Two current Bills affecting property and casualty insurance

The Riot Compensation Bill and the Negligence and Damages Bill were listed for second reading debates in the Commons on Friday 4 December. The former touches on property insurance matters, largely, and the latter on motor and casualty covers because it targets expansion of certain elements of personal injury law.

One Bill was taken forward but the other not. This post sets out the issues raised and considers some possible impacts.

The Riot Compensation Bill will proceed. The back-story is that the text of the Bill is ‎all but identical to the Home Office’s draft Bill on this matter that was published before the 2015 General Election. In effect, it has strong Government support despite it being a Private Member’s Bill in name.

The measures in the Bill will exclude non-material consequential losses (for example, business interruption and other economic loss) from the scope of riot compensation and set a £1 million cap per claim. ‎Probably the key point for property insurers is to what extent these changes may affect rating and pricing of cover because of the cap on post-riot recovery of losses from police forces?

In contrast, the Negligence and Damages Bill is not going forward. It is also a Private Member’s Bill but it has no Government support and was nowhere near high enough on the agenda (the Commons Order Paper) even to secure a debate about its substance. As a matter of formal procedure, it has now been added to the agenda for debate ‎on 22 January. But given that some fifteen other Bills are already listed for that day this one is, effectively, dead in the water. Thus this tweet from APIL last Friday “Negligence & Damages Bill ran out of time today. New second reading date: Friday 22 January‎” is technically accurate but certainly creates, in my view, a misguided expectation that the Bill is going to get on in the New Year.

So why bother with it now ‎if it stands no chance? The first reason is that one of the changes it proposes – moving calculation of the dependency multiplier, in fatal accident claims, from date of death to the date of assessment – will be argued before the Supreme Court anyway on 28 January, less than a week after the Bill’s re-listed second reading. The case is Knauer v Ministry of Justice. The second reason is that other measures in the Bill – on reforming statutory bereavement damages and relaxing the law on secondary psychiatric injury – are high on APIL’s reform agenda and are likely to hang around even when the Bill falls away. For example, implementation of the results of the recent consultation on bereavement awards in Northern Ireland could well provide another hook for further pressure and campaigning.

The issues in both Bills are therefore most definitely worth further analysis and close monitoring over the medium term.


About the Author

akAlistair Kinley is BLM’s Director of Policy & Government Affairs.

Alistair is responsible for BLM’s engagement with government departments and regulators on policy and public affairs issues and consultations affecting the firm and its customers. He coordinated BLM’s market-facing activities in connection with the Insurance Act 2015 and the consultations which preceded its publication and introduction in Parliament.

He is a member of the Civil Justice Council (CJC), a regular speaker and experienced commentator on legal and procedural reforms and was a contributing editor to the Law Society’s Litigation Funding Handbook (September 2014).

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