MoJ commits to further amendments to whiplash legislation

In Wednesday’s blog I noted that the Government had successfully resisted* attempts to reduce materially the scope of its whiplash reform programme. Looking more closely at the record of the report stage debate on 12 June, it is clear that the Ministry of Justice (MoJ) is planning to make further amendments of its own  as the Bill progresses.

First, as mentioned earlier, is its commitment to provide for mandatory consultation with the Lord Chief Justice before it makes or amends regulations containing the tariff of general damages for whiplash claims.

Second – and perhaps of greater practical relevance for motor insurers – is that a means of monitoring the extent to which insurers pass on savings associated with the reforms will be introduced into the Bill by the Government when it passes to the Commons later in the year. This – as in the case of defining whiplash injury on the face of the Bill – is another instance of the Ministry moving to accommodate criticisms levelled at aspects of its proposals. MoJ Minister Lord Keen put the point in the following terms:

the Government will accept the views of Peers and develop an amendment, to be tabled in the House of Commons, that meets these requirements and provides an effective means for reporting on the public commitment made by the insurance sector, showing that it results in savings being passed on to consumers and thereby holds insurers to account. This is quite a complex and delicate process and it is ongoing at present.”

He did touch briefly on the complexities arising from this course of action, and very sensibly (in our view) emphasised that:

(i) “any amendment in this regard is drafted with care so that it is effective but does not also impose requirements that push beyond the recognised remit of regulators such as the Financial Conduct Authority”, and that
(ii) “we must ensure that any legislative requirement in this area does not infringe on the very important area of competition law.”

The text of this amendment, when it emerges, is certain to be the subject of close scrutiny across the sector.

[* As a matter of clarification, the Government’s majority in defeating the small claims amendment was not 47 as reported yesterday but the rather closer figure of 14, with 47 in fact being the numbering of the relevant amendment on the business papers.]

Kinley_A-4_web Posted by Alistair Kinley, BLM’s Director of Policy & Regulatory Affarirs

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