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Samantha Ramen

Samantha Ramen

Director of Market & Public Affairs

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Civil Liability Bill: Ping Pong Stage Complete

Client Alerts21/11/2018

The Civil Liability Bill completed its long journey through the Houses of Parliament yesterday (20 November) as members of the House of Lords agreed to the six amendments presented to it which had been laid down in the House of Commons.

Is the Civil Liability Bill now officially a law? And how long before the key changes within it come into effect?

The Keoghs Market Affairs Team have set out the key points below:

What happened?

  • Lord Keen of Elie, as he has throughout the process, introduced the proposed changes to peers, and sought to pre-emptively push back against the potential argument that insurers wouldn’t be inclined to pass the savings from the passage of the Bill onto consumers.
  • Lord Sharkey from the Liberal Democrats praised the mechanism by which insurers must report their passing of savings onto consumers, but was critical of its complexity.
  • Shadow Justice Minister Lord Beecham congratulated the Minister on improving the Bill during its passage through Parliament but was critical of suggestions that it could be six years before HM Treasury reports to Parliament on the savings passed on to policyholders.

What next?

  • The Bill will now enter the queue to receive Royal Assent, at which point it will become law. This is likely to happen just before the Christmas recess on Thursday 20 December, when Parliamentary loose ends are traditionally tied up.

Discount rate timings assuming Royal Assent on 20 December

  • Under the requirements of the Bill, the first review of the Discount Rate will be commenced within 90 days of Royal Assent i.e. by Wednesday 20 March 2019.
  • The Lord Chancellor must consult with the Government Actuary on the first review of the rate (with subsequent reviews going to an expert panel) within 20 days of this commencement, or by Tuesday 9 April 2019.
  • The Government Actuary will then have 80 days after this request to respond, so will be required to do so by Friday 28 June 2019.
  • From start to finish, the first review of the Discount Rate must be completed within 140 days of its commencement, or by Wednesday 7 August 2019.
  • However, all of these dates may be brought forward by the Government as it seeks to remedy this ongoing cost to the public purse as quickly as possible.


Keoghs Viewpoint 

  • It’s been almost three years since the then-coalition Government announced its plans to reform whiplash claims, and almost two years since the Discount Rate was lowered to minus 0.75%.
  • Changes have been made along the way, but without any last-minute roadblocks, it looks likely that a new Discount Rate will be in place by the summer of 2019.
  • This final stage of the Bill’s passage through Parliament seemed to be the first time that Parliamentarians from both parties (almost) agreed that the legislation would make positive change.
  • Lord Keen was rightly praised as a key figure in the development of the Bill, in particular, the ways in which it differs from the draft legislation that first came into the Houses of Parliament in March.

What next?

Whilst Royal Assent is a key milestone and one which triggers the commencement of the discount rate review, it is important to remember that for whiplash reform we are really only at “half time”.

Post Royal Assent, work continues on the litigant in person portal and claims process and the real devil in the detail will emerge as new rules are formulated for inclusion in the Civil Procedural Rules.

These will then be incorporated in Secondary Legislation, most likely in the form of a Statutory Instrument and rolled out in advance of April 2020 which remains the Government’s preferred “go live” date for the reform package.

History teaches us that to avoid unintended consequences and to deliver the process and savings anticipated by Government, this is a crucial stage where doubtless at least some further attempt will be made to deflect or water down the efficacy of the reforms.

The Keoghs Market Affairs team will be tracking progress closely and will keep you informed as these key next steps evolve.