Motor Brief market insights – October 2019

A summary of key developments including an update on the Civil Liability Act 2018 and the whiplash reforms, Scotland’s discount rate, the call for an overhaul of current laws on use of hand-held mobile devices whilst driving, and the latest on the Law Commissions’ consultation on autonomous vehicles.

Civil Liability Act 2018 and the whiplash reforms

Government publishes results of consultation on a revised medical reporting process

On 5 September 2019, the government published its analysis of the responses to its consultation on a revised medical reporting process for unrepresented claimants, and outlined the decisions it has made. The proposal to extend the scope of the MedCo system to include “all initial medical reports for all RTA related PI claims” under the revised small claims track of £5,000, is being taken forward.

The government has decided that “for claims where there is a non-soft tissue injury (whether or not accompanied by a soft tissue injury)” initial medical reports will be provided by “GPs/A&E consultants only”. This will however, be kept under review.

Fixed recoverable costs currently in place for soft-tissue injury medical reports, will be extended to include the provision of initial medical reports for RTA related non-soft tissue injury claims up to £5,000.”

In addition, “new customer care qualifying criteria, standard service level agreements and accessible information for claimants will be developed”.

Contact: Niall Edwards

The Whiplash Reforms programme and new ‘litigants-in-person’ IT portal

Following updates from the MIB and Ministry of Justice (MoJ) in July and September on the Whiplash Reforms programme (including the new online portal being developed to support the changes), the key dates, actions and observations are as follows:

  • Mid-November 2019 is the target date for public-testing of the litigants-in-person portal that is currently being built, with testing to continue through to the end of February 2020.
  • The Civil Procedure Rules for raising of the small claims track limit and the pre-action protocol – the MoJ is working with the Civil Procedure Rules Committee to have these available for the public testing.
  • A public call centre is also being set up and will be part of the public test period.
  • 6 April 2020 – remains the target launch date for the online portal and implementation of the associated changes under whiplash reform programme (including the whiplash tariff, and changes to the Rules required for the extension of the small claims limit to £5,000 for RTA claims and the pre-action protocol). MoJ officials have however, indicated that whilst there is confidence the date can be met, no guarantees can be provided.

Contact: Ian Davies

A new discount rate in England and Wales is set at minus 0.25%

After a long reform process lasting nearly two and a half years, on 15 July the Lord Chancellor determined a new personal injury discount rate of minus 0.25% effective from 5 August 2019.

The old rate of minus 0.75% was overcompensating claimants and required an upwards adjustment in order to deliver fairer compensation levels. The Ministry of Justice had previously signaled a likely outcome of between 0% and 1%.

Contact: Mark Walsh

Related item: The new discount rate: a minus move

Discount rate in Scotland to remain the same

On 30 September, the Government Actuary Department published their determination of the personal injury discount rate in Scotland, concluding that the discount rate should remain unchanged at minus 0.75%.  Under The Damages (Investment Returns and Periodical Payments) (Scotland) Act 2019 this rate took effect on 1 October and is likely to prevail until reviewed in five years.

Contacts: Rory Jackson and Peter Demick

Related item: No change in Scotland’s discount rate is a minus move

Call for overhaul of current laws on use of hand-held mobile devices whilst driving

The Transport Select Committee’s ‘Road Safety: driving while using a mobile phone’, published on 13 August 2019 calls on the government to overhaul current laws on the use of mobile phones or other devices whilst driving.

Since 2003, it has been an offence to use a hand-held mobile phone or other device whilst driving, with regulations stating that such phone or device is to be treated as hand-held, “if it is, or must be, held at some point during the course of making or receiving a call or performing any other interactive communication function”.

The reports states that “although the offence is framed around the use of a hand-held device, research shows that using any mobile phone or other device while driving – whether hand-held or not – is a distraction that is detrimental to a driver’s ability to drive safely.”

The report therefore recommends that the government explore options to extend the current band on driving while using a hand-held mobile or other device, to hands-free devices.

Contact: Naomi North

Removal of statutory declarations following an accident

In order to bring existing legislation in to line with European law, The Motor Vehicles (Compulsory Insurance) (Miscellaneous Amendments) Regulations 2019 (the Regulations) will amend s.152 of the Road Traffic Act 1988 (RTA).

The Regulations will come into effect on 1 November 2019 and will mean that insurers will no longer be able to obtain and rely upon declarations to void a policy following an accident, in order to refuse payment of compensation to third parties. Insurers will however be able to rely on declarations obtained prior to an accident, and any court declarations validly obtained prior to 1 November 2019, will not be affected by the Regulations.

The spectre of these reforms to the RTA really underlines the importance of building a process designed to protect against unwanted risks by vetting potential insureds and policies at the frontend and then by validating claims at the backend of any claims process.

Contacts: Niall Edwards and Jennifer Harris

Related item: Section 152 Road Traffic Act 1988 amendment: removal of statutory declarations following an accident

Law Commission publish response to automated vehicles consultation

On 19 June 2019 the results of the Law Commission of England and Wales and the Scottish Law Commissions’ joint preliminary consultation into the safe regulation of automated vehicles, was published.

The results echo the importance of manufacturers working collaboratively with government and insurers on data management in the new driverless vehicles environment.

Reassuringly, the consultation identified strong support for the establishment of a safety assurance scheme to include responsibility for driver training as well as continuing roadworthiness, amongst other key safety matters.

As part of the Law Commissions’ three-year review into the regulation of automated vehicles, a second consultation paper is expected later this year, considering their use in the provision of passenger services. The Law Commissions' aim is to provide a third consultation paper in 2020, drawing on responses to both papers “to formulate more detailed proposals on the way forward”, with a final report with recommendations to follow in 2021.

Contact: Niall Edwards

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