Government exempts vulnerable road users from claims limit increase

The Civil Liability Bill had its second reading within the House of Commons yesterday, and it looks like the claimant lawyers have failed in their attempt at the changes they wanted.

Tory MPs appeared to be fully behind the bill, but Labour was less than welcoming, with MPs saying they could not support the bill in its current form.

The insurance industry made a small concession regarding vulnerable road users, who will no longer be subject to the new £5,000 limit on small claims, meaning pedestrians, cyclists and horse riders will be able to claim their legal expenses back.

Shirley Woolham, chief executive of Minster Law, said: “I am pleased the government has listened to our concerns over the threat to vulnerable road users and is proposing to remove them from the scope of the personal injury reforms, although we are yet to see the detail.”

Meanwhile, Rob Williams, partner and head of insurance at Weightmans called the decision “sensible,” but doesn’t think the fight is over.

He said: “We anticipate that pressure to re-think its proposals for the small claims track (SCT) will continue but, with that aspect of the proposed changes being so key to the overall package of reforms, the expectation must be that the Government will remain resolute.”

But Mark Hemsted, a partner at Clyde & Co called the concession “a small price to pay for moving this legislation forward” and now wants to focus on the definition of ‘whiplash’ and the value of claim on which claimant solicitors can recover their costs.”

Significant support

The industry felt that the support for the bill was encouraging to see.

Rob Cummings, head of motor and liability at the ABI said: “There was significant support 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 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.”

Meanwhile, Martin Milliner, claims director at LV= said: “We’re pleased that yesterday’s debate in the Commons largely signals a full steam ahead approach for the Bill.

“While personal injury lawyers continue to bemoan the fact that the proposed legislation is unfair to customers, the reality is that it couldn’t be further from the truth.

“This legislation has been designed to help customers and they should be pleased that action is being taken to help reduce household insurance bills.”

Jenette Newman, partner at Clyde and Co said: “The proposed reforms are overwhelmingly backed by insurers with a welcome commitment to passing the savings on to policyholders.

“The reforms will create a fairer system and will utilise modern processes in claims for whiplash.”

The dangerous side

However, the claimant lawyers were still vigorously opposed to the bill and will feel hard done by after all their efforts.

Donna Scully, director at Carpenters Group said: “It’s a pity that the debate degenerated quickly into a political ruck, with so-called ‘profiteering insurers’ on the one side and a compensation culture being exploited by ‘expensive lawyers’ on the other. That does not benefit genuine motor customers.

“There are some really scary practical consequences of the Bill and the wider reforms, and I hope that some of the real issues and challenges, the consequences of the reforms and some of the practical difficulties still to be sufficiently resolved, will be explored in much greater detail as the Bill progresses.”

Woolman continued saying: “It is bizarre that, whether the injured person is in a car, or a motorcycle, or riding a bicycle, will become a more important factor in deciding access to justice than the injury itself.

“I hope the government will address these inconsistencies by ensuring a level playing field for all non-fault injuries and make sure all our citizens have their access to justice protected.”

And Andrew Twambley, spokesman for Access 2 Justice said the government had “run out of arguments” to justify the “punitive reforms”.

He then pointed out that “the proposed changes mean that people will get more compensation for a delayed train than they would for an injury in a road traffic accident that wasn’t their fault..”

Portal

One thing the industry and the lawyers agreed on was that a portal to help those without legal advice or training is crucial, and that is why the reforms were delayed for a year until April 2020.

Justice Secretary David Gauke said the portal will be “as simple to use as possible to ensure the claimant journey is as smooth as it can be.”

The committee stage is due to be held in the House of Commons on 11 September 2018.