the halls. Typically the halls that are subject to damage are isolated, and they often do not have large memberships or commercially related links, such as bars, that can provide them with a source of income. They are, therefore, quite vulnerable. Those halls are often isolated, and they clearly cannot access the existing criteria under the current statutory compensation arrangements. Even if they could, it is often the case that there is no evidence to support their claim. It may well be that three people had attacked the hall, but if it happens in the middle of the night, no one may have seen the attack taking place. Thus, in exercising its responsibilities, The Compensation Agency may not be in a position to conclude that compensation is appropriate.

11. There are particular problems for those types of halls, particularly in rural and isolated areas. Essentially, it comes down to the difficulty in obtaining evidence to prove that the damage was caused by three or more people. The police clearly do all that they can to ensure that those halls are protected, but they cannot sit outside every rural community hall 24 hours a day. If they are not there, they may have difficult in obtaining evidence or may be unable to certify that the damage was the result of terrorist or paramilitary activity.

12. The increase in attacks on those halls caused further problems for the people who owned or managed them because they had a detrimental effect on their insurance premiums. We received reports that some facilities were finding it increasingly difficult to sustain normal insurance arrangements. In other words, they became even more vulnerable because they were not insured and they did not have access to statutory compensation. Thus, for such organisations or facilities, an attack could be terminal.

13. Ministers and officials met the insurance representatives, essentially with the aim of looking for a commercial insurance solution to the problem. Unfortunately, those meetings were inconclusive, and with the number of attacks increasing in 2007, Ministers felt that, as an alternative, consideration should be given to mending the current criminal damage provisions. The outcome was that the Government decided that the best way forward was to add a further criterion to the current Order to give all eligible community halls easier access to compensation for criminal damage. The big problem was defining what we meant by community halls. There is another side to the coin; although we wanted to protect those isolated and vulnerable halls, at the same time, most facilities in Northern Ireland are covered by insurance — and rightly so. The Government did not want to distort the insurance market by giving wide-scale access to statutory compensation where it was not necessary.

14. That would have had an immediate impact on the Exchequer, and downstream, if passed on to a devolved Administration, might well have carried with it a significant cost — a cost that should, perhaps, be borne by the insurance industry but that, instead, could have fallen to Government.

15. Our main concern, therefore, was to see how best to focus the legislation so that it addressed the problem in point about isolated community facilities, yet at the same time was not so wide-reaching that it resulted in a distortion of the insurance market or, indeed, a change in behaviour.

16. The Government looked at how those eligible community halls that they wanted to target could be distinguished from other halls. In discussions with Department of Finance and Personnel colleagues and others, it was concluded that the new criteria for the Order should be targeted at, and specific to, community halls in the same way as for rates exemption. There has already been a great deal of work on the rating side in order to identify community halls that receive exemption from rates under the Rates (Northern Ireland) Order 1977.

17. The Government, in looking at how to identify the range of community halls that they were seeking to target, was drawn to two elements of the Rates (Northern Ireland) Order 1977; first, article 41(2)(e), which relates to halls or facilities that are deemed as being used for charitable purposes under the Recreational Charities Act (Northern Ireland) 1958; and, secondly, article 41A, a more recent addition to the Rates (Northern Ireland) Order 1977, which, in effect, extended it to cover a small number of named organisations.

18. Those two sections together refer exclusively to buildings that are used wholly or mainly for the purposes that are declared to be charitable under the Recreational Charities Act (Northern Ireland) 1958, or, in the case of those covered by article 41A, are used or are available for such use.

19. Taking that approach, the Government have gone further than the 2006 amendment. Rather than limiting the proposal to the eight bodies listed in article 41A of the Rates (Northern Ireland) Order 1977, the Government have expanded the provision to include other community halls that are exempt from rates under article 41(2)(e) of the Rates (Northern Ireland) Order 1977. That, in essence, broadens the coverage to quite a wide range of halls, which serve their local communities across Northern Ireland.

20. The Government’s concerns were initially raised by attacks on Orange Halls, of which there was a spate, particularly in 2007. Having said that, other halls are vulnerable, too, and the Government, in looking at this area, thought that important and focused on community halls that are used for charitable purposes. It is, therefore, much broader than looking at just the eight organisations, including the Ancient Order of Hibernians and the Order of the Knights of St Columbanus. The aim was to broaden that list in order to cover more at-risk halls while, at the same time, not creating such a large spread of coverage as to distort the insurance industry or other practices.

21. Eligibility for compensation will be dependent on the individual property meeting the already established criteria under the relevant parts of the rates legislation. That makes it relatively straightforward to identify halls that are covered, and will give some certainty with regard to coverage. That was considered to be the fairest and simplest way of focusing the legislation on community halls that are being used, or able to be used, for community welfare purposes.

22. The amendment simply creates an additional route to statutory compensation for those community halls that are exempt from rates under the relevant DFP legislation. The majority of facilities would already be eligible under existing statutory criteria — up to two thirds or more of facilities suffering criminal damage would normally be covered in any event under the three or more persons involved in the attack, or Chief Constable’s certificate, criteria.

23. However, that clearly left a gap. The aim of this addition to the legislation is to help to close that gap. Therefore, properties that may suffer criminal damage are still eligible to apply for compensation under the current provisions of the Criminal Damage (Compensation) (Northern Ireland) Order 1977. At the same time, this amendment broadens that coverage to areas that were identified as being in the gap.

24. The Government appreciate that the proposed provision is focused on community halls at a time when our society is moving forward and criminal damage is generally on the decline. Therefore, they have had to weigh up the need for the legislation — that is, a specific, short-term problem — against their commitment to promoting normalisation of arrangements in a post-conflict society. They appreciate that an open-ended commitment to extending statutory compensation could distort the commercial insurance market and involve a commitment of further public expenditure that would stretch beyond the life of the current Administration and into that of a future devolved Department.

25. The amendment provides a simpler route to applying for compensation for community halls that are exempt from breaks under articles 41(2)(e) or 41A. The Government consider that to be an exceptional arrangement, and one that they would see terminating as normal society gains strength in Northern Ireland. For that reason, they propose the additional criterion that the legislation will have a sunset clause, so that it is time limited to a period of three years. This is in recognition of the fact that the recent increase in the level of attacks on community halls runs against the prevailing trend because, even since last year, there has been a downward trend in the number of attacks on such halls.

26. The Government see a current need for the legislation but their hope and expectation is that the need will disappear over the life of the legislation, hence the legislation can be allowed to lapse. That is why the Government have included the sunset clause of three years, after which the legislation would lapse unless the Minister at the time assessed what had happened during that time and decided that the legislation was still required — in that instance, the Assembly would have the power to extend the legislation for a further period.

27. Finally, the Minister acknowledges that the proposed legislation does not and should not cover all facilities in the community. Some people, I am sure, will argue that the legislation could go further. The Minister is concerned that the legislation must be carefully targeted to avoid an open-ended extension of statutory intervention in this area. The Government consider the proposal to be a workable and manageable way of dealing with the issue of increased attacks on community halls. The proposal focuses resources on supporting isolated, vulnerable, yet vital community facilities that have been at risk of increased criminal damage and that have not been effectively covered by the current criminal damage legislation.

28. That is a run-through of what has led to the legislation — I am conscious that the Committee will have several questions. My job and that of my colleagues is to give some clarity on the thinking behind the Minister’s proposals if we can and, otherwise, to listen carefully to members’ thoughts and relay them to the Minister.

29. The Chairperson: Brian, you indicated that you have received some responses to your consultation already — will you give some more detail about that?

30. Mr Grzymek: We have received telephone calls and some queries seeking clarification, but I do know whether we have received any formal responses yet.

31. Mr David Kyle (Northern Ireland Office): No, we have not.

32. The Chairperson: I was going to say that if you have received any formal responses, it would be useful if you could share those with the Committee Clerk.

33. Mr Grzymek: I am happy to do that. As good practice, we are publishing responses on our website as they are registered, so they will be available to anyone who wishes to see them.

34. The Chairperson: Given that there are representatives from DFP and The Compensation Agency here, I wonder whether either of them would wish to add anything to what has been said.

35. Mr Ray Jones (The Compensation Agency): I want clarify the understanding of what the legislation involves. If something happens to property, there are, in the real world, primarily two criteria by which a person is normally successful in making a claim. One criterion is that a proscribed organisation is responsible and the police will evidence that by issuing a Chief Constable’s certificate; the other is that there is some evidence that three or more people were involved. The real difficulty is that there are some damaged properties for which neither of those can evidently apply.

36. As the legislation stands, the other limited opportunity for making a successful claim relates to agricultural property, wherein neither of the other two criteria must apply. The claimant does not have to prove who did what, when or where, he or she needs only prove that the damage was not the result of an accident — for example, that there was some malicious intent behind what happened. The reason that I mention that is because that is how the legislation will work in the real world.

37. The legislation is so open that claimants only have to prove that it was not an accident; therefore, it must be evident to my staff how eligibility is defined and, to a certain extent, confined. It is important for the legislation to be clear. There is an identifiable group of folk who may claim eligibility for damage compensation in a very evident way. The legislation defines exactly how that entitlement is arrived at. I refer specifically to the eligibility for rate relief, which is clear; therefore, it will be simple for people to make a claim, and it will be easy to identify whether claimants are eligible and whether their claims can be met. From my perspective, that is fundamental to the legislation.

38. The Chairperson: Do you wish to add anything to that?

39. Mr Henry Spence (Land and Property Services): I have nothing to add. Everything has been covered.

40. The Chairperson: Thank you for your presentation.

41. Mr Paisley Jnr: Thank you for your presentation. I am generally supportive of the legislation. It is a good attempt to close a gap in the current criteria. With that in mind, I wish to turn to article 4A(5), which is the sunset clause. Why is it necessary to have a sunset clause? There is a gap that needs to be closed, but it will only be closed for a period of time and then reopened. It would be better to reverse the sunset clause, and if the Minister believes that it is necessary to remove it in the future, he can introduce a piece of legislation to remove the criterion. That is the only criterion that is subject to a sunset clause. I wonder whether there is any way in which that could be reversed.

42. Mr Grzymek: Different approaches can be taken, and Shaun Woodward raised the issue with your colleagues in Hillsborough earlier this year. The sunset clause was recognition by the Government that, in essence, we are moving towards normalisation. Prior to 2007, there were relatively few attacks on community halls, and, since then, the number of attacks has decreased again.

