The Civil Liability Bill had its Second Reading yesterday in the House of Commons. It managed to pass through without too much difficulty, which wasn’t entirely unexpected. The contentious issue of vulnerable road users was covered off early on in the session, with Justice Secretary David Gauke confirming that these will be exempted from both the scope of the Bill and the increase in the small claims track limit.
However, what about the rest of the debate? What aspects caused the most concern amongst MPs? And what amendments can we expect to be tabled for discussion at Committee Stage? We have set out some of our key observations below:
Many Labour MPs are still refusing to acknowledge that the UK has a compensation culture. Despite the consistent quoting of reduced road traffic accidents, marked increases in claims frequency, and aggressive cold calling tactics utilised by CMCs with incitements to claim, it appears that there are many who do not believe that whiplash claims are an issue. Gareth Thomas (Lab) highlighted what he thought was the hypocrisy of the Government by referring to its own report written by Lord Young in 2010, which stated that the UK’s supposed compensation culture is a perception, not a reality.
There was widespread disagreement from a number of MPs on this issue, with many citing recent automated cold calls as an example of a compensation system that is broken. Chris Philp (Con) described his own experience of being bombarded by nuisance phone calls and being pressured to make a claim: “I have my own anecdotal experience of being personally incited to commit fraud, which obviously I did not do, but the figures are compelling.”
Despite David Gauke’s assertion that “the factor that is most likely to ensure that benefits are passed on to consumers is competition, and the evidence suggests that there is competition in this area”, there remains cynicism from the Opposition bench that these reforms will benefit consumers.
This clearly riled the right wing capitalists in the chamber. Kwasi Kwarteng (Con) even went as far as to say “I know that many Opposition Members do not even believe in private enterprise or business”, and referred to the Shadow Chancellor as an “out and out Marxist”.
Rory Stewart, in his response for the Government, acknowledged the concerns raised and confirmed that an amendment would be brought to compel insurance companies to pass savings on to the consumer.
David Gauke made sure to clarify in his introduction that “the Bill will not change the important role played by periodical payment orders”. This was welcomed by Bob Neill (Con), Huw Merriman (Con) and Chris Philp (Con). Indeed, Chris Philp and Huw Merriman went so far as to suggest that PPOs should be the rule not the exception.
In Justice Minister Rory Stewart’s closing, when pushed on this particular point by Chris Philp, he said: “I am very happy to take that issue offline with my hon. Friend. There is a lot to be said for PPOs”.
Rory Stewart, when closing the debate for the Government, spoke of the importance of a personal injury system that was proportionate, sustainable, straightforward, and predictable. He also acknowledged the Government’s responsibility to “balance the administration of justice and honesty with the broader social costs” through the delivery of a “more simple, predictable, effective and rapid administration of justice”.
The Bill now moves to Committee Stage. It was confirmed last night that this would be brought to a conclusion by Tuesday 9 October.
As ever, the Keoghs Market Affairs Team will follow the Civil Liability Bill closely and will be sure to advise on its progress as this legislation passes through the House of Commons and makes its way towards Royal Assent.
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