Detailed Provisions
Part 4: Financial redress: redress payments
Chapter 1: Determination of applications for redress payments.
Deduction of previous payments
Section 42: Deduction of previous payments from redress payment
117.Sections 42 and 43 apply where the panel has determined that an applicant is eligible for a redress payment and, before the determination is made, the applicant or the person in respect of whom the application has been made received or became entitled to a “relevant payment”. This applies whether the payment was made (or the right to it arose) before the date of the application being made or after it.
118.Subsection (2) defines what is meant by a “relevant payment”. A relevant payment is a payment which relates to any abuse of the person to whom the application relates which is covered by the redress scheme. The payment may have taken the form of damages or an out of court settlement. Other payments are also covered. For example, a payment under the advance payment scheme is covered in order to avoid double-counting. As such, those who received a payment under the advance payment scheme can apply for an enhanced sum, but the previous payment is deducted from any offer. Subsection (3) states that legal fees and costs incurred in obtaining the relevant payment are not included in this. A redress payment is also not included given that any double-counting in relation to a person who applies for a fixed rate payment, and then later applies for an individually assessed payment, or a person who submits a further application by virtue of section 30(3) after having already received a redress payment, is addressed instead by section 39(3).
119.Subsection (4) sets out that, subject to section 43 (which deals with a number of less common cases), relevant payments or, where there has been more than one, the total of those relevant payments, or the adjusted figures (as the case may be) are to be deducted from a redress payment. Subsection (5) outlines the steps involved in making the required adjustment to a relevant payment. This is to be done in relation to a payment which was received before the date section 42 comes into force. The Gross Domestic Product deflator ratio (“the GDP deflator”) will be used to establish the present day value of the payment previously paid to the person. This is done by applying the GDP deflator to the relevant payment by reference to the period beginning on the date it was made and ending with the date section 42 comes into force. However, in accordance with section 43(6), a payment under the advance payment scheme is not to be adjusted for inflation.
120.Subsection (6) states that the Scottish Ministers may, by regulations subject to the affirmative procedure, modify the meaning of “relevant payment” and make any modifications to definitions in subsection (7) which may be required.
121.Although this section also applies to a review panel, this only covers the situation where a review panel is the first panel to make a finding of eligibility. In a case where the original panel found the applicant to be eligible but a review was sought in relation to the amount of the offer, section 57(2)(c) prevents the review panel from increasing the deductions to which the offer is to be subject.
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