43. The Government are concerned that anything that we do to extend the statutory compensation criteria ultimately influences and distorts the normal market for insurance, which covers the vast majority of premises in Northern Ireland. There was a serious increase in the number of attacks in 2007, which convinced the Minister that something had to be done. However, the perception was that, as we move towards normalisation and a post-conflict society, those sorts of attacks are on the decline. They were on the decline before 2007, and the expectation is that 2007 was a blip.

44. Ultimately it will take a year for the legislation to come into operation. Therefore, with three years running, that will be a total of four years of subsequent evidence after 2007. If there were a significant number of attacks during that period, the Government’s expectation is that the Minister will exercise his/her views on whether that would constitute a renewal in the legislation. The Government’s current assessment is that normalisation should remove the need for the legislation over the next few years. Therefore, on that basis, Ministers decided to include the sunset clause.

45. Mr Paisley Jnr: I agree that we should all live in hope, but the unfortunate thing is that when the sunset clause kicks in — when the legislation expires at the end of 2012 or in the spring of 2013 — some poor community association or Orange Hall up the country will end up being attacked and will be exempt from benefiting under this piece of legislation. It would be better if the legislation continued to run until a Minister determines that the threat has ended, rather than it ending at an arbitrary point that we set now when we cannot foresee the future. Perhaps you should take that point back and consider whether it is possible to make amendments to it.

46. My other question is about problems with interpretation of the meaning of the Order. Do you foresee any problems with interpretation? I am worried that the Order comprises a page and a half, but the explanatory document comprises 27 pages. The Recreational Charities Act (Northern Ireland) 1958 refers to properties of “social welfare”. The draft Order refers to community halls and:

“buildings used or made available for use for charitable purposes”.

47. You also spoke about rates-exempt buildings. Perhaps I am being pedantic, but do you foresee any problems with the interpretation of the Order? If so, is there a way of smoothing that out so that everyone knows exactly what the criterion means and to whom it applies?

48. Mr Grzymek: The explanatory document was of the length that it was because the Order is simple. We are not trying to invent new definitions; we are trying to link new criteria to existing definitions, which are available and have been tested in rates legislation. All the best Orders are often simple and short. The explanation tries to give more of a rounded view, to indicate where the Order is coming from, and how it links into the definitions. The NIO’s view is clear cut: we are working on existing definitions. That is one of the strengths of the Order.

49. The draft Criminal Damage (Compensation) (Amendment) Order (Northern Ireland) 2008 includes a phrase that adds one additional criterion. Having consulted with colleagues who are responsible for rates legislation, we think that that is a workable and practical solution. Our legal advice is that that is not in any way ambiguous and that it should be straightforward and clear cut. My colleagues may want to speak on that from a legal or a rating perspective, but I do not perceive a problem with clarity of definitions.

50. Dr Farry: I want to comment on the proposed sunset clause. Could a middle way be found, which would give the Assembly the ability to renew the legislation, perhaps through an affirmative resolution? As the draft Order stands, a future Minister could address the sunset clause, but the Assembly would be asked to pass similar legislation. Would a process by which the Assembly had the ability to renew the legislation for a period by affirmative resolution be simpler than going through the exercise of legislative process?

51. Mr Grzymek: I will answer that, and my colleagues may wish to add to my comments. The Secretary of State is dealing with a problem that exists now. A year ago, Shaun Woodward may have hoped that a different sort of Administration would be in place, so that the legislation would have been the responsibility of the Assembly. As that point has not been reached, the Government have to exercise the role of good government. The legislation does not predict what the Assembly may decide to do in the future; it seeks to put a finite arrangement in place. In a future devolved Administration, the Assembly could use the legislation and the Minister responsible could decide to renew it.

52. Equally, the inclusion of the sunset clause means that the Government are not constraining or fettering the Assembly in the decisions that it may make in the future. The legislation deals with the current position; it does not lock the Assembly or the Executive into a future structure. It deals with an immediate problem, which the Minister thinks will have lapsed after three years. At that point, if the problem still exists, it would be for the Assembly to decide whether it wishes to renew the legislation. If a better solution is found, the Assembly could legislate for that. In the meantime, the Government have to deal with the issue. It has come before the Assembly Committee and Parliament to ensure that local views are considered.

53. Dr Farry: My second question relates to the eligibility criteria, the qualification for which is rates exemption. Does that refer to a building that already receives a rates exemption, or does it refer to a building that is eligible for rates exemption?

54. There are particular problems with Land and Property Services (LPS) and the take-up of rates relief at the moment. One can envisage a situation where a building may be potentially liable or eligible for rates relief but has not applied for that relief for whatever reason.

55. Mr Grzymek: I do not think that any Government can force people to avail themselves of rates exemptions or this type of legislation. Maybe my colleague from LPS could explain what steps the Department of Finance and Personnel has taken to try to increase uptake. We are quite clear that the proposed legislation relates to facilities that are exempt from paying rates. That means that they are contained within the listed bodies for the purposes of article 41A. Groups that are on the list know that they are listed. There are only a small number of bodies that are physically listed and, therefore, covered by the Rates Order 1977. Alternatively, some organisations have started the process of becoming listed, but that listing has not actually come into effect. If those bodies have applied to be listed prior to any damage caused, and become listed after the damage occurs, they would still be covered.

56. From the point of view of community halls that may be affected, this Government have provided them with an opportunity to be exempt from rate payments, and we are now giving them an additional route to access criminal damage compensation. It is clearly in their interests as individual organisations to avail themselves of this, but, at the same time, we cannot force individuals to do so. On the rate side —

57. Mr Spence: Following the amendment in 2006, we wrote to all halls that we thought would be eligible under the new legislation to explain it, and the basis for qualification for exemption. We had a large uptake of applications. We feel that most of the halls that are eligible would already be listed, but, again, they are still open to apply.

58. Dr Farry: My third question then: has the legislation been proposed to address a gap or failure in the insurance market, wherein particular halls either cannot get insurance or are subjected to premiums that are too high because of the threat of future damage or past incidents that have occurred? Presumably, in two respects, there is a deadweight attached to this intervention in that it will cover halls that are able to avail themselves of insurance at a reasonable rate. At the other end of the spectrum, is there potentially a danger of an insurance gap emerging, where there may be halls that are not eligible or will find it difficult to achieve reasonable premiums? This scheme would only protect them in relation to overt criminal damage, but could you envisage a situation whereby a hall is subject to an accidental fire, and there would not be anything in place to protect it because such halls cannot avail themselves of a more general insurance policy?

59. Mr Grzymek: I think that it is important that Ministers do not see this legislation as being totally focused on the insurance industry. We are focusing on valuable community halls, which — because there has been an increase in attacks on such facilities — are at risk.

60. It is true that, because there have been more attacks, it may be that they are finding insurance premiums increasing in cost. I am equally sure that when this legislation is passed —assuming that it is passed — that this will be factored into insurers’ future risk assessments. In some ways, this is about risk, and we have to recognise that in the vast majority of facilities in the community, which suffer criminal damage or significant criminal damage, those buildings are already covered by statutory compensation for criminal damage.

61. We recognise that there has been an increasing number of attacks. There are halls that are vulnerable — quite often those halls will be isolated, with a small number of members, or will support a very small local community, which is not terribly well-off. We are not talking about facilities that have their own bars or commercial outlets with the capacity to support themselves through insurance and deal with many of the consequences of damage. We are talking about very small facilities, which do not serve big communities and are not very resilient. I think that that has been the Government’s focus, but the aim has not been to indemnify the insurance industry from risk. In essence, the Government’s view is reflected in the sunset clause. The aim is that as things progress and the risks become clearer and more easily insurable, and as this legislation lapses, insurers would have a time stream of evidence of low levels of attack and that would factor into insurance premiums. I understand that you will be talking with the insurance industry separately.

62. Mr Kennedy: One of the ironies of the situation is that, particularly in the case of Orange Halls, the majority of them have been attacked only since we, allegedly, have had peace, and that is the difficulty that we have with the sunset clause. Many of those halls are in rural, isolated areas, and they are fairly easy prey for low-level sectarian attack. Nevertheless, serious damage has been inflicted on those Orange Halls, community halls and other premises. If the sunset clause were rewritten or readdressed, the Assembly — or whatever body was responsible — could ensure that it was subject to ongoing review by the appropriate Minister, either locally or from Westminster.

63. My other concern is that the parliamentary journey that is envisaged will mean that the commencement date is likely to be at least a year away?

64. Mr Grzymek: No. Without prejudice, I am conscious that the issue is going through a consultation process and, depending on the outcome, we will produce the final legislation that will then go through a legislative process. On a good day, with the wind behind us, we would expect to get the draft Order to Westminster before the end of the calendar year. If it were to go through Westminster in late November or early December, we would hope to have it in legislation by January or February, with the expectation of a start date — again, without prejudice — of April or May. The Secretary of State has made it clear that he wants the matter to move quickly. The need has already been recognised, and, therefore, it would not be helpful to have the legislation introduced a year or two later. We are pulling out all the stops to try to make it move quickly, but it will probably be next Easter before it is introduced.

65. Mr Kennedy: Is it possible to subject the legislation to accelerated passage?

66. Mr Grzymek: In essence, the Government have looked at that suggestion and, it is fair to say, they are giving the matter a fair wind to move it as fast as possible. At the same time, I do not think that the extent and severity of the problem is such that Ministers have felt that they could persuade their colleagues in Government that the matter should follow a more accelerated route. The legislation is being taken forward very quickly.

67. Mr Kennedy: For the period in which the legislation will apply, what process do the trustees or owners need to undertake when damage has been done to a hall that is exempt from rates and, therefore, qualifies technically? Do they still require a Chief Constable’s certificate or —

68. Mr Grzymek: No.

69. Mr Jones: As I said earlier, there are two criteria, the Chief Constable’s certificate and the three or more people. Those are not mutually exclusive but, in this instance, one could ignore those two criteria if needs be, provided that the premises are shown on the list — if you like, keeping it quite simple. That, in itself, will establish eligibility and entitlement at a stroke.

70. The normal processing of claims requires issues such as exploration of legal title and assessment of the actual quantum of cost for putting right the damage, etc. Those processes take their own due time. However, as regards eligibility, if one can demonstrate that the premises are on the list, that part of the detail is already taken care of. It will then go through the administrative process where the details of quantum will be sorted out.

71. Mr O’Loan: I would like more clarity on which buildings the draft Order will cover. I am particularly concerned about churches, church halls, buildings associated with, or built on, sports grounds — changing facilities or social buildings — and council-owned buildings.

