Several amendments to the Civil Liability Bill were proposed as the House of Commons revisited the legislation on Tuesday.
As expected, the Civil Liability Bill and the increase in the small claims limit will not apply to vulnerable road users, such as cyclists, while road users such as children will be exempt from the the small claims limit for road traffic accident claims.
Justice Secretary David Gauke also introduced a mechanism for monitoring insurers and whether they pass savings onto consumers via reduced premiums. This will take the form of making certain information available to the Financial Conduct Authority.
The online portal for litigants in person is on track to launch in April 2020, Gauke confirmed.
Mark Hemsted, partner at law firm Clyde & Co, commented: “This bill is all about reducing the cost of motor insurance for the British public. While the headline debate has been about access to justice, the real tussle is how much of the legislation can pass through the House intact and how much will be watered down.”
“As far as the insurance industry is concerned, [the]concession on ‘vulnerable’ road users is a small price to pay for moving this legislation forward.”
Hemsted went on to outline two key issues still remaining as the Civil Liability Bill heads to the committee stage, which could happen as soon as next week.
He said: “There remain two key issues: first, how whiplash will be defined by the legislation and second, the value of claim on which claimant solicitors can recover their costs.”
“The ultimate definition of whiplash will have a major impact on this legislation’s ability to stamp out fraud. If it’s not broad enough—for example, it only includes neck injury—anyone with a bruise or scrape elsewhere will use this to avoid the proposed tariff-based systems of awards.”
“The sum at which the small claims limit is set is also crucial. Currently it’s £1,000, so claimant solicitors can recover their costs from the losing party on relatively small claims. If the sum is raised to £5,000, claimant solicitors have a much bigger hurdle to leap before they can recover costs. That could deter claims—or it could lead to a sudden increase in the number of higher value claims as it clearly creates an incentive to go large, so to speak.”
“One point insurers generally agree on is that the delay to the Bill’s implementation till 2020 will allow the court service to set up a claims portal and to provide protection for unrepresented claimants, thus weakening the access to justice claims.”
Jenette Newman, partner at Clyde & Co, added: “The proposed reforms are overwhelmingly backed by insurers with a welcome commitment to pass the savings on to policyholders. The reforms will create a fairer system and will utilise modern processes in claims for whiplash.”
Commenting on the cost benefit amendments being put forward as part of the Civil Liability Bill, head of motor and liability at the Association of British Insurers, Rob Cummings, said: “Insurers have already publicly committed to passing on to customers cost benefits arising from the government’s reforms to personal injury compensation and the discount rate, and the proposed amendment to the Civil Liability Bill sets out a mechanism for insurers to demonstrate this. If the bill proceeds in its current form, it will fix a broken system in the best interests of both insurance customers and taxpayers, and insurance companies are ready to provide the necessary evidence of their contribution to this.”