Civil Liability Bill: One concession but Gauke stands firm on PI reform
attle lines were firmly drawn this week as MPs largely kept to party lines debating sweeping personal injury reforms.
Conservative MPs lined up in the House of Commons yesterday to support the government’s Civil Liability Bill and back efforts to restrict the value and frequency of RTA claims.
During the second reading of the bill, Labour made clear it could not support the legislation in its current form: the party abstained from voting on this occasion, but pledged to vote against the bill on third reading if significant changes are not made at committee stage.
The government, which wants to impose a tariff on whiplash damages and increase the small claims limit to £5,000 for RTA claims (and to £2,000 for employer and public liability claims), made one small concession: so-called ‘vulnerable’ road users such as cyclists and pedestrians will not be subject to the new £5,000 threshold.
But on other matters, there were few signs that ministers are prepared to compromise on the key elements of the legislation. ‘These are simple claims and it is right that we also take action to address some of the concerns that we have,’ said justice secretary David Gauke. ‘I believe that we have the balance right in terms of the increase to £5,000.’
Gauke said the bill provides that the tariff – which sets significantly reduced damages for injuries with effects lasting up to two years – will be set following consultation between the lord chancellor and the lord chief justice. The judiciary will have discretion to increase the compensation payable in exceptional circumstances and the tariff will be reviewed at least every three years.
The increased small claims limit means claimants cannot recover legal costs for cases valued at less than £5,000 – effectively removing lawyers from the vast majority of claims.
Gauke told the commons that the new online system for handling these claims will be designed for those with no legal advice or training, and will be ‘as simple to use as possible to ensure the claimant journey is as smooth as it can be’. The system is scheduled to be created and fully tested for use by April 2020.
Gauke also confirmed, as had been expected, that the government will amend the bill to force insurers to pass on some of the estimated £1.1bn they will save in legal costs and damages, although that amendment has yet to be published.
The justice secretary did not lack support on his own side for the legislation, with a number of Conservative MPs giving their full support.
The exceptions were justice committee chair Bob Neill and former committee member Alberto Costa. Both were in favour of measures to tackle excesses in the claims sector, and in particular to deal with fraud, but they also expressed concerns about the basis for some reforms and asked why more was not being done to clamp down on claims management companies.
‘The problem is there is an industry of unregulated and unauthorised non-lawyers preying on vulnerable people and abusing the system,’ said Costa. ‘We have to recognise and tackle that.’
Every Labour MP contributing to the debate was critical of the bill, with questions raised about why injured drivers were being treated differently to other injured people, why more was not being done to combat cold calling, and whether it was right to remove representation for people who brought a claim.
Harrow West MP Gareth Thomas said the bill ‘amounts to a huge inequality of arms in the courts system for those who have experienced road traffic accidents. Individuals deprived of legal advice will have no choice but to act for themselves, while the insurance companies defending claims will still have huge resources to pay for lawyers to take on the unrepresented’.
The bill now passes to committee stage before it returns to the commons for a third reading.