72. Mr Grzymek: We have focused on isolated community facilities that provide social-welfare-type support. Those are covered by articles 41(2)(e) or 41(a). On the face of it, the facilities that you listed would not be covered. The Government’s aim is to address the problems faced by those who use a number of halls that have come under increasing attack. My colleagues in The Compensation Agency and I considered the evidence of attacks across the range of halls in recent times, and the number of claims received by The Compensation Agency from those groups has not been significant.

73. That does not mean that there are no council or sporting facilities that have not been vandalised or damaged from time to time. Rather, in fact, there has been a fairly uniform rate of attack, as far as we can tell. There has been a significant increase in wanton attacks on some community halls, in many cases resulting in serious damage. The Government are saying that the users of those other facilities, in circumstances in which the attack was carried out by three or more people, or by a paramilitary organisation, may apply for a Chief Constable’s certificate. Those bodies, in the main, will have their own insurance, and if they have not been subjected to a campaign of attacks, their premiums are more modest. The Government have been trying to focus the legislation on what they consider to have been the recent problem, rather than to cover more general societal concerns about criminal damage, which are, to a reasonable degree, covered by the existing legislation.

74. Mr O’Loan: I want to be clearer about that. I understand that the motivation for the legislation was to cover isolated and vulnerable rural buildings. What precisely in the wording of the Order restricts the applicability of the legislation to that type of building? What rules out the buildings on the list that I offered?

75. Mr Grzymek: In essence, all the buildings that you mentioned are covered by various pieces of rating legislation. Sports halls are covered under article 31 of the Recreational Charities Act (Northern Ireland) 1958, and church facilities and council facilities are covered under different sections of article 41 of the Rates (Northern Ireland) Order 1977. We have taken some trouble to try to focus as closely as we can on organisations that provide social-welfare-type functions under the 1958 Act. Those are covered by article 41(2)(e) and 41A of the draft Order.

76. Mr Spence: The church halls and sports halls and grounds all come under different parts of the legislation. Sports grounds get a sport and recreational rate relief exemption of up to 8%, but they do not come under the two articles of the draft Order that were mentioned.

77. Mr O’Loan: If a claim was to be made under the draft Order, is there an excess that must be paid by the claimant?

78. Mr Grzymek: The draft criminal damage Order sets a general excess amount of £200. That exemption amount has been in place since 1990. The Government reviewed that amount recently and decided to leave it at that level. It is a relatively modest amount.

79. The Chairperson: Am I right in saying that the legislation excludes a number of premises that have been mentioned, such as halls or clubs with alcohol licences, and registered clubs?

80. Mr Grzymek: Both types of premises are specifically referred to in article 41A.

81. Mr Spence: Yes. Any property that has a licence is specifically excluded.

82. Mr A Maskey: Mr Spence, you said that you had contacted a number of organisations that you felt might be eligible for a rates exemption. Which organisations would not be eligible?

83. Mr Grzymek: We sent out information to every hall on the valuation list as we thought that they were all potentially eligible.

84. Mr A Maskey: I am not sure whether Mr Spence can answer this, however, were there any organisations that came into that final category mentioned by the Chairman — halls that may have a social or club element — that are not eligible? Can Mr Spence give me any example of halls that are not eligible, which have been damaged in exactly the same way as those halls that are used for social-welfare purposes? Although he is saying that they may be covered under other legislation, could any of those other halls have been excluded from compensation?

85. Mr Spence: I do not know; I was just dealing with the rates end of things.

86. Mr A Maskey: The point that I am making is that those facilities were attacked for exactly the same reasons as the social-welfare halls that you are describing.

87. Mr Grzymek: I think that I can answer that a little. The truth is that it is very hard to compare like with like. We were trying, as best we could, to focus on the more isolated community-type halls, and we were using the rates legislation to give us a practical working definition. Clearly, sporting and other facilities can, on occasions, be attacked; we looked at The Compensation Agency’s records over a number of years to see who had made claims. That is not always easy to work out; a claim could come in against an individual, trustee or committee, so it is sometimes hard to accurately interrogate the data. Certainly, the level of claims against some of the groups not eligible for an exemption was very low in contrast to the groups on which we are trying to focus. Those other organisations still have the capacity to get compensation under the other criteria in the legislation, so that was not seen as a high-level problem.

88. Indeed, for a number of recent years, it was suggested that there have been a lot more attacks on some types of hall. In 2007, there was a spate of serious attacks, but for two or three years prior to that, the number of attacks was down. The Government are not trying to extend statutory compensation to cover every potential eventuality; rather, the Order is trying to pick up on a particular area and focus sharply on that problem. The expectation is that this is a transient problem, which, all being well, will disappear after a period; we are trying to keep the provision to a limited duration.

89. Mr A Maskey: What I am trying to work out in my mind is that if the Order is being devised to deal with a problem, which surely emanates from attacks on a number of vulnerable facilities that may not qualify for exemption for various reasons — because they cannot get a certificate; because they cannot prove that the property was attacked by three or more people — how will that gap be closed?

90. If the intention of the Order is to close the gap for people who otherwise may not be eligible under the existing narrow legislation, surely, that intention needs to be followed through. There may be organisations, which in some cases have, for example, a licence for alcohol, but only experience an extremely low level of usage. Some of those facilities have suffered severe damage and may have been closed as a result; however, under the definition of the new Order, they would still be excluded. The intention of the Order, in my view, falls short.

91. Mr Grzymek: The Government have tried to focus this as best we can; by definition, there are always going to be problems on the margins. For example, there may well be some facilities that could be covered under the exemptions of 41(2)(e) because they are largely or substantially being used for social welfare, but have not applied for that exemption. People have to look at whether their halls or facilities might be exempt. The legislation is trying to pick up the vulnerable end of things. Facilities that have licences or other commercial activities are in a different position from those small vulnerable halls.

92. A decision always has to be made on where to draw the line. The Government are concerned that broadening the definition very slightly would make it difficult to prevent it from being broadened much more. That could have the serious and unintended consequence of distorting the insurance market. The Government were trying to target public money as best they could.

93. The Chairperson: I appreciate the point that Mr Maskey made about the explanation. Article 41A(2)(b)(ii) states:

“on which a person may under a licence (other than an occasional licence) or a protection order sell intoxicating liquor by retail”.

94. I do not think that a facility would be exempt if it used its licence only very rarely.

95. Mr McNarry: I endorse the comments that have been made about the sunset clause. The sunset clause should be removed, and there is nothing else to be said on that matter.

96. You referred to interpretation in your answer to another question. It probably does not have anything to do with the draft Order, but my question concerns its application. Do you think that the implementation of the Order will result in more resources being made available to provide compensation for halls that need it?

97. You are going to add more vulnerable halls to the list. We all hope that there will not be more casualties but, as you have said, there have been casualties in the past year. Will a provision be made in the Order to ensure that resources are provided for a claim to be done and dusted quickly?

98. Mr Grzymek: The short answer is yes. The legislation was drafted on the basis of estimates. We calculated the likely maximum and minimum requirements — based on our analysis of claims made over a number of years — and factored those into our spending for the 2007 comprehensive spending review period. Those estimates could be too high, which would be fine because there are plenty of other things that we could spend money on in the criminal justice system. If the estimates are too low, we would have to press the Government, and the Department would have to find a way to meet the need.

99. We have assessed the incidence of attacks and the associated costs. The majority of halls that are attacked are covered. About a quarter or a third of halls that make claims are not covered, and their cases are passed to insurance companies. We are not dealing with vast numbers but — based on estimates — the halls that are not covered are factored into our spending analysis.

100. The Chairperson: Who from the insurance business should we invite to give evidence to the Committee?

101. Mr Grzymek: My colleagues have directed the Clerk to the Committee on that matter. David Hanson — who was Minister of State at the Northern Ireland Office before Paul Goggins — met insurers early in the process. We have given the Committee Clerk the name of someone who can update the relevant contacts.

102. A significant proportion of insurance for these facilities has been provided by three main insurers — Zurich, Royal Sun Alliance and a third, the name of which I have forgotten. The Committee should contact one of those insurance groups. I think that the contact in Zurich Insurance had a link to the Association of British Insurers.

103. The Chairperson: Before bringing in the two members who have indicated that they want to speak, is there anyone who has not spoken who wishes to do so?

104. Mr Paisley Jnr: I have already spoken but I want to raise an issue that has not yet been covered.

105. The Chairperson: If it is something on which you require clarification, I will bring you in at the end. Preference must be given to people who have not had an opportunity to speak yet.

106. Mr Simpson: I was attending another meeting, so I apologise for being late. The point that I wish to raise may already have been covered, so I apologise for that as well.

107. First, I wish to echo what some of my colleagues said about the sunset clause, which must go.

108. If an isolated hall — irrespective of what sort — has a small membership, it may not qualify for rates relief, because it does not have a community organisation with which to vote, and, in a doomsday situation, the organisation may not be able to afford the hall’s insurance premium. Is such a scenario covered under any part of the legislation?

109. Mr Grzymek: There will be small facilities. Article 41(2)(e) and article 41A of the Rates (Northern Ireland) Order 1977 provide two routes that such bodies might take. Article 41(2)(e) identifies a small number of organisations, which, if they are available for the stated purposes, will be covered. However, the reality is that if an organisation has a hall, it is eligible for rates. Although we cannot force people to seek rates relief, if a hall serves the local community for social-welfare purposes and it is rated, it would make good sense for the trustees to take steps to have the hall identified as eligible for rates relief. If a facility does not provide any social or community input, it is not the sort of body that the Government are aiming to support, and it must source its own insurance.

110. Mr A Maginness: I agree with the draft Order’s general objectives. As a lawyer, I have encountered cases in which people have suffered great injustice, and people in situations not dissimilar to those already mentioned have been deprived compensation. For many ordinary people, such an outcome is heartbreaking.

111. Throughout, you have used the term “isolated community buildings or halls”. I cannot see where “isolated” is defined in the legislation. You referred to articles 41(2)(a) and 41A; however, “isolated” does not appear to be expressed anywhere in the legislation. I am at a loss to know how you have managed to import the word isolated into the legislation.

112. Mr Grzymek: I said that the Government’s focus has been on isolated halls, which is where the majority of the problems have been. In reality, the legislation does not single out isolated facilities. It will also cover community halls in town centres. Nevertheless, in practice, if a facility in the centre of Belfast is attacked by several people, the chances of that incident qualifying for statutory compensation for criminal damage by three or more people are fairly good. If a facility in Crumlin or Ballywalter — outside a town — is attacked in the middle of the night — even if 10 people are involved, the likelihood of obtaining sufficient evidence to determine, on the balance of probability, whether the incident would be covered by existing criteria would be more problematic.

