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A summary of key developments including an update on the discount rate review, a new blueprint for fixed costs, the reinstatement of measures to tackle whiplash claims; progressing the liability framework for autonomous vehicle technology, a new model code for credit hire and salvage hire, a new insurance ‘pay as you go’ product, as well as updates on Brexit and data protection legislation.
Discount rate review: government response awaited
The Ministry of Justice have confirmed that the response to the consultation is still with ministers who are considering next steps. They have not given a date for when a response can be expected. The Association of British Insurers has confirmed it will continue to engage with officials to push for the response to be published as soon as possible. A summary of responses was expected to be published within three months of the end of the consultation, namely by 11 August 2017.
Related item: Kennedys urges government to bring discount rate into real world
Contact: Richard West
Jackson report: a new blue print for fixed costs
Lord Justice Jackson’s final report on extending the fixed recoverable costs (FRC) regime was published on 31 July 2017. Jackson LJ has set out a blue print that will bring, if implemented, a grid of FRC for all fast track cases and a new ‘intermediate’ track for certain claims up to £100,000. The Ministry of Justice can bring about change by way of Statutory Instrument (although the capped costs proposal for Judicial Review claims would, it believes, require primary legislation). The target date is said to be October 2018. A government-led consultation on the proposals is now expected.
Related item: Jackson report: a new court track and a new world of fixed fees for claims up to £100,000
Contact: Ian Davies
Civil Liability Bill: whiplash reforms reinstated
The Civil Liability Bill announced in June’s Queen’s Speech signals the reintroduction of the whiplash reform measures that fell with the snap general election. The Bill will tackle the “continuing high number and cost of whiplash claims” – seeking to ban offers to settle claims without the support of medical evidence and introduce a new fixed tariff of compensation for whiplash injuries with a duration of up to two years. Conceivably the Bill could include reforming the discount rate framework. The Queen’s Speech was silent on the earlier proposals to introduce two small claim thresholds - £5,000 for whiplash injuries and £2,000 for all other personal injuries.
Related item: The politics: a weakened Prime Minister, a minority government
Contact: Niall Edwards
Driverless cars: commitment to innovation
The Queen’s Speech also outlined the re-introduction of the draft autonomous vehicles legislation in the form of the ‘Automated and Electric Vehicles Bill’. As previously, the purpose of the Bill is to ensure the UK continues to be at the forefront of developing new technology in electric and automated road vehicles. The Bill will extend compulsory motor vehicle insurance to cover the use of automated vehicles, to ensure that compensation claims continue to be paid quickly, fairly, and easily, in line with longstanding insurance practice.
Related item: Driverless vehicles: a blueprint for successful implementation
Contact: Rachel Moore
Model order credit hire: an opportunity for fairness
The CPR Committee consultation relating to the model order for directions to be used in all credit hire cases closed on 2 August 2017. In particular, submissions were sought with regard to the provision on disclosure and witness evidence, as well as exchange of rates evidence. In our response, we confirmed our agreement with the objective of fair and proportionate dispute resolution.
Related item: Last call for prestige credit hire: another nail in an ever-closing coffin?
Civil justice reform: a subject that never rests
On 15 June 2017, the Master of the Rolls delivered this year’s Lord Slynn Memorial lecture on the ‘civil court of the future’. Sir Etherton remarked that one might rightly ask ‘when are we not’ in a time of significant civil justice reform. In acknowledging that the civil reform, together with the contemporaneous reforms to criminal justice, are a £1bn six year plan, Etherton focuses exclusively on civil reform.
Related item: The £1 billion plan: the civil court of the future
Contact: Deborah Newberry
Salvage code updated: new focus
The voluntary insurance industry code of practice for dealing with motor salvage has been updated, with effect from 1 October 2017. The code has not been updated for 10 years and this version follows an extensive, two year review including consultation with multiple stakeholder groups including insurers, vehicle manufacturers and police. The new code reflects the increasing complexity of newer vehicles which can make it harder for damaged cars to be safely repaired. It also has a greater focus on the condition of the vehicle rather than repair costs. The updated code increases the scope to include some guidance on motorcycles and quadricycle and has introduced minimum qualification requirements for all individuals who categorise vehicle salvage.
Related item: High Court upholds decision to order a credit hire company to pay 60% of defendant’s costs
Contact: Ian Davies
Occasional driving: pay as you go car insurance
A new car insurance product has been introduced for car owners who only drive occasionally. The car owner is required to take out a monthly subscription and pay for each hour the car is used. According to the DVLA, there are approximately six million cars that are described as being driven ‘very infrequently’ in the UK – representing a significant market. The cover is for one car only and the driver would still accumulate a non-claims discount (if applicable). The product provider estimates that drivers could save up to seventy per cent on their annual premium.
Contact: Jennifer Harris
Brexit: flagship legislation published
The standout piece of legislation that will be the legislative process by which the UK exits the EU has been laid before parliament. The ‘European Union (Withdrawal) Bill’ follows the Great Repeal Bill White Paper, which was published in March 2017. The Bill is likely to be one of the largest legislative projects ever undertaken in the UK. There are currently more than 12,000 EU regulations in force. Parliament has passed 7,900 statutory instruments implementing EU legislation and 186 Acts which incorporate a degree of EU influence.
Related items: EU motor law: the impact of Brexit for the UK
Contact: Joy Middleton
New age data protection: statement of intent
On 7 August 2017, the government published its Statement of Intent for the Data Protection Bill, following a period of consultation earlier this year. It contains areas that are relevant for insurance – most notably the government will bring forward exemptions to the Bill to ensure underwriting can carry on under much the same data rules as it does currently. The government will use this Bill to mirror a number of existing international standards - specifically the EU General Data Protection Regulation and enshrine their requirements into UK Statute. The new Bill will replace the UK’s existing Data Protection Act. The government intends to lay the Bill once parliament resumes in September.
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Contact: Deborah Newberry