The Civil Liability Act is here

The Bill didn’t have the smoothest of rides through the parliamentary process and picked up a lot of opposition along the way.

Introduction

With reports that the Civil Liability Bill (“the Bill”) received Royal Assent today to become the Civil Liability Act 2018 (“the Act”), the insurance industry can perhaps be forgiven for breathing a sigh of relief that such important personal injury reforms made it onto the statute books despite Brexit.  

The Act

The Bill didn’t have the smoothest of rides through the parliamentary process and picked up a lot of opposition along the way. However, the House of Lords endorsed the final version of the Bill as it passed back to the Lords from the Commons in a process known as ‘ping pong’. It was merely a matter of time before the Bill became the Act. 

The provisions of Part 1 of the Act relating to whiplash claims and the introduction of a tariff for low value injury claims as well as a ban on pre-medical offers will come into force as originally mooted by government in April 2020. Part 2, relating to the discount rate comes into force immediately with the Ministry of Justice (“MoJ”) already issuing their call for evidence to help them set the new discount rate. The fact that the MoJ issued their call for evidence before the Act received Royal Assent signals a desire to get a new rate in place as soon as possible.

We are still waiting for the draft statutory instrument needed to increase the small claims track limit as proposed to £5,000 for road traffic accident (“RTA”) personal injury claims and £2,000 for all other matters, but we fully expect it to land in time for the change to come into force at the same time as the whiplash provisions of the Act.

It remains to be seen how Claims Management Companies (“CMCs”) will react to the introduction of the tariff and whether they will adapt their business models to assist those claimants who may chose to forego legal representation in the face of the reduction in recoverable fees. However, the Financial Conduct Authority’s (“FCA”) policy statement following its recent consultation on the new regulatory regime for CMCs will give compensators some comfort that the regulator is watching and that dysfunctional behaviours from both sides of the claims fence will not be tolerated.

Can we help?

We will be monitoring the impact of the Act and its various provisions as they come into force and will report back as soon as there are further developments.

In the meantime, should you wish to discuss this in more detail, or would like assistance with any other matter, please do not hesitate to get in touch.

Rob Williams, Partner - Political Affairs

Bavita Rai, Partner - Innovation & Client Affairs

Kurt Rowe, Associate - Market Affairs 

Doug Kier, Partner - Scottish Affairs

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