113. Isolated properties had been the concern but we are, essentially, adding to existing criteria to cover agricultural properties, attacks by three or more people or attacks that warrant a Chief Constable’s certificate. We are adding to the portfolio of criteria, which will, probably, give disproportionate advantage to those isolated facilities. A facility could be attacked in a town during the night, and there could be no evidence. That would mean that the police cannot tell the agency that three or more people have committed the crime. Therefore, in that circumstance, it is acceptable that such facilities will benefit, too.

114. Mr A Maginness: Is it the Government’s intention to remedy the difficulty where isolated community halls are attacked and people cannot receive compensation? That objective is not necessarily covered by the legislation.

115. Mr Grzymek: The Government are keen to acknowledge attacks on community halls. It is reasonable that statutory criminal damage legislation should support those halls regardless of their location. Generally, it is probably easier for non-isolated halls to access criminal damage compensation.

116. However, the focus is specifically on community facilities covered by either article 41(2)(e) or article 41A. The Government are content that that legislation will protect community halls that provide important support in rural and urban areas. If such halls are attacked and seriously damaged, but three or more persons are not involved, they will still satisfy that criteria.

117. Mr A Maginness: Do those halls have a social-welfare function? How is that social-welfare function defined?

118. Mr Grzymek: We are, in essence, piggybacking on existing rates legislation. Henry can explain the link between the examples and the 1958 Act.

119. Mr Spence: The hall must be used mainly for purposes — normally social-welfare purposes — considered charitable under the Recreational Charities Act (Northern Ireland) 1958. The people who use the hall must need such facilities because of their age, youth or infirmity, or they must be available to the public at large.

120. Mr A Maginness: You said that sporting facilities are excluded because they are covered by a different section of the Rates (Northern Ireland) Order 1977. Does that mean that they do not have a social-welfare function?

121. Mr Spence: A hall that is used for a youth club or sporting facilities could be considered under that legislation.

122. Mr A Maginness: Could it be considered under this legislation?

123. Mr Spence: Yes.

124. Mr Grzymek: In essence, we did not intend to reinvent the wheel. Some community facilities are already covered by those exemptions. We want to use that definition to secure some degree of certainty, because organisations that are exempt know that they are exempt — they are published on a list, and, of course, they will have applied for that exemption. In the event of criminal damage, they are aware of the availability of that compensation route.

125. Mr A Maginness: When did article 41A come into operation?

126. Mr Spence: 1 April 2006.

127. Mr A Maginness: How many organisations took up the provisions of 41A?

128. Mr Spence: As far as I am aware, all the organisations listed —

129. Mr A Maginness: I mean, in terms of the properties that they own or manage.

130. The Chairperson: It may be useful if you could provide a written response.

131. Mr A Maginness: That would be helpful. An estimate of the number of community halls identified or estimated to have been affected would also be beneficial.

132. The Chairperson: Perhaps the officials could get back to the Committee on that particular point?

133. Mr Grzymek: I assume that Mr Spence could supply an estimated number of community halls that are listed as rates exempt under article 41(2)(e) of the Rates (Northern Ireland) Order 1977.

134. The Chairperson: Finally then, there was just one point that Mr Paisley wanted to clarify.

135. Mr Paisley Jnr: I would also appreciate a copy of the aforementioned list. I think that that would be very useful. You have said in the copy document that the proposed extension of the criminal damage compensation could cost — going from history — an additional £300,000 per annum. Obviously, it is difficult to estimate the full cost but —

136. Mr Grzymek: That was the top end of our range.

137. Mr Paisley Jnr: OK. Obviously, Ministers have committed to that amount. Can you give the Committee any indication as to where they are drawing those funds from?

138. Mr Grzymek: As stated, that figure is at the top of the range. However, when the Minister decided to proceed, it was factored into the CSR. Therefore, when it came to how the funds were divided across the sector, the Criminal Justice Agency will have given estimates as to what it predicts its costs to be —

139. Mr Paisley Jnr: However, there has also been an in-year bid for the CSR.

140. Mr Grzymek: In essence, the CSR will have allocated funds on a three-year basis to The Compensation Agency. That has been factored in. In relation to its total budget, it is not a substantial sum. However, it is real enough and it means that other areas will be receive slightly less funds

141. The Chairperson: I thank the officials for their evidence and the time that they have given the Committee today. The Committee will hear two further evidence sessions over the next two Tuesdays, each starting at 3?00 pm. Those sessions will be open to the public, and it would be helpful if the NIO had representatives present to provide clarity on any issues that may arise.

142. Again, thank you all for your attendance today and for answering all the questions that the Committee has put to you.

30 September 2008

Members present for all or part of the proceedings:
Mr Peter Weir (Chairperson)
Mr Alban Maginness (Deputy Chairperson)
Mr Allan 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:

143. 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.

144. 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.

145. 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.

146. 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.

147. 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.

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

149. 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.

150. 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.

151. 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.

152. 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.

153. 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.

154. 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.

155. 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.

156. 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.

157. 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.

158. 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.

159. 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.

160. 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.

161. 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.

162. 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.

163. 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.

164. 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.

165. 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.

166. 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.

167. 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?

168. Mr McNarry: I welcome you all, and I thank you for a plausible presentation and a good written submission.

169. 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.

170. 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?

171. 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.

172. 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.

173. 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.

174. 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.

175. 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?

176. Mr Singleton: It is difficult to say exactly what those numbers are, given the sheer volume of halls.

177. In percentage terms, I suspect that Orange Halls account for a very high percentage of those that have qualified — perhaps 80% to 90%. However, I cannot answer for other organisations.

178. Mr Kennedy: As I understand it, the presentation today is on behalf of the Grand Orange Lodge of Ireland and the Royal Black Institution. Are you aware of any representations being made by the Apprentice Boys of Derry?

179. Mr Singleton: No.

180. Mr Kennedy: Has that body not consulted with your organisations? In relation to insurance costs over the years, have attacks in certain locations led insurance companies to quantify halls in that area by postcode? The accusation is often made about home insurance that a certain postcode or location means that a high insurance premium must be paid. Does the Institution have any knowledge or experience of that?

181. Mr Millar Farr (Royal Black Institution): To answer the latter part of that question, I believe that to be the case. I can give examples of halls that were paying insurance premiums of around £400 10 years ago. In some instances that has risen to between £2000 and £2,500. Those increases have occurred as a direct result of other halls being damaged, burned or attacked — or whatever term you want to use — in the same area.

182. Mr Kennedy: Therefore, have those other halls not been attacked but are subject to higher premiums as a result of activities in other or neighbouring locations?

183. Mr Farr: That is correct. They seem to have increased —

184. Mr Kennedy: Escalated the premiums?

185. Mr Farr: Yes. Perhaps not every year, but certainly every other year.

186. 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.

187. 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.

188. 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.

189. 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.

190. One of the primary reasons for that is that, although the attacks have been taking place for 35 or 36 years, the greatest number of those attacks — as stated in the chronology provided — began in the early 1990s. That is a period of 17 or 18 years, which equates to almost four insurance cycles. In my opinion, confidence will not be instilled into insurers for at least 20 years, given that that is the way that they work.

191. My experience of dealing with insurers has been that even small attacks on halls where, for example, windows are broken, graffiti is daubed or attempted arson is carried out, make insurers extremely nervous. That does not even include the major attacks where halls are burned down or completely destroyed. Insurers view that batch or identifiable group of halls as susceptible to those types of attack, so they get nervous and simply will not move on the premiums.

192. In certain areas, they will simply not insure halls. That will not change in five, 10 or 15 years. I come back to the point: the legislation is either needed or it is not. If it is needed, it should exist, and if the attacks stop, it will not be used. The insurance market’s confidence will not return in five, 10 or 15 years. My opinion is based on having worked with insurance companies on such attacks for almost 20 years.

193. Mr McCartney: Thank you for your presentation. Could the Committee get a sample of the insurance increases? Mr Farr gave an example of an increase from £400 to £2,500. Can an indication of the size and the extent of the increases be provided? As a result of the increases in insurance prices, how many of your halls are left uninsured?

194. The Chairperson: You may be able to answer that, but, rather than giving an answer straight away, can you provide three or four examples? Next week’s Committee meeting will be attended by representatives from the insurance industry, so perhaps they can also provide information on that.

195. Mr Kennedy: I understand the logic of the question about the number of halls that do not currently carry insurance. However, that matter may be too delicate to be published in the Hansard report and made widely available.

196. The Chairperson: The spirit of the question is for the Committee to have a couple of worked examples. I suspect that sensitivities around the nature of the issue will mean that the information will need to be presented to show how much hall x in, for instance, County Armagh paid 10 years ago. Individual places do not need to be identified, but examples would be helpful to get a flavour of the impact of the availability of insurance.

197. Mr McCartney: I asked the question because the type of insurance that is taken can cut down the range of activities for which a hall can be used.

198. Mr Kennedy: I accept that, but some people may study the Hansard report of the meeting and identify a hall to attack that is not covered by insurance.

199. The Chairperson: We want some worked examples of three or four cases, given that there are some 600 halls in Northern Ireland. The information can be supplied in such a way that it does not identify any particular area.

200. Mr A Maginness: I thank the witnesses for their full presentation and for the written documentation. I say on behalf of the SDLP that we regret attacks on any halls, particularly those belonging to the Orange Institution or, indeed, the Black Preceptory. Do you take out block or individual insurance?

201. Mr Singleton: We take out individual insurance.

202. Mr A Maginness: Does that mean that there is no collective insurance for the Order?

203. Mr Singleton: No, but a broker may handle a large number of halls. Sometimes a body that has several halls may set up a collective insurance scheme. In my experience, such a scheme usually works when halls are owned centrally. Orange Halls tend to be owned by local communities, and each hall looks after its own insurance. There is no collective scheme or block policy; all policies are peculiar to individual properties or halls.

204. Mr A Maginness: The insurance that you take is to cover against damage, but do you need public liability insurance in addition?

205. Mr Singleton: Mr Chairman, that is correct; most polices are written for property insurance and public liability insurance. I cannot provide details or estimates of the number of halls that do not have building insurance. Public liability is not the issue; we are more concerned with building insurance, because some halls that have public liability insurance cannot get buildings insurance — no matter how hard their representatives try. There is still a reluctance to use those halls, but we are satisfied that public liability cover is written where the market is, and rates reflect the market.

