Daily Briefing: Friday - New blow against Jackson

This morning saw the temperature rise another notch in the increasingly bad-tempered debate surrounding the government’s plan to reform ‘no win, no fee’ agreements.

The family of Milly Dowler, writing to prime minister David Cameron and deputy PM Nick Clegg, claimed that they had relied on legal expenses insurance to fund their legal action against News International over the hacking by the News of the World of the murdered 13-year-old’s phone.

To secure the Dowlers’ endorsement is a big feather in the cap for the anti-Jackson Review lobby. The family’s action against the News of the World set off the extraordinary train of events that led to the newspaper’s demise.

Two steps forward, one step back?

The insurance industry has made the running over the last year in its campaign to reform the UK’s ‘compensation culture’.

The value of the Dowlers’ letter to the anti-Jackson cause is undermined by the family’s admission that their lawyer would have taken up their case anyway, reinforcing the ABI argument that this debate is about access to redress and not justice.

But Cameron and Clegg will be acutely sensitive to any criticism from the Dowlers, whom they both met during their campaign against News International.

Political manouevres

Cameron in particular has developed a reputation for not being a details man when it comes to the policies that his government is implementing. That is until they hit his own radar, when he has been known to execute some sharp handbrake turns.

In the background, Jonathan Djanogly, who is piloting the changes through parliament, is under fire over allegations that his stake in a family-owned Lloyd’s business raises conflict of interest issues.

Lord McNally, Djanogly’s Lib Dem colleague at the Ministry of Justice, has criticised coverage of Djanogly’s affairs as gutter journalism.

Judging by his pre-election hiring of Lord Young to carry out his review of health and safety, Cameron has a grip on the compensation culture problem. And the civil litigation cost reforms are one element in the wider government growth plan, the need for which becomes more pressing with every fresh piece of economic bad news.

The question for the industry is whether, as the shroud waving becomes more intense, the PM will hold his nerve.

Motor goes into reverse

The motor insurance market looks like it has turned, judging by new figures from comparison site tiger.co.uk

The survey shows that average motor insurance prices were down 2.3% in September compared to August, albeit against the backdrop of a 4.3% year-on-year increase.

This confirms a trend discernable since the beginning of the year, when the rapid rate growth of 2010 began to slow down markedly.

This will be good news for cash-strapped motorists, but less welcome for insurers, who recorded a £1.8bn underwriting loss in motor during 2010, according to ABI figures published yesterday.

However, the latest figures should begin to take out some of the heat surrounding the cost of motor insurance. They indicate that competition is alive and well in the motor insurance market.

It just reinforces the feeling that the Office of Fair Trading, with its recent decision to mount a probe into the motor insurance market, is fighting yesterday’s battle.