Home / Insight / Whiplash reforms in the current political climate: is the target date wishful thinking?

Whiplash reforms in the current political climate: is the target date wishful thinking?

16/09/2019

Whiplash reforms in the current political climate: is the target date wishful thinking?

It can be easy to forget, but there are numerous domestic policy issues that need addressing while Brexit saps energy from Parliament. For those of us in the insurance industry, the long-promised whiplash reforms are a key example of this, and there are understandable worries about whether or not the April 2020 implementation date is realistic, or even possible.

There has been a change of Prime Minister, there has been a change of Brexit approach, and there may even be a change of government in the near future following a potential General Election. Add to this ministerial changes within the Ministry of Justice, and it might be quicker to start considering what has stayed the same rather than what has changed.  

So what do all these changes mean to those of us following the development of whiplash reforms? Below we answer some of the key questions.

First things first: what’s going on and what happens next?

The restrained way to put it is that everything is still up in the air. Between prorogation, a looming no-deal Brexit and the General Election supposedly favoured by all sides but not yet materialising, the immediate landscape of politics is as uncertain as many can remember. For those of us awaiting the implementation of the whiplash reforms, clarity and certainty is required, but doesn’t appear to be getting any closer.

What needs to happen in Parliament to get the whiplash reforms through?

The reforms require secondary legislation (most likely through a Statutory Instrument) to be passed by the Houses of Parliament. Secondary legislation is essentially passing the detail of reforms that have already been agreed through primary legislation, and as such it goes through a lot less Parliamentary scrutiny than primary legislation. The Statutory Instrument for the whiplash reforms will be subject to the affirmative resolution procedure – you can find more detail on what this means here: https://keoghs.co.uk/keoghs-insight/client-alerts/the-civil-liability-bill-as-clear-as-mud?page=1.

As it currently stands, the Government will be able to lay down the necessary Statutory Instruments once Parliament returns from recess on 14 October.

What does this mean for the implementation date of the whiplash reforms?

Although the day-to-day is so variable, the big picture of whiplash reform remains roughly the same. The Government has stated that it envisages bringing forward the changes by April 2020, and the large number of regulatory changes that make up the Civil Liability Act all seem to be coalescing around that implementation date.  Thus provided the Statutory Instruments are laid down in mid-October, the industry will have six months to prepare.

Does the timetable change if a General Election is announced?

It depends when a General Election is called. The current expectation is that a General Election will be called shortly after Parliament returns from its prorogation / recess on 14 October.

Parliamentary time should be dominated by the Queen’s Speech and debate on it when MPs first return, but despite this there should be ample time for a Statutory Instrument to be placed in front of the House, approved, and be confirmed before MPs leave again to prepare for an election.

Will the changes be the end of it or will there be further changes in the future?

Following the level of uproar when the previous Lord Chancellor altered the Discount Rate to -0.75%, the government agreed through the Civil Liability Act to regularly review that particular piece of regulation, and it is likely that the other key provisions of the act will be reviewed on a regular basis as well, to make sure that they’re still at a level that is consistent with what the UK needs.

Does the new Justice Minister affect things at all?

Chris Philp MP was announced as the new Justice Minister earlier this week following Edward Argar’s promotion to Health Minister. This is good news for the industry - Mr Philp is well known to Keoghs and has been a prominent advocate of reforming whiplash rules for some time. He claims to have been personally encouraged to commit fraud by cold calls from firms and has busied himself with reforming the system for much of his Parliamentary career.

His appointment may have come too late for him to have any major impact on the exact parameters of the reforms, which have all been in development for years. There are also more senior Ministers who influence these areas, including Lord Keen of Elie and the Lord Chancellor Robert Buckland MP. However, Mr Philp is still in a good position to input into the legislative procedure on areas of interest to the insurance industry, and if he can maintain his position for the next few years (a fairly tall order considering the current lifespan of Ministers), he will be able to influence the outcome of future reviews of the Discount Rate and whiplash reforms.

So who is Chris Philp MP?

Chris Philp is a fairly new face in Parliament. Elected for Croydon South in 2015 and re-elected in 2017, he was appointed Parliamentary Under Secretary of State at the Ministry of Justice earlier this week. He has responsibility for civil justice and legal services within the House of Commons.  

A former businessman with an interest in enterprise, before entering Parliament he also set up the Next Big Thing charity, which targets disadvantaged areas and attempts to generate interest in business within them.

This is his first Government posting and indeed he has only ever held one committee position, a two-year stint on the Treasury Committee between 2015-2017.

Mr Philp has a good relationship with the current Chancellor, Sajid Javid, having been his PPS before this appointment and supporting him in the Prime Ministerial contest earlier this year. He is well known to Keoghs, having met us in the past to discuss whiplash reforms and CMC regulation.

Keoghs Insight

It’s been a long wait for the whiplash reforms to materialise, so the possibility of further delay at the last minute is frustrating.

To help avoid these delays, it is vital that the Government is reminded of the importance to the industry of having ample time to prepare for the implementation date, and encouraged to bring forward the necessary legislation as soon as they can. We will write to Chris Philp as a matter of priority to ask for his support in this regard.

Brexit and the complicated makeup of government have undoubtedly been taking up more than their fair share of political oxygen in recent years, and there have been occasions that this has seemed to be at the detriment of other pieces of legislation.

But all is not lost for whiplash reforms. We’re at the final hurdle, and the Government insists that April 2020 remains the target date. However, it’s worth noting that at the MoJ/MIB whiplash seminars this week Richard Hutchinson, the person leading the work on the reforms at the MoJ, was keen to stress that Lord Keen wants the reforms to be ‘right not rushed’ – a hint perhaps that the timetable may be slipping.

 

 

Author

Kate Carr

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