Civil Justice Reform: Impact of a General Election

What does a 4 July General Election mean for the ongoing implementation of PI reform as set out in The Civil Liability Act 2018?

General

What happens when Parliament is dissolved on 30 May?

• When Parliament is dissolved, every seat in the House of Commons becomes vacant. All business in the House comes to an end and MPs stop representing their constituencies. There will be no MPs until after the general election.

What is purdah?

• The pre-election period (purdah) is the term used to describe the period between the time an election is announced and the date the election is held. There are restrictions on what the Government can and can’t do; these restrictions often officially come into force once parliament has been dissolved.
• During purdah, Ministers are supposed to “observe discretion” in initiating new policy or action of “a continuing or long-term character”. Such decisions are supposed to be delayed until after the election, unless they are unavoidable, or delaying them will be detrimental to the national interest or waste public money. Announcements and government communications are also restricted.

What happens to the post of Lord Chancellor?

• The post of Lord Chancellor remains during the purdah period. Indeed all Ministers remain in office and in charge of their departments but, as above, it is customary for them to observe discretion in announcing initiatives that are new or of a long-term character in their capacity as a Minister.

Whiplash

When are we likely to see the publication of the whiplash tariff report?

• The Lord Chancellor published a written statement on Wednesday 22 May confirming that he had completed his review of the whiplash tariff pursuant to the Civil Liability Act 2018. This also confirmed that his report would be published after the Whitsun recess (i.e. 3 June onwards).
• Now that a General Election has been called, next week’s recess has been postponed. Parliament will be prorogued today and will be formally dissolved next Thursday 30 May.
• Section 4 of the CLA 2018 mandates that a copy of the whiplash tariff report be published and laid before Parliament albeit that it doesn’t strictly say when by. There will be no Parliament after dissolution takes place on 30 May.
• However, our reading is that this does not preclude the ability of the Lord Chancellor to publish the report under section 4(4). However, as above, it is convention for Ministers not to make significant policy announcements during the pre-election period where possible. Whether publishing the report is “unavoidable” or not during purdah remains to be seen.

What does this mean for any potential increase to the Small Claims Track Limit of £5,000?

• A review of the SCT limit was never explicitly part of the current whiplash tariff review but it has been indicated to us that the wider context of any change to the whiplash tariff would be considered as part of the review.
• A more detailed review however, would likely require a Minister to request that officials consider any potential change to the SCT as a separate piece of work. It is not possible for Ministers to commence such work which might bring about a significant policy change during a pre-election period. This means that any detailed consideration of the SCT limit will have to wait until after the election.

What happens to the ongoing work regarding the passing on of the benefit to consumers?

• This will be unaffected. The next step in the process prescribed by the CLA is that the Treasury must lay before Parliament a report outlining whether or not policyholders have benefited from any reductions in costs for insurers. There is still ample time for this as it is due before 1 April 2025.

PIDR

Can the Lord Chancellor still commence the official review of the PIDR?

• Yes. The process is set out in the CLA 2018; the calling of a General Election will not interfere with this statutory timetable.

Can the LC announce the new rate during the purdah period?

• This is extremely unlikely given the convention mentioned above i.e. that Ministers are expected to “observe discretion” and that policy announcements should not be made barring exceptional circumstances.

Given timings (GE on 4 July, longstop date to commence review on 15 July), can we expect the review to commence before or after the GE?

• There is nothing to stop the current Lord Chancellor commencing the (up to 180 day) review of the PIDR at any time as the statutory timescales are not “trumped” by purdah. But what if this is not done by 4 July?
• If we see a different political party seize power, we’ll see a new cabinet appointed quickly, likely by the Monday after the election. This is how quickly David Cameron appointed his new cabinet after the 2015 election, which is the last time there was strictly speaking a ‘change’ of Government (from coalition to Tory majority).
• The swearing in as Lord Chancellor would then likely take place w/c 8 July. This means there would a window (albeit a very short one) for the new LC to commence the PIDR review by 15 July.

The million dollar question: How will yesterday’s announcement affect the PIDR decision?

• It is, of course, impossible to know. However, we should all bear in mind the following:
• Part II of The CLA 2018 affords the Lord Chancellor a measure of discretion when making a PIDR determination. This means that the PIDR decision in E&W is, by its nature, very difficult to predict.
• The individual that is LC at the time of the decision is central. His/her risk profile and approach to our compensation system more generally will undoubtedly have an impact on the final number. This individual’s perspective is also important – will he/she simply rubber stamp the recommendations, or will they want make their own decision? The duty is to consult, not to follow. Notwithstanding this, the reality is that only a very brave Lord Chancellor is likely to veer too far from the Expert Panel’s recommendations save that there is generally a significant element of discretion applied when it comes to the "prudence" element.
• Given all of the above, everything points to this decision being made by the “new” Lord Chancellor as appointed by a newly formed Government post the 4 July General Election.

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