February 2020
Starting with developments from the end of the month, yesterday brought the expected announcement that implementation of the whiplash reforms is being pushed back to 1 August, along with news that ADR will no longer be part of the online Service and that the children and protected parties will be able to pursue their claims on the fast track. Nigel Teasdale provided his thoughts on the announcement in his update yesterday. Staying with the reforms, the new portal Official Injury Claim went live for registrations in January, and the statutory instrument dealing with the requirement for insurers to report on savings is likely to be signed off shortly.
We have updated our Whiplash Reforms summary page with the recent developments.
Instead of our usual Looking Ahead last month, we asked a range of DWF experts to give their predictions for insurance claims handling for 2020 and the next decade. If you haven't yet read it, you can download it here (pdf).
Casewatch
Whilst we are still awaiting judgments from the Supreme Court in the highly anticipated vicarious liability cases of Various Claimants v Wm Morrisons Supermarket and Various Claimants v Barclays Bank Plc, the Court of Appeal has been busy producing judgments in a range of cases of interest for insurance claims handling – from costs decisions in Lejonvarn v Burgess and Ainsworth v Stewarts Law LLP, to the historic abuse case of FZO v Adams & London Borough of Haringey and the construction appeal in Manchikalaparti & Ors v Zurich Insurance PLC & Anor.
Also, of particular interest was the news that the Supreme Court has refused the MIB permission to appeal in the case of MIB v Lewis in which it was held that the MIB was liable to indemnify a claimant in respect of an injury suffered when he was struck by an uninsured vehicle on private land. This would now appear to be the end of the road for the MIB's challenge, and as we concluded in our update following the Court of Appeal decision, the need to review and reform the Road Traffic Act 1988 and the approach to be taken post-Brexit will become more pressing.
Head over to our Casewatch page for further details, links to judgments and DWF updates, and a look ahead to forthcoming appeals.
Consultations
We are continuing to track relevant consultations on our Current Consultations page.
There hasn't been too much activity on consultations in recent months, although having said that, the MOJ has this week commenced a stakeholder engagement exercise on the MedCo qualifying criteria.
The Civil Procedure Rule Committee has also produced rule changes in relation to a couple of issues that have been under consultation:
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although consideration of the model order for directions in credit hire cases has been deferred for consideration alongside the whiplash reforms, a rule change will come into force on 6 April, 2020 requiring the pleading of specific matters in credit hire cases;
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CPR r.12.3 is being amended to prevent default judgment being entered if an acknowledgment of service or defence is filed before judgment is entered. This rule will also come into force on 6 April, 2020.
Legislation
Our Legislation page continues to track legislation of interest on the horizon. This month, there is news of further progress on the proposed amendments to the Motor Insurance Directive. Negotiations, known as the trilogue, are currently taking place between the European institutions with the aim of reaching a compromise on the amendments.
Also, the government has resubmitted the Fatal Accidents Act 1976 (Remedial) Order 2020, which provides for the award of bereavement damages under the Fatal Accidents Act 1976 s.1A to be available to a cohabitee. In doing so, it also published its response to the Joint Select Committee on Human Rights report and in doing so confirmed it had no plans for further reform in this area.
News in Brief
Personal injury Discount Rate: Northern Ireland. The political impasse in Northern Ireland that lasted three years has hampered progress on various issues there, but now that the Northern Ireland Executive has been reinstated, it is starting to play catch up. The personal injury discount rate has throughout that time remained at 2.5% although anecdotal evidence is of settlements at a lower rate 2017. This issue is now firmly on the Executive's agenda and was due to be discussed in the committee for justice on 27 February. In the meantime interested parties have received correspondence from the Department of Justice, advising that the Minister of Justice has asked officials to undertake a statutory consultation with the Government Actuary and Department of Finance under the Damages Act 1996, on a proposal to change the rate to -1.75%, pending the Minister giving consideration to reviewing the legal framework for setting the rate in Northern Ireland in due course.
Damages Based Agreements. In October, Professor Rachael Mulheron and Nicholas Bacon QC delivered the outcome of the review they were commissioned to undertake by the Ministry of Justice in December 2018, with a view to redrafting the Damages-based Agreements Regulations 2013 so as to resolve some of the difficulties which had arisen under those regulations. The headlines are a change from the Ontario Model to the Success Fee Model so that recoverable costs are paid in addition to the DBA payment and are not incorporated within it. There is also explicit permission for hybrid DBAs. Feedback was requested and will be collated into a supplementary report for the information of the Ministry of Justice. You can read more on the review in Litigation Futures and this opinion piece by Rachel Rothwell, editor of Litigation Funding magazine. In December, the Law Society responded to the project – see also Gazette article Law Society backs efforts to encourage DBAs
Independent Review of Legal Services Regulation. We have previously reported on this review being undertaken by the Centre for Ethics and Law in the UCL Faculty of Laws. It began in October 2018 and was due to report to the MoJ in January 2020. In September Head of the Review, Honorary Professor Stephen Mayson has published his interim report (pdf) which contains findings about the current regulatory framework, propositions for reform, and consultation questions on these propositions and the consequential issues they raise. This will now be followed by further meetings and discussions during the autumn. The consultation period was extended to 20 December 2019 and the final report is now due in March 2020. In January, the Law Society responded to the interim report and Legal Futures reported on the response. On 25 February, Professor Mayson gave a speech (pdf) to the Westminster Legal Policy Forum setting out his latest thoughts.
Financial Conduct Authority: Sector Report. In February, the FCA published its annual Sector Views, an assessment of the risks and potential harm to consumers across financial services markets. The penalisation of loyal customers in insurance pricing practices continues to feature. Read more about the key findings for the insurance sector in Insurance Business
Independent Inquiry into Child Sexual Abuse. The outcome of Phase 2 of the Accountability and Reparations Investigation is expected this year. After the publication of the report on the first phase in September, Phase 2 is considering changes to the law of limitation in respect of non-recent child sexual abuse, and also the potential for a redress scheme. This month the Inquiry held an extra sitting day. In the meantime, this week the Inquiry published its Westminster report which finds political institutions have significantly failed in their responses to allegations of child sexual abuse for decades.
Contact
For further information please contact Alex Fusco, Professional Support Lawyer on 0161 603 5211.
You can find all previous editions of Looking Ahead here