206. Mr A Maginness: What is the normal excess amount for building insurance?

207. Mr Singleton: It varies.

208. Mr A Maginness: Can you give me an estimate?

209. Mr Singleton: It is between £500 and £1000, but it will vary slightly according to whether the hall has been attacked in the past. However, the excess of normal policies falls within that range, but some might be slightly more.

210. Mr A Maginness: The excess would cover minor damage.

211. Mr Singleton: That is correct.

212. Mr A Maginness: One would not make a claim in relation to minor damage.

213. Proposed new article 4A(4) states:

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

214. 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.”

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

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

217. 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.”

218. Mr A Maginness: That was my tentative interpretation.

219. The Chairperson: I am not sure who will be sending a bill to whom.

220. 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?

221. 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.

222. 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.

223. 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.

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

225. 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.

226. 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?

227. 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.

228. 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.

229. Over a period of between 17 to 20 years, there has been a history of attacks to our properties. In total, 205 properties — a third of all the properties that we are involved with — have been subject to a range of major and minor attacks, which has led the insurers to identify that as a problem. The insurers consider it to be a dangerous area of the market and have agreed to insure us, but for a premium that is four times the price that we should normally be paying. Sunset clauses, of any nature, will not put confidence back into the market.

230. The community groups that use our halls should not be penalised because the legislation has failed. The Government has failed to protect those properties. The interests of the communities that use them has been prejudiced and, in some cases, their use of the halls has ceased. It is widely accepted now that, in any given month, most Orange Halls are used only very occasionally by Orange Lodges or Black Lodges. The vast bulk of hall usage is by organisations or groups for community activities, many of which are not connected to the Orange Institution.

231. Whole communities, particularly in rural areas, are being prejudiced by the failure of Government legislation. I have attended several of the meetings with the Secretary of State, which have been referred to, including the most recent in which the Secretary of State indicated that the Government will now amend the legislation. It is disappointing, after approximately six years of consistent lobbying, to have the sunset clause thrown in like a hand grenade to spoil the legislation — for whatever reasons. The legislation will not now achieve its end.

232. Mr A Maginness: Are you aware of what standard of proof is needed, or what criteria must be met, to have a Chief Constable’s certificate issued?

233. Mr Singleton: No; I do not know — I believe that it is at the discretion of the police.

234. Mr A Maginness: It would be interesting to find out how the decision is made.

235. The Chairperson: It would be extremely useful if we could probe the mind of the Chief Constable on the issue.

236. Mr A Maginness: Yes; because he must act on some basis.

237. The Chairperson: Concerns may exist about whether the certificates have always been issued on a consistent basis.

238. Mr A Maginness: Perhaps it is on the basis of reasonable suspicion.

239. The Chairperson: I am aware that Mr Simpson wants to ask a question. Mr McNarry, do you have question on this matter?

240. Mr McNarry: Not on the matter of the Chief Constable’s certificate, but if I could be indulged on the insurance issue. Is it fair to say that the Orange Institutions have striven, and continue to strive, to negotiate fair premiums with insurance companies, rather than just accepting their lot?

241. Dr Hume: Yes; consistent efforts to do that have been made.

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

243. Mr Simpson: I have waited this long, so I do not mind.

244. 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.

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

246. 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.

247. 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.

248. 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?

249. 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.

250. Mr Simpson: What about the downturn in recent attacks?

251. 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.

252. 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.

253. 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.

254. 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.

255. I return to the issue of fall-off in attacks. As I said previously, it is all about confidence. Our list shows that the last attack was in February 2008. On a stretch of country from Keady — which is south of Armagh city — to Killylea, six or seven halls were subjected to graffiti attacks recently. Although those are low-grade attacks, they reinforce the impression in the insurer’s mind that Orange Halls are special targets that are susceptible to attacks. When something seems peculiar, and its mere presence means that it is liable to attack, that makes insurers nervous. The insurance market is based on confidence. In order to reinstall that confidence, the clause must be set in stone.

256. The Chairperson: When representatives of the insurers come before the Committee next week, it may be useful to seek their views on deterring factors.

257. Mr Hamilton: Mr Singleton, will you elaborate on your discussions with insurance brokers across Northern Ireland? We all appreciate the difficulties that the sunset clause poses for the insurance industry. Have your discussions satisfied you that the legislation, minus that clause, would be sufficient to correct the problems that halls and lodges are having in getting insurance?

258. The Chairperson: We must adjourn because there is a Division in the House.

259. Committee suspended for a Division in the House

260. On resuming —

261. The Chairperson: I apologise for the interruption. It was an example of democracy in action.

262. Mr Hamilton indicated that he was 99% of the way through his question when he was interrupted. Perhaps starting the question again would be the best way to proceed.

263. 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?

264. 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.

265. No one can reasonably expect insurance premiums to be reduced within a year of this legislation being enacted. That is why the sunset clause presents such a problem. Insurance works on a five-year cycle, and it will be several years before premiums are reduced. There will no reduction within a year or two. Insurers want to see certainty in the sector, which brings me back to the problem of the sunset clause. On one hand, the legislation may be enacted; however, there is complete uncertainty about how long it will remain on the statute book.

266. The Chairperson: Mr Kennedy wanted to pick up on a point —

267. Mr McNarry: On a related issue, I know that NIO officials are attending this meeting. In their discussions, did the issue of reducing premiums gain any momentum, specifically in relation to the sunset clause? Will the NIO tell the Committee whether that clause is included to satisfy insurers?

268. The Chairperson: I do not know whether the NIO representatives are in a position to answer that.

269. Mr David Kyle (Northern Ireland Office): I do not know about the insurance side. All that I can add is that the sunset clause was inserted because the legislation is seen as an exceptional measure. The expectation is that attacks on Orange Halls will diminish over the next three years of normalisation in Northern Ireland, and that eventually the legislation will no longer be required.

270. Mr McNarry: I appreciate that. The Committee was told that last week. Who benefits from the sunset clause? Will insurers change their approach? The new evidence suggests to me that insurers might have held discussions with the NIO.

271. The Chairperson: That may be a question that the Committee will put to insurers next week.

272. Mr Kennedy: I have more of a comment than a question. I know of a case in which a Chief Constable’s certificate requested by a local district police commander was subsequently refused at senior level. With that experience in mind, and given that police were never keen to let light into the magic of how such certificates were approved, it is better to have that issue dealt with by the new legislation.

273. The Chairperson: I thank the witnesses for their evidence.

274. 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.

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

276. The Chairperson: Thank you.

7 October 2008

Members present for all or part of the proceedings:
Mr Peter Weir (Chairperson)
Mr Alban Maginness (Deputy Chairperson)
Mr Allan bresland
Mr Danny Kennedy
Mr Jimmy Spratt
Mr Declan O’Loan
Mr Alex Maskey

Witnesses:

277. The Chairperson (Mr Weir): Stephen James is from the insurance broker Oval James and a board member of the faculty of insurance brokers, and Stephen Boyles is a business manager with the commercial division of Zurich Commercial and the Northern Ireland chairman of the Association of British Insurers.

278. I welcome you both to the Committee. By way of background, this is the third evidence session. Officials from the Northern Ireland Office attended the first session, and the Committee heard from representatives of the Loyal Orders last week. Members, therefore, know a reasonable amount about the background to, and purpose of, the draft legislation. After your short oral presentation, I will open the Floor to members’ questions. Gentlemen, please give the Committee your views on the draft Order and its implications for future insurance premiums for the affected halls.

279. Mr Stephen James (Oval James Insurance Brokers): I hope that members have seen a copy of ‘The Story So Far – September 2008’, which is a document that I update approximately every two years. It describes the background to the severe difficulties that specifically affected Orange Halls in the 1990s and that were possibly connected to the political situation at the time. Until 1991, every practising insurance broker in Northern Ireland probably insured Orange Halls, Hibernian halls, Masonic halls or whatever, and no one specialised. However, in September 2001, a major problem in New York had an unexpected effect on the insuring of Orange Halls or community halls.

280. At that time, several insurance companies — including Prudential and Guardian Royal Exchange, which was subsequently taken over by AXA Insurance — decided to withdraw from the general insurance market. Furthermore, the Edinburgh-based company Tribune Risk and Insurance Services, which provided protection for Masonic halls in Scotland, introduced a policy for Masonic halls and Orange Halls at premiums at half of the previous year’s price. However, given that insurance premiums for commercial risks, home insurance and car insurance were rocketing — and indeed, in many cases, doubling or trebling — that seemed to conflict with the rest of the market. Many small halls did not have sufficient income to pay high premiums to the normal insurance market. As a result, a large number switched to Tribune, which was, within one year, discovered to be a man of straw. The individual who fronted the company is spending seven years in Edinburgh Prison.

281. However, that broke long-standing relationships between halls and insurance companies. Suddenly, premiums increased, and the insurance market considered that Orange Halls — because of malicious fire-damage attacks — were not a commercially viable risk. Companies were losing money on such policies, and they had to deal with most of the claims. Unfortunately, there was a lack of evidence of involvement of three or more people, which prevented clearance of claims in the Northern Ireland Office. Moreover, Chief Constable’s certificates were not being issued. Therefore, from the insurers’ point of view — which Stephen Boyles can, perhaps, confirm — if a hall broke a relationship, the company would not reinsure in the future. The Grant Scott debacle left approximately 200 to 250 halls without insurance cover. Furthermore, the Prudential and the Guardian Royal Exchange ceased to do business. Halls that had not done anything wrong and that wanted to renew their polices were not offered renewal by the insurers. Therefore, all insurers took the decision not to reconnect.

282. In January 2003, we — as an insurance broker — were tasked with bringing the halls together. That had not happened before, and, at one stage, it became something of a nightmare. However, we collected as much information as possible from various sources. We approached the insurance market, but companies were reluctant to assist halls that had severed relationships in the past or with whom they had never had a relationship. However, after due representation to all local insurers, the Eagle Star — part of the Zurich group — the Royal and Sun Alliance and the Norwich Union agreed to combine to provide cover that would enable halls to remain open. Some people think that the rates were penal, but they agreed to do it.

283. We reached an agreement, under which we could not provide cover for a hall that had suffered a malicious attack in the previous 10 years. During the discussions, it seemed that if a hall had suffered a malicious attack in the past 30 years, we would be unable to secure cover. However, we continued to work, and the three company managers combined to produce a facility that provided some cover. However, premiums were relatively expensive. At that stage, the minimum premium was £1,050 plus insurance premium tax, even for the smallest of halls.

284. Several halls immediately wished to join the facility. We had a common renewal date of 1 May, as we wanted to have some means by which we could consider all community halls together. A lot of Orange Halls, a couple of Hibernian halls and a couple of halls belonging to the Masonic Order were insured by the facility. For the first couple of years, there was no change to the rates because it was too early. Insurance rates are determined by broader and longer-term factors.

