Ellen Bennett, executive editor

Jack Straw’s lacklustre response to the Jackson Review is a worrying sign. The justice secretary this week thanked Sir Rupert Jackson for his 12-month investigation into civil litigation costs and the resulting 558-page report packed with controversial and far-reaching proposals, and said he “looked forward to considering these proposals in detail”. That is, of course, just what he won’t be able to do if the Conservatives win a general election in a few months’ time.

Jackson’s interlocking proposals have been broadly welcomed by insurers because, while there are a few bitter pills to swallow, taken together they would simplify the system, improve equity and proportionality in costs, reduce the outrageous sums pocketed by claimant solicitors and ultimately benefit victims of personal injuries.

But they would require nine Acts of Parliament to become law. How likely is a new administration to share the insurance industry’s view that reform of the personal injury system is a priority on this scale?

The Jackson Review provides a valuable blueprint for reform, but look at what happened to the Woolf Reforms more than a decade ago. They were watered down, implemented piecemeal, and as a result, largely failed. The same, or worse, could happen here. So keep the champagne corked for now – there’s still a long way to go.

Motor market gets a jump start

Meanwhile, the effects of escalating claims costs are still being felt – particularly in the stuttering motor market. New Zurich boss Stephen Lewis made his first headlines this week, announcing the insurer’s plans to hike motor rates by 20% on broker business, and a similar amount on direct.

The motor market is running at a combined ratio of something like 120%. If recent actuarial warnings that motor reserves have run dry are to be believed, others will have no choice but to follow Zurich’s bold lead. As the weakest carriers are picked off by consolidation and closure, could 2010 be the year when the motor market finally hardens? IT

Topics