The Financial Guidance and Claims Bill is well-advanced in the Lords – it gets a third reading today – and is due to get to the Commons early next year. It will move the regulation of the claims management sector from the Ministry of Justice to the Financial Conduct Authority; a measure likely to take effect well into 2018 or perhaps even later. It is also worth noting that the Government has committed to amending the Bill – when it gets to the Commons – in order to ban cold-calling for claims leads. While the overall approach is both necessary and sensible, getting there has taken far too long given that this regulatory tightening was first suggested in the March 2016 review of the claims management sector but won’t bite until at least three years after that. [Contrast that with the far quicker approach to tackling abuses in holiday sickness cases, where we expect fixed costs controls to kick in from April 2018.]
The Automated and Electric Vehicles Bill is also currently before Parliament and is very much an enabling piece of legislation aimed at the medium and longer terms. It will extend the scope of compulsory motor insurance to cover harm caused by vehicles driving themselves. We have been closely involved with the proposed insurance regime from the outset and generally welcome the approach.
The Civil Liability Bill, in contrast, seems to be going nowhere at the moment. It was aired in the Queen’s Speech in June and is intended to reform damages awards and legal procedures associated with whiplash claims. These topics had been addressed by the Prison & Courts Bill which lapsed because of the election. The idea of these reforms is already over two years old – stemming from the 2015 Autumn Statement – but despite that the new Bill has still not been introduced and we are over five months on from the Queen’s Speech.
Staying with the Civil Liability Bill, some have thought it might be the vehicle by which setting the personal injury discount rate will be reformed. Although its widely-drafted purpose would appear to allow for that – “to ensure there is a fair, transparent and proportionate system of compensation in place for damages” – there is equally the possibility of a short standalone Bill dealing only with the discount rate. The Government’s plans should be much clearer in the next few weeks given (i) that the Justice Select Committee will complete its pre-legislative scrutiny in this area at the end of November and (ii) that the Ministry of Justice is clearly committed to moving as promptly as it can here.
So plenty to look out for here and the potential for some significant changes ahead. The big ticket item is obviously the discount rate and there looks to be a fair chance that its timetable will be clearer before the year end.
About the Author
Alistair 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).