285. In 2006, we got the rates reduced by around 10%. At that stage, 200 halls were part of the facility. In 2007, we had the rates reduced on the property insurance again by 10%. We had hoped that, if the conditions had continued as they had in the previous few years, the rates would further reduce in 2008.

286. Unfortunately, in 2007, the position totally reversed after a large number of well-publicised attacks against halls took place. I am sure that the gentlemen who are here to represent the NIO will be able to give details of the number of attacks. In February 2008, we hit a difficulty when it came to considering the renewal of the policy. The insurers, quite rightly, wanted to examine the rating with a view to increasing the rates, as opposed to reducing them. However, they agreed to maintain the rates that we had had for 2007-08 after a difficult renewal discussion.

287. We currently insure approximately 300 community halls with a common renewal date. The cover is not totally basic, but it covers fire and perils — fire, aircraft, explosion, tempest, storm, flood, burst water pipes and impact — and public liability. Generally, that is the cover that a community hall requires. There are no extra special policy wordings. We are attempting to deal with the situation of uninsured halls having to close. We have managed to open quite a few halls, but at least another 100 halls have no insurance cover. Perhaps that presents a difficulty to the trustees of those halls, but, in many cases, they cannot afford to insure.

288. Our minimum terms on a hall had been £1,100. That was reduced to £1,000, and it is currently about £900, with tax bringing the figure up to approximately £945. If a similar hall were situated in Wales, the north of England or Scotland, one would expect that the insurance premium would be considerably less than what is being charged. That is because of the claims experience of the Northern Ireland insurance market over the past 20 years.

289. Some types of insurance — for example, public liability — attract higher rates in Northern Ireland than they do across the water. Court awards are higher in Northern Ireland, so one would expect that a public liability premium that cost £150 in Scotland would cost £250 in Northern Ireland. The possibility of a malicious fire attack has governed the difficulties in obtaining property insurance over the past 10 years.

290. I am sure that I have omitted some bits and pieces.

291. The Chairperson: I am sure that members will pick up on any outstanding issues.

292. Mr James: That is why I also gave a written presentation.

293. Mr Stephen Boyles (Association of British Insurers): No; that is a comprehensive view of the situation. Mr James referred to what had happened with regard to rating reductions for a couple of renewals. Part of that related to the stability that had been brought into the facility which had been put in place. That facility took account of risks that were perceived as being better risks — those that had not been subjected to previous attacks. There was a comfort in that. Underwriters look for the comfort that the risks that they have are as they want them to be. Anything that we can do to remove any element of discrepancy or doubt provides that comfort.

294. There are other issues such as malicious fires, and one of the halls flooded recently. There is always an element of the unforeseen about any insurance arrangements. However, the issue of the uncertainty about the malicious aspect has driven our problems.

295. Mr James: If there were 300 halls, there would be different claims experiences with those halls, whether there was a change in legislation or not. Electrical fires, tripping claims, and a slate falling off a roof on to a car parked nearby can all be described as normal insurance risks. The problem with community halls, and particularly Orange Halls over the past 12 to 15 months, is the possibility that three halls within a mile and a half of each other could be attacked during one night, which would not be a normal insurance risk. We are trying to bring community halls back under normal insurance risks so that they can be rated properly by the insurance company.

296. The Chairperson: Thank you. I will take questions from round the table.

297. Mr O’Loan: Thank you for your paper and presentation. Is it the case that the sector leaving the Northern Ireland insurance industry after what happened in the market in 2001 had a major effect on outcomes because of the break in relationships? One could now look at that as a short-sighted approach taken by the sector in what seemed to be for their best interests but what turned out to be a short-term interest — if at all. Had that break with the insurance industry here not happened, would the difficulties of getting insurance, and the level of insurance premiums, have been so extensive?

298. Mr James: That is a difficult question to answer. During 2001, and coming into 2002, the insurance market took a dramatic swing. Premiums were rising dramatically. Several halls would not have been able to afford the insurance premiums on the go at the time. The best opportunity that a hall had was if it were in a continuing relationship with an insurer, where there may have been a 15% to 20% increase. Insurance companies generally tend to treat long-term customers much better.

299. The situation did not apply only to Orange Halls. Guardian Royal Exchange and Prudential were ceasing to do any commercial business whatsoever in Northern Ireland, and closing down their departments. The situation was not targeted at the halls that they insured at the time; the insurance companies took a wider shotgun approach to close businesses. However, the timing was dreadful. The Grant Scott situation then came into play and it was completely illogical against what was happening in the insurance market. As the result of a short-term attitude, several halls decided that they could not afford insurance premiums unless they went down that route.

300. As a practising insurance broker, we were aware for about a year that that was on the go. However, nobody went running to find out whether they could handle the facility in Northern Ireland. Something was wrong, but how could people be told? The Financial Services Agency investigates a matter only when a business closes, and we see the guy going to gaol. That is when the situation really comes through.

301. He created a situation in which, all of a sudden, 250 halls were seeking to reconnect to the insurance market. However, the insurance market did not want to reconnect with them, because — as Stephen can confirm from the point of view of the Association of British Insurers (ABI) — they were losing money. Insurance companies are commercial animals, which are intent on insuring and trying to make money, but none of them was making money on Orange Halls. Therefore it was done as a facility; they felt a duty to those who had remained with them, but it was end of story for those who had left.

302. Mr O’Loan: What is your view on the reasonableness or appropriateness of the three-or-more person rule regarding criminal damage compensation? It appears to be a significant barrier against what one might see as a reasonable duty of the public purse to protect people against the effects of criminal compensation.

303. Are policies written in such a way that the insurance industry picks up the liability for criminal damage compensation if the public purse does not?

304. Mr James: I will take those questions in reverse. All our policies for halls ensure that the property is covered for malicious fire. If there is a fire attack on one of our 300 halls, the insurance company will cover it — until such times as we investigate it to see whether it was a malicious fire that will fall within the terms of the legislation. The insurance company is notified as soon as possible after an attack. I am not sure how many attacks have taken place; you will know better than me. In the event of such attacks, it is a claim against the insurance industry. Subsequently, it is up to the insurance industry to ensure that the claim is put through the solicitor to the NIO, and the NIO — following the police investigation — has to decide whether to issue a certificate.

305. That is what caused the panic in 2007. A lot of claims were being made, and the PSNI had to be given time to investigate and come back to the insurance companies. One of the important elements in discussions that took place over the past two or three years was the effort to get the police to decide whether they were going to issue a certificate. In a meeting, Paul Goggins said that the police and the NIO had agreed that we would have a decision within three months of an attack, because an attack is an insurance claim until it passes on to the NIO. Even if there are 50 claims outstanding in which it has not been decided whether to issue a certificate, the claimant is guilty until proven innocent.

306. It is important that we receive a swift response from the police. If the NIO does not pick up the liability for criminal compensation, the insurance industry does, and we will have to deal with those claims. The problem arises when that has to be reflected in the rating of the product.

307. Mr O’Loan: You have put emphasis on Orange Halls. What is your experience of insuring many other community buildings, which have experienced malicious attacks?

308. Mr James: I represent Oval James insurance brokers — who, until 1 April, was Bartholomew & James Ltd, which was in business for 51 years. We insure 1,000 churches in Northern Ireland, and that encompasses the church, church hall, manse, etc. Over the past five to seven years, the amount of damage that has been caused by malicious attacks has decreased. During the 1990s, there were more attacks against community-based property, but that is from a church perspective.

309. Over the last five years, our problem has been water damage, as opposed to malicious attacks. It may be that people have been more proactive recently: instead of making claims, they are trying to avoid having to claim. They seem to be much more security conscious; there are many more alarms installed now. Over the last five to seven years, the experience of our church business and the group as a whole, the overall trend has been downwards.

310. Mr A Maskey: I will summarise the position, and try to simplify it. In the early 2000s, the insurance sector took a hammering and the price of cover began to rise. Many of the halls were fell when they were suckered by this fly-by-night company. Meanwhile, they had to get reinsured; and the previous company, which had transmogrified into something else, was not keen to reinsure. The combination of that, together with rising costs made things difficult.

311. You are now in a situation where a number of halls find it difficult to finance the cost of cover. You and others have stepped in to act as brokers, and you have had success in getting a number of halls insured once more. There is the potential that that will produce economies of scale and, and you look to a group insurance solution.

312. There is a separate problem, in that halls cannot get the necessary insurance because certificates, which would have been issued almost automatically, are not now issued. If I understand you correctly, enactment of the proposed legislation would create a level playing field for the halls that need insurance.

313. Mr James: I do not know that new companies will compete purely to get the business on offer from Orange Halls or community halls, or that those companies which have withdrawn from the market will return. However, those which have provided the cover will be more relaxed if the legislation is passed, so long as, when a claim is made quickly, the NIO deals with it and the claim does not sit on a claims experience form. They would be more prepared to increase their exposure in the halls sector, and might allow numbers to increase from 300, to 400 or 500. Also, as Alex says, we have economies of scale. That would work. We expect that, if the proposed legislation is enacted, insurance rates would begin to reduce.

314. Stephen Boyles represents the Association of British Insurers. We spoke about this just now. It may be that we are emerging from a period of soft insurance market, where there is a lot of competition and in Northern Ireland, things have been kept in check as a result —

[Inaudible due to mobile phone interference.]

315. However, in view of the “credit crunch” — a famous phrase — and the increase in the cost of capital, the reinsurance and insurance markets will be affected. Rates may increase next year across the board. However, if the legislation were changed to take out of the scenario claims for politically motivated attacks from either side of the community on community halls, then insurance rates for them will reduce. At a time when the cost of other insurances is rising, I that expect those will fall.

316. Mr Boyles: The proposed legislation will open opportunities for halls that have not previously been insured because they may have been subject to attack. The comfort that that is being compensated elsewhere will level the playing field for everyone.

317. Mr James: Some risks have not been insurable, other than for public liability: one cannot get property insurance cover for them. However, this will allow them to come back into the ordinary insurance market and they will then be insurable.

318. Mr Kennedy: Gentlemen, thank you very much indeed for your presentation, and I apologise for my late arrival. I have looked at your written presentation; it is very good, and I thank you for providing it in such a comprehensive way — no pun intended.

319. Has there been the same percentage increase in premiums for church halls as there has been for community halls/Orange Halls?

