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Samantha Ramen

Samantha Ramen

Director of Market & Public Affairs

T:07713 393534

Civil Liability Bill – the pace quickens

Client Alerts06/09/2018

Immediately following on from the Bill’s Second Reading in the Commons, further activity has occurred in the form of draft regulations and a series of both Government and Opposition amendments in advance of Committee Stage.

The ban on pre-medical offers to settle

To ensure that the ban on pre-medical offers in whiplash claims can be enforced, regulations are being prepared to take effect once the Civil Liability Bill has reached Royal Assent.These regulations are proposed to modify the Financial Services and Markets Act 2000 by enabling the Financial Conduct Authority (FCA) to monitor and enforce the ban. The ban will apply to “whiplash claims authorised persons” as set out in the requirements of the Civil Liability Bill and the accompanying Regulations.

The Government will continue to develop these draft regulations working alongside the FCA to ensure a robust mechanism to enforce the proposed ban. We stress that the current text is not final and is subject to amendment. The draft will be published in full during the passage of the Bill in the Commons and will be finalised and confirmed ahead of Royal Assent.

The working draft of the regulations can be found here.

Regulations to require insurers to provide information relating to the impacts of the Civil Liability Bill

At Report Stage in the House of Lords, the Government committed to bring forward an amendment in the Commons to provide an effective means on substantiating the public commitment made by Insurers to pass on savings to consumers generated by the Bill. That commitment was stated again by the Lord Chancellor at Second Reading. A note has now been published setting out the expected approach for those proposed regulations. The Government acknowledge that a balance must be struck as between holding insurers to rigorous account but also not intervening in an already competitive market and placing new and disproportionate burdens.

The proposal will place a statutory requirement on insurers to provide prescribed information to the FCA. This data will then be aggregated and passed to the Treasury who then assisted by the FCA, will report on whether the Industry has kept its promise to pass on savings. The first reporting period is likely to commence from 1st April 2020 and cover a three year period to April 2023. It is proposed that Insurers will have until April 2024 to file their return.

In terms of proposed scope, Insurers and Lloyds Managing Agents will be required to provide data relating to third party personal injury policies provided to persons domiciled in England & Wales. Currently, commercial lines of insurance are excluded and there will be a de minimus threshold of 0.05% market share or circa 10,000 relevant policies sold per annum.
The draft specific information required incorporated in the covering note can be found here.

Again we stress that this in draft form and subject to change.

Proposed amendments to the Civil Liability Bill


In advance of Committee Stage, Labour MPs have not been slow off the blocks to table amendments to the Bill. As anticipated these amendments focus on two key areas. Firstly the abolition of the proposed general damages tariff and maintaining the status quo of Judicial College Guidelines and Judicial valuation. Secondly, a cap on any increase in the Small Claims Track to £1500 and citing CPI based inflation since 1999 as their justification. As both these amendments would seriously undermine the Bill’s attempts to reduce both frequency and cost, we doubt either will gain any traction with the Government. We expect further amendments to be forthcoming over the next days and weeks.

Bill Committee

The Civil Liability Bill Committee has been announced:

Chairs:

  • Conservative MP Sir Henry Bellingham
  • Labour MP Graham Stringer

Members:

  • Conservative MP Jack Brereton
  • Labour MP Bambos Charalambous
  • Conservative MP Robert Courts
  • Conservative MP Chris Davies
  • Labour MP Gloria De Piero
  • Labour MP Ruth George
  • Conservative MP Chris Green
  • Labour MP David Hanson
  • Conservative MP Peter Heaton-Jones
  • Conservative MP Scott Mann
  • Conservative MP Amanda Milling
  • Labour MP Fiona Onasanya
  • Labour MP Ellie Reeves
  • Labour MP Lloyd Russell-Moyle
  • Labour MP Jo Stevens
  • Prisons and Probation Minister Rory Stewart
  • Conservative MP Craig Tracey

Timetable

The timings of the Civil Liability Bill have been revised. We have amended our timetable here
As ever, the Keoghs market affairs team will closely track developments and keep you informed as the legislation and accompanying regulations evolve over the coming months.