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News from the Labour Party on potential reforms affecting insurers

27 November 2014

What effect would an incoming Labour government next May have on the various reforms affecting the handling of insurance claims which have been brought in during the current parliament?

While shadow justice minister Andy Slaughter MP had given us his early thoughts during the Labour Party Conference in September, he expanded on them during a speech yesterday at the APIL autumn conference.

Supporting claimant lawyers

At the Labour conference, Mr Slaughter had tried to reassure claimant lawyers that “we are on your side.” Yesterday, there was more of the same, with the shadow minister saying that “claimant injury lawyers may be wondering why they have been the subject of so much interest from government in recent years.”

He saw there having been a “systemic attack” on claimants and their lawyers over the last 4 years, as part of “a one-sided game, with government sitting on the side of insurers.” His sympathies as a former practicing barrister with experience of claimant injury cases were apparent.

LASPO

In September, Mr Slaughter had said that it was his view that if elected, a Labour government should carry out an immediate review of what changes brought in by the Coalition Government could be reversed, and that he included in his list Part 2 of LASPO which had introduced the Jackson reforms. We found it surprising then that he could speak in that way when LASPO clearly needed time to bed in before it could be assessed, where the Act was based on a weighty independent report from a senior judge which had been written for the Master of the Rolls and so was outside the political process, and where that report (as well as the Supreme Court’s judgment in Coventry v Lawrence) was highly critical of the pre-LASPO regime.

We learned more of the Labour view on LASPO from Mr Slaughter yesterday. His current view is that “an early review” of the Act is needed, effectively bringing forward the review which is already intended to take place in 3-5 years. He saw LASPO as having “pleased the government and the insurance industry, but it did little for injured parties.”

And it is now clear that Mr Slaughter’s issue is not apparently with the Jackson Review itself, but that instead LASPO “went too far”, and “cherry picked parts of Jackson and tipped the balance too far in favour of the defendant.” He failed however to give any detail behind this view. Nor did he claim any support for his view from Lord Justice Jackson himself, and he may be mistaken if he were to expect it. He gave no clues how a meaningful review could be carried out so early when there are still many transitional cases (started pre LASPO) passing through the process, such as pre 1 April 2013 CFAs with recoverable additional liabilities.

Fraud and fundamental dishonesty

While Mr Slaughter made no direct reference yesterday to any criticism of the incoming changes brought about by the Criminal Justice and Court Bill allowing courts to dismiss claims where they were fundamentally dishonest, he claimed he saw no reason why fraud had taken “centre stage” in injury claims.

While he accepted that fraud “may be an issue” and “should be taken very seriously”, he did not “want to see it so dominant an issue that, rather than tackle fraud as fraud, you take the approach of depressing litigation overall so that you take out the good with the bad.”

His view was that, 

We have to reverse the trend. We have to ensure that meritorious claims, whether in road traffic or employer liability are heard. Fraud has been used as a weapon to question claims generally.”

Beyond the rhetoric, effectively querying the extent of the issue, he gave no indication as to how a future Labour government might decide to take action. Does he already have clause 56 of the Criminal Justice and Courts Bill in his sights even though it is not yet on the statute book? Or on the other hand, is the lack throughout his speech of any specific measure that he would want to see taken, significant?

SARAH Bill

Mr Slaughter’s critical thoughts on the Social Action, Responsibility and Heroism Bill currently passing through parliament were already well known. “Poorly drafted waffle”, “irrelevant and frivolous” were his comments yesterday.

Another of the speakers at the same conference suggested that in terms of claims against the MoD, the Bill was in conflict with the Armed Forces Covenant of May 2011 which in the MoD’s own words “lists the nearly 100 real, tangible commitments the government has made to the armed forces community.” The Bill is a short one, at only 5 clauses, and is currently being considered by the House of Lords. This speaker’s suggestion, serious or not, was that at best it was a piece of PR, and that it would best be dealt with by removing the principal 3 clauses and fitting the remainder in a tweet that could then be sent from Secretary of State Chris Grayling’s Twitter account.

In summary

Mr Slaughter was of course speaking to his particular audience and his remarks should therefore be seen in context. He was short on concrete proposals and may not of course even be in post should Labour be elected. But if his views are a reflection of a broader opinion within the Labour Party which is then elected into government then there are challenging times ahead for insurers.

If on the other hand a Conservative government is elected in May, we are likely to continue on the current programme of reform which may suit insurers rather better. If that is the outcome of the General Election, then as Mr Slaughter sees things, we would be “entering a bleak world as far as claimants are concerned” as he clearly expects the Tories would continue with the reform process “at pace”.

Current polls of course show the next Election is looking too close to call, but its outcome will be significant on the direction of reform during the next 5 years.

Contact

For more information please contact Simon Denyer, Partner on +44 (0)161 604 1551 or email simon.denyer@dwf.co.uk

By Simon Denyer

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

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