320. Mr James: No, there has not been. Over the years, the rates for churches have held — in fact, they probably have reduced over the last couple of years. The rates are affected by the general market and what is happening there. Certainly, if we compare a church hall in Northern Ireland with a community hall next door, we would probably find that the community hall is paying twice the premium that the church hall is paying.

321. Mr Kennedy: I want to find out about the insurance market and its cycles. Last week, we heard evidence from representatives of the Grand Orange Lodge of Ireland, and their view was that insurance cycles largely last for periods of up to five years. The draft order contains a sunset clause that will either be renewed or will cease to have effect after three years???. Would three years be a sufficient period for the insurance market to have comfort in the situation?

322. Mr James: I will go back to what I said in the written submission. When the major problem arose in 2001-02, as far as the insurance market was concerned, it was looking back over a period of 12 to 15 years because that is when the attacks on Orange Halls and the difficulties began. When we first started to insure community halls — when the three major insurers came together — we could not, at that stage, insure any hall that had suffered a malicious attack for 10 years. As I said, at one stage, it seemed that any hall that had suffered a malicious attack in the past 30 years would not have qualified for insurance cover. We were trying to launch an initiative at a very difficult time, when everything was going against us. However, we kept plugging away, and we eventually got there.

323. In my experience, a normal insurance policy will have a five-year claims experience attached to it. However, with community halls/Orange Halls, a much longer period of a hall’s history has to be considered. The difficulties really began in the late 1980s and early 1990s, some be 15 or more years ago. We want to find a way to give insurance companies confidence that a risk that is not really an insurance risk — it is perhaps more politically sensitive — is really not a matter for insurance companies when it comes to considering whether to insure a community hall. We want to try to introduce a measure that removes that risk from the insurance market and allows Government to deal with the matter. The effect of the discussions that have been held on the proposed legislation has been that, in the past eight to nine months, the number of attacks has gone down. Across the board politically, everyone has said that the situation is stupid and ridiculous. The legislation would give confidence to insurers, but it would also make people realise that there is no point in attacking community halls because the cost of repairs will be borne by the public purse — that is what will happen with malicious fire attacks.

324. That is why I was surprised when I read the sunset clause. The three-year limit is ridiculous. It is more to do with the overall situation in Northern Ireland. We hope that things will continue to improve, and that the law will come into effect somewhere down the line. I am against having any sunset clause in the legislation, but that will not be for me to decide.

325. Mr Spratt: Some of the points that I wanted to raise have already been answered. However, let us go back to the question of Chief Constable’s certificates and the “three or more persons” scenario. It seems that it was easier to obtain a certificate prior to 1994, but became more difficult after that. Do you have any views on the reasons for that? You talked about an insurance logjam. Given that there have been several attacks in the past few months, has that logjam been cleared, or is the Police Service still dealing with those issues?

326. Mr James: I will go back to two different aspects. Until the late 1980s and early 1990s, there had not been a large number of attacks on halls at any particular time. A hall may have been attacked here and there, but there were not a great many attacks. The political situation changed in the 1990s. Quite a few halls were attacked, but there are sensitive reasons why those attacks took place. It got the stage that, by 1994, 24 or 25 Chief Constable’s certificates were sitting in a pile, and no decisions had been taken on them, even though the attacks had occurred one or two years previously. The loss adjusters who acted on behalf of the Association of British Insurers (ABI) said that those incidents should clearly have been covered by a certificate. When the ABI met the Government of the time, the insurers made it clear that renewals would not be granted to Orange Halls — because the attacks had been concentrated on those halls — until the situation was dealt with. Within two months all the certificates were cleared.

327. Mr Spratt: So the logjam was totally cleared?

328. Mr James: That was in 1994. We became involved with the NIO in providing information on attacks, and have had a fair bit of contact with them over the past six or seven years. There were not many attacks between 2002 and 2006, so it was easy to keep on top of the situation. 2007 was different, because quite a number of attacks took place within a short period of time. The difference was that we were able to push those members of the Government, the criminal justice service and the NIO, whom we were in contact with, for an answer.

329. For the first time, I attended two or three meetings with Peter Hain and Paul Goggins, and was able to emphasise that it was important to get a response. If they were going to issue a certificate, then they should issue it, but for goodness’ sake, they should tell us if they were not going to do so. Otherwise, it is one against us. We pushed things that way, and we were given confirmation by the Government and the NIO that they would make a decision on a certificate within three months of an event occurring. As far as I am aware, that commitment is being kept. I cannot put my hand on it, but a lot of decisions were made fairly quickly in 2007.

330. Mr Bresland: My question is similar to Jimmy Spratt’s. Did Strabane Orange Hall get a certificate?

331. Mr James: Not that I am aware of — up to the present. A lot of halls were attacked in north Armagh. Two or three halls were attacked in one night, but we might have insured only one hall. Some of those halls may have been uninsured or insured elsewhere; we did not cover many of them. Those halls were able to be connected together in some shape or form, and I think that those halls — as a bulk — received a certificate. As far as I am aware, Strabane Orange Hall has not got a certificate and is not getting a certificate. We did not insure that hall, and that is why I cannot say categorically. However, I understand that it is not getting a certificate.

332. There were several other attacks. We were not insuring the properties in Castlederg, although a hall in Castlederg, which was a total loss, did get a certificate.

333. Mr Bresland: They got a certificate?

334. Mr James: Yes. Again, a couple more halls were attacked in the Castlederg area, and I understand that they got certificates. However, Strabane Orange Hall was the biggest hall attacked in 2007 and, as far as I am aware, it did not get a certificate. It was a total loss.

335. Mr A Maginness: Why should you not carry the risk? You are an insurer, and the whole purpose of insurance is to cover risk. When one looks at the figures provided by the Orange Order it can be seen that the pattern and incidences of attacks vary right across Northern Ireland. You benefit and profit from the premiums in good times and suddenly, when a situation happens, you say that you will not cover that risk.

336. Mr Boyles: The political situation in Northern Ireland had driven the issue over the past 40 years, and that is where it was seen to be different. Property insurance policies in Northern Ireland exclude any terrorist-related activity, which is picked up by Government indemnity. Similarly, terrorism is excluded in GB, but one can purchase insurance from the Government through an insurance company called Pool Re. However, Northern Ireland is slightly different because of what drove the situation. In simple terms, property insurance is not a compulsory class of business. There is an obligation on insurance companies to provide employers’ liability cover, but they have no obligation to provide property insurance. Therefore, there is no compulsion on anyone to take on an unattractive risk.

337. Mr James: The malicious fire risk is covered by the insurance market, but it must rate for that. There have been many attacks on community halls over the past 40 years. However, in the first 20 years there were not as many attacks as there have been recently. That is not because different materials are being used for building halls, or that electrical heaters have caused fires, or this, that, or the other: it is because those attacks have been motivated, not by something that the insurance market can take care of, but by attacks coming from a different source as a result of the political situation in Northern Ireland having moved on.

338. I cannot believe that just talking about the legislation has already had a dramatic effect. The number of attacks has reduced considerably. People are wakening up and asking why community halls are being attacked, if there is something there to back it up. It is not an insurance company, but the Government is there with us.

339. Mr A Maginness: You referred to the sunset clause. I am not so sure that it is a sunset clause in the strict sense because it is subject to renewal if circumstances show that there is a pattern of those attacks repeating. The Secretary of State can renew the order.

340. Does that not give you any comfort?

341. Mr Boyles: Insurance underwriters always look for a trend, and three years is not long enough for one to be established. The situation this year and for the next three years may be calm, but that is not long enough to give anyone in the underwriting world any confidence. One issue with having a sunset clause of three years is that it could result in another Grant Scott/Tribune situation in which an insurer decides to come in to take the business for the three years for which it is ring-fenced. Should the legislation not be subsequently renewed, that insurer may decide that the comfort of underwriting that business had gone and let the traditional insurers who previously had the business take it back.

342. Mr A Maginness: I understand your point, but it is not an absolute sunset clause. A guillotine will not come down after three years. Surely that means that insures would have a six-year period, which is reasonably conterminous with the five-year period that you mentioned.

343. Mr Boyles: It still does not remove the uncertainty of what happens after that.

344. Mr A Maginness: The situation presented to the Committee seemed to be one of an upsurge of attacks that resulted in an upsurge in premiums and subsequent difficulties for Orange Halls in renewing their cover. However, that does not seem to be the case. Correct me if I am incorrectly interpreting your submission. My impression is that premiums increased substantially across the board after 9/11, after which the Grant Scott episode lasted for a couple of years. At that point, the relationship between the insurance companies and the Orange Order went slightly awry.

345. After that, the insurance industry attempted to provide some cover for quite a number of halls, and that happened. However, over that period rates remained fairly stable and there even seemed to be a reduction at some stage. In May 2007, in contrast to the previous two years there was no reduction, but the rates remained stable. Is that a fair summary?

346. Mr James: When we talked about September 2001, the problem had been what happened in the preceding 10 years. Prior to then, the insurance companies had decided to continue to offer the renewal due to their long-standing connection with the halls. However, before 9/11, the position was that if a hall left an insurance company, that company would not reinsure it. That happened before the Grant Scott debacle and the insurers’ withdrawal from the market.

347. There was, therefore, a difficulty before 9/11 that a hall had to remain with a particular insurer. After the Grant Scott affair and 9/11, the entire situation changed. It is correct to say that the premiums had stabilised, but they were stabilised at perhaps double the level that one would expect for community halls.

348. Mr A Maginness: The premiums were higher compared with those for other halls.

349. Mr James: Yes. We stabilised the premiums, but at a high level, whereas the remainder of community-type halls, with the same level of cover, paid significantly lower premiums.

350. Mr A Maginness: Did the Grant Scott scheme provide group insurance?

351. Mr James: I do not know much about it, but premiums were debited to individual halls. He said that he was insuring those halls, but it was just a scam.

352. Mr Spratt: You did not get any commission then?

353. Mr Boyles: Word of mouth had got out.

354. The Chairperson: There could be a separate debate on whether the sunset clause has been appropriately named — one thing that we can say with a reasonable degree of certainty about sunset is that the sun will rise again the following morning. [Laughter.] Everyone here will accept that, unless there is anyone who is particularly apocalyptic. I was going to say that we could save that debate for another day, but, judging by the Assembly agenda, it will probably take place next week.

355. I assume that Northern Ireland is treated as a unit when premiums are calculated, in the same way as it is for car insurance. Would a spate of attacks on community halls in Fermanagh affect premiums across Northern Ireland, including those in areas that have no history of attacks?

