Civil Liability Bill – “a technical argument between the insurance lobbyists and the legal services lobbyists”

This title was one MP’s description of the Bill’s provisions (the whiplash reforms, in the main) during yesterday’s long and highly polarised debates on report and third reading of the Bill. The Bill was passed without further amendment (save for a minor linguistic tweak by the Government) by a healthy Government majority of 56. It now passes to the Lords for approval of earlier Commons amendments after which it should receive Royal Assent, which could happen in the coming weeks and before the end of the year.

The relatively strong Government majority in favour of the Bill yesterday comes from its certification as an ‘English Votes for English Laws’ measure, with the procedural consequence being that Scottish and Northern Irish MPs may not vote at this stage.

Although the Opposition pressed its latest amendments – which sought to restrict the small claims limit increase to just £500, to omit the proposed general damages tariff and to exclude children’s claims – to votes, it did not succeed on any of them. I had thought that the Government might possibly back down on the last of these, but Justice Minister Rory Stewart MP had clearly reviewed the issue carefully before the latest debate and came down on the side of keeping them within the scope of the reforms. He backed up that view with this extract from Lord Justice Patten’s speech in Dockerill v Tullet:

“I can see no reason in principle why a small damages claim made by an infant should be taken out of the small claims track merely because of the age of the claimant. It is also clear that the premise on which CPR 45.7 operates is that the normal track for damages by infants will be the small claims track.”

A significant part of the proceedings yesterday covered now well-trodden ground, such as assertions that: the Government was doing the insurance industry’s bidding, the part 1 reforms were an attack on access to justice, the proposed general damages tariff improperly cut across the judicial function and that insurers were failing to defend speculative claims robustly enough.

In contrast, comparatively little time was spent discussing the new mechanism, in part 2 of the Bill, for setting the personal injury discount rate. In an interesting aside on this, however, it was reported that the use in 2017 of the current rate-setting powers in the Damages Act 1996 meant that “the Lord Chancellor before the previous one ended up at a minus 0.75% rate, which would not have been the preferred Treasury rate.”

Other parts of the debate focused more constructively, perhaps even with a degree of cross-party consensus, on concerns such as the ongoing risks of cold-calling, of claims management company behaviours and of the emergence of paid and unregulated McKenzie friends in the post-reform era. For example, Justice Committee Chair Bob Neill MP warned of the risk of the “unintended consequence [of] a displacement effect from well-regulated personal injuries lawyers to unregulated, unscrupulous claims managers”.

Based on the written record at least, the Minister (Rory Stewart MP) appeared to have retained his sangfroid throughout the debate. He replied to Bob Neill that the Government was waiting for the judiciary to report on options regarding paid McKenzie friends. He talked positively on several occasions of the new online portal for litigants in person and of the need for it to be robustly tested before April 2020.

He also referred to an earlier Government amendment by which insurers will be required to account for savings arising from the reforms in both parts of the Bill. He called this “an unprecedented move” and “perhaps the most dramatic improvement” made during the Bill’s passage through Parliament. He said that the provision “will rigorously to hold the insurance industry to account and ensure that the savings are passed on to customers.”

His carefully framed closing remarks – quoted in full below – appear intended to draw a line under what has been a partisan and sometimes passionate debate on the whiplash and small claims reforms in particular. If so, then he may have succeed in doing so only for little more than a week given that Labour MP Andy Slaughter confirmed he has secured a three-hour debate on 1 November which will cover the review of the Legal Aid Sentencing & Punishment of Offenders Act 2012, access to justice and related issues.

Civil Liability Bill: extract from Justice Minister Rory Stewart MP’s closing remarks on 23 October 2018

“I want to take this opportunity to pay tribute to the personal injury lawyers. One of the problems in this debate has been the suggestion that it is a black-and-white, sometimes Manichean dispute, with the press and civil society sometimes unfairly implying that the personal injury lawyers are somehow to blame. We must put on the record very clearly our respect for the personal injury lawyers and the work they do.

In addition, we must send a very strong message of respect towards people who are genuine victims of whiplash injuries, or indeed of any other form of personal injury. They are entitled to a fair level of compensation and to an adequate level of representation. We believe very strongly that the measures in the Bill strike a proportionate and reasonable balance between fair compensation, reasonable representation and the costs imposed on the rest of society.”

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Authored by Alistair Kinley, Director of Policy & Government Affairs

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