Clyde & Co Respond to Civil Liability Bill

Following yesterday’s second reading of the Civil Liability Bill in the House of Commons, two partners from international law firm Clyde & Co have responded.

Mark Hemsted, partner, said: “This Bill is all about reducing the cost of motor insurance for the British public. While the headline debate has been about access to justice, the real tussle is how much of the legislation can pass through the House intact and how much will be watered down.

“As far as the insurance industry is concerned, yesterday’s concession on ‘vulnerable’ road users is a small price to pay for moving this legislation forward.

“There remain two key issues: first, how whiplash will be defined by the legislation and second, the value of claim on which claimant solicitors can recover their costs.

“The ultimate definition of whiplash will have a major impact on this legislation’s ability to stamp out fraud. If it’s not broad enough – for example, it only includes neck injury – anyone with a bruise or scrape elsewhere will use this to avoid the proposed tariff-based systems of awards.

“The sum at which the small claims limit is set is also crucial. Currently it’s £1,000, so claimant solicitors can recover their costs from the losing party on relatively small claims. If the sum is raised to £5,000, claimant solicitors have a much bigger hurdle to leap before they can recover costs. That could deter claims – or it could lead to a sudden increase in the number of higher value claims as it clearly creates an incentive to go large, so to speak.

“One point insurers generally agree on is that the delay to the Bill’s implementation till 2020 will allow the court service to set up a claims portal and to provide protection for unrepresented claimants, thus weakening the access to justice claims.”

Jenette Newman, partner, said: “The proposed reforms are overwhelmingly backed by insurers with a welcome commitment to pass the savings on to policyholders. The reforms will create a fairer system and will utilise modern processes in claims for whiplash.”

NEWS EXTRA: OFFICIAL ABI COMMENT

Commenting on last night’s Second Reading of the Civil Liability Bill, Rob Cummings, Head of Motor and Liability at the Association of British Insurers (ABI) said:

“There was significant support for the Civil Liability Bill in the Commons last night. It was good to hear MPs urging reform of the broken personal injury compensation system in the interests of customers and taxpayers more widely.

The Secretary of State David Gauke was right to emphasise the strong commitment from insurers that the cost benefits as a result of the Bill will be passed on to customers. We will continue to engage with those who have raised concerns about the Bill to explain why we think it’s the right way forward.”

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