356. Mr James: Yes, it would. In home insurance, postcodes are used to determine whether there is a higher risk of theft for homes on, for example, the Malone Road than those on the Antrim Road. Different rates then apply as a result of that decision. Premiums for community halls are calculated in the same way throughout Northern Ireland. However, individual claims are examined — if there have been two or three public-liability claims from one hall, the premium will reflect that. Northern Ireland, whether it is Fermanagh or Ballycastle, is treated as one unit when premiums are calculated.

357. The Chairperson: I will not ask Committee members to declare an interest by stating their postcodes. Gentlemen, thank you for your evidence.

358. Mr James: Six or seven years ago, we lacked confidence. Although confidence is everywhere in the media now, we are trying to bring confidence to the insurance market. By passing the legislation, we are taking attacks on community halls, which may be of a political nature, out of the insurance market. We are trying to give insurance companies confidence about the position on a long-term basis. Taking away such a big problem, and not including the sunset clause, gives confidence to the insurance market, the insurance companies and the ABI. The omission of a sunset clause will maximise the confidence of the whole community.

359. The Chairperson: Thank you for your evidence, which will be very useful in the Committee’s deliberations. The Committee will draw up a report on the legislation, which will be debated in the Assembly on 4 November. From the time that the report is debated in the Assembly, it will be publicly available. The Assembly will send you a report. If either of you want to attend the Assembly debate on 4 November, you are more than welcome.

360. Mr James: As long as you do not say, “bring yer man down for questioning”.

361. The Chairperson: Do not worry; there will not be any questioning.

362. Mr Kennedy: Sure, you are well insured.

363. The Chairperson: If you cannot make it to the debate, and are more technically minded than I am, it is streamed on the internet. Thank you for your evidence, which will be very useful.

364. Mr James: If the Committee requires anything else, give either of us a shout.

Appendix 4

List of Witnesses who gave Oral Evidence to the Committee

Government Officials

Brian Grzymek Deputy Director Criminal Justice Services, NIO
David Hamill Criminal Justice Services, NIO
David Kyle Criminal Justice Services, NIO
James McKay Legal Advisors Branch, NIO
Ray Jones Head of Operations, Compensation Agency
Henry Spence Land and Property Services, DFP

Representatives of the Loyal Orders

William Abernethy Treasurer, Royal Black Institution
Millar Farr Sovereign Grand Master, Royal Black Institution
David Hume Director of Services of the Grand Orange Lodge of Ireland
Louis Singleton LLB Co Armagh Institution

Representatives of the Insurance Industry

Stephen Boyles Business Manager, Zurich Commercial; NI Chairman of the Association of British Insurers
Stephen James Oval James Insurance Brokers; Board Member, Faculty of Insurance Brokers

Appendix 5

Written Submissions to the Committee

Monday 6 October 2008
Loyal Orange Institution and Royal Black Institution

Additional Evidence in relation to Insurance cost for Orange and related Community Halls in Northern Ireland

The Ad Hoc Committee on Criminal Damage (Compensation) (Amendment) (NI) Order 2008 requested that examples demonstrating high insurance costs be submitted in furtherance of the submission given on Tuesday 30 September 2008.

It has proved difficult to obtain the information requested as each individual hall is insured by its own trustees directly with the insurance company involved.

A typical example is a hall in County Armagh which has seen its premium rise from £1,230.00 in 2005 to £1,707.99 in 2007. This represents a 38% increase in the space of 2 years on the premium in 2005 which was some three times that of an equivalent premium for a similar property insured under the Highland Council Village Halls Scheme in Scotland.

Another smaller hall in County Armagh saw its premium rise from £794.00 in 2004 to £955.68 in 2007, a rise of some 20%.

It is important to remember that the real issue is not a rise in premiums over the last 2-3 years but the fact that premiums have risen dramatically from the late 1990s by a factor of some 2-3 times compared to that which is represented by a similar market in the rest of the United Kingdom.

We estimate that there are between 15 and 20 Orange Halls that cannot get insurance in Northern Ireland.

If you require further information please do not hesitate to contact my office in Schomberg House.

Yours truly,

Drew Nelson LL.B
Grand Secretary
Grand Orange Lodge of Ireland

Committee Briefing Paper 01/08

To: Members of the Ad Hoc Committee on the Draft Criminal Damage (Compensation) (Amendment) (NI) Order 2008

From: Kevin Shiels

Date: 29 September 2008

Update on Community Halls – Articles 41(2) and 41a of the 1977 Order

At its meeting on 23 September 2008, Members asked the Department of Finance and Personnel to provide the Committee with information on community halls which have sought and gained rates exemption, since 2006, under either Article 41(2); or Article 41A of the Rates (NI) Order 1977.

The following information has been received from the Department:

Halls on the Valuation List: 1797

Halls receiving full exemption: 1385 (77%)

Article 41(2) (a) to (e)

• Public Bodies 203 Halls

Housing Executive 63
Housing Associations 23
District Councils 107
Others 10

• Religious Bodies 79 Halls
• Charities 478 Halls

Community Groups 252
Youth Groups 149
Others 179

• Sport & Recreation 53 Halls

Sport 16
Recreation 37

Note: It is not possible from DFP’s electronic records to ascertain the specific section of Art 41 under which exemption has been granted. There are 5 sections (a), (b), (c), (d) and (e) and this information is only contained in a written report in the file for each property throughout their 7 office network. To obtain this information would require a manual search of each of 817 files.

Article 41A

• Ancient Order of Hibernians 11
• Apprentice Boys 3
• Masonic 67
• Grand Orange Lodge of Ireland 429
• Independent Loyal Orange Institution 4
• Knights of St Columbanus 0
• Royal Antediluvian Order of Buffaloes 0
• Royal Black Institution 2

Note: There are a total of 54 halls which have not been categorised. They can only be identified by DFP for example as Ratepayer (number 51).

All halls listed under Article 41A have obtained exemption since April 2006.

Kevin Shiels
Committee Clerk

NIO Submission to the 
Ad Hoc Committee 
13 October 2008: Equality Issues

Criminal Damage (Compensation)(Amendment)(Northern Ireland) Order 2008 – Further advice from NIO to Ad Hoc Committee on Section 75

Background

1. The draft Order provides for a new criterion to be added to the Criminal Damage (Northern Ireland) Order 1977 specific to community halls. The aim of the proposal is to create a targeted approach to compensation for all community halls that are criminally damaged, but do not otherwise meet the criteria of the current scheme.

2. In seeking to address this policy objective Ministers found that there is no specific definition in legislation of a ‘community hall’. Following discussion with DFP colleagues, Ministers determined that the best way of achieving the policy objective is to draw on existing elements of Rates legislation, which link back to the Recreational Charities Act (Northern Ireland) 1958 and have similar policy objectives – to sustain important elements of community infrastructure in Northern Ireland

3. Under Article 41(2)(e) of the Rates (Northern Ireland) Order 1977, “any hereditament which is used wholly or mainly for purposes which are declared to be charitable by the Recreational Charities Act (Northern Ireland) 1958”, are exempt, to varying extents, from rates. In addition, under Article 41 A of that Order, hereditaments which are occupied by a specified list of bodies, or are occupied by a body affiliated to the specified list of bodies, and which the Commissioner or district valuer are satisfied is to a substantial extent used or made available for use for purposes which are declared to be charitable by the Recreational Charities Act (Northern Ireland) 1958 to be charitable, or are otherwise charitable (and subject to other conditions), are also exempt from rates.

4. The Government considers that these two elements of Rates legislation provide a firm platform for the proposed amendment and community halls will have to meet the requirements of the Rates legislation to be covered by the proposed criteria. The new criterion will be a further route to eligibility for statutory criminal damage compensation, in addition to the existing Chief Constable’s Certificate, or three or more persons criteria.

Section 75 Equality Screening

5. An Equality Screening exercise on this proposal was carried out. This determined that there may be a higher uptake by some groups defined by their religion, political beliefs or gender. The Screening indicated that the Protestant community, Unionist community and men may make more claims, reflecting the proportionately greater number of community halls owned by the Protestant/Unionist community and the fact that some of these properties have, in the past, been specifically targeted for attacks occasioning criminal damage.

6. However, by using the Rates legislation relating to properties linking to the Recreational Charities Act (Northern Ireland) 1958 to underpin the proposed legislative change, we are seeking to focus on the disadvantage which will arise to users of community halls and not just those who own them. It is important to note that the aim of using both Article 41 (2) (e) and 41A of the Rating legislation is to ensure that all community halls used for wider community purposes are covered by the amendment.

7. Our intention is that the legislation will apply to all community halls, as exempted from Rates by Articles 41(2)(e) or 41A, used (or available for use in the case of Article 41A) for a broad range of charitable purposes. It will, of course, have a direct effect only on those community halls claiming compensation for criminal damage, where they are covered by the relevant rates legislation. The additional criterion applies equally to all claimants who will fall within the definition of community halls regardless of their membership of Section 75 groups. The Government’s policy intention is to provide equal access to all Section 75 groups and it believes that this is best achieved by linking the new criteria to Articles 41A and 41(2)(e) of the Rates Order.

8. The proposal will apply to all community halls which meet the definition in the legislation and has the potential to be of benefit to various sections of local communities who may choose to use these halls. Wider use of these community halls by many groups is commonplace and hence these provisions should benefit all.

Conclusion

9. The aim of the amendment is to address the issue of criminal damage to “community halls” where the wider local community loses a facility, not just the owners. Anyone whose property is the subject of criminal attack is still eligible to apply for compensation made under the existing provisions, i.e. three or more people were involved or through the issue of a Chief Constable’s Certificate, both of which criteria are unaffected by this amendment.

10. The Government believes that its policy objective and intent in taking forward this legislative amendment, to support facilities which provide important social welfare functions to their communities, is very similar to objectives and intent of DFP rates legislation which gives exemption from rates to such properties under Articles 41(2)(e) and 41A. In the case of the NIO this is effected by ensuring that, the loss of such community facilities through criminal damage is minimised by adding an additional criterion to the criminal damage compensation scheme.

11. The proposal is expected to impact positively on all local communities by helping to reinstate community halls whenever they are criminally damaged. The mix of community halls covered by the legislation is expected potentially to provide access to community facilities to the full range of Section 75 groups.

12. The Government published the draft proposals on 25 June, along with a summary of the equality screening exercise for public consultation and has invited consultees to comment on the outcomes of the screening exercise. To date no adverse comments have been received regarding Section 75 aspects.

13. The NIO considers that there will be no adverse differential impact and that a full EQIA is consequently not necessary. However it is currently consulting widely on the draft legislation and the equality screening exercise and will carefully consider all representations made on these issues.