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What does Michael Gove's appointment at the MoJ mean for insurers?

Like the General Election result, yesterday’s news that Michael Gove is to be the next Secretary of State for Justice was not expected news. It was reported on Friday that Chris Grayling was keen to continue in the role, but it is to Mr Gove that the Prime Minister has turned to fulfil a role at the MoJ which is seen as particularly significant in this parliament because of the desire on the part of the new government to make progress on issues concerning the Human Rights Act.

Insurers will be asking - What is known about Mr Gove in the context of justice issues, and what effect is his appointment likely to have in the arena of civil justice, within the new parliament where the Conservative Party now hold a majority of 12?

Michael Gove MP

Mr Gove is the MP for Surrey Heath and extended his comfortable majority in last week’s election. By profession he is a journalist, so follows Mr Grayling as another non-lawyer appointed to head the MoJ. Mr Cameron is clearly happy with the concept of this position being held by non-lawyers, a continued break with tradition.

We see this appointment as likely to lead to a continuation of the reforms that Mr Grayling has achieved during his period in charge. Like Mr Grayling’s appointment, that of Mr Gove will be popular with the right wing of the Conservative Party. He is likely to want to build on the Grayling agenda rather than take it off in another direction.

Mr Gove is well known for being a radical reformer, and of being willing to take on where necessary what he sees as vested interests including those of professionals who want to continue the status quo.

This view is mainly based on the fact that in the last parliament, Mr Gove’s first appointment was as Secretary of State for Education, where he keenly pursued a reform agenda. In doing so he fell out with the teaching unions, who accused him of creating a climate of bullying, fear and intimidation within their profession. One critic said that he ignored the views of those working in the system, and instead had a “blinkered, almost messianic self-belief.” His time at Education came to an end when he was reshuffled away to Chief Whip, apparently to bring an end to the controversy created in the department.

Top of the agenda at the MoJ

Top of Mr Gove’s list at the MoJ will be what is seen a key measure to be announced in the Queen’s Speech when the new parliamentary terms opens on 27 May, that is the manifesto plan to replace the Human Rights Act with a British Bill of Rights. Mr Gove will be asked to implement Mr Grayling’s plan published last year in order to achieve this. The desired end result would be that that European Court of Human Rights is no longer a superior court to the UK Supreme Court. No longer would the ECHR be able to issue binding decisions which impact on the UK, but instead its rulings would be advisory only.

A draft bill designed to achieve this is planned to be brought forward by Mr Gove before Christmas. It has not been published as yet. The hurdles to be faced will include trying to secure a majority in both houses of parliament for it, dealing with the issue that HRA protections are required as part of the Scottish and Northern Irish devolutions, as well as overcoming issues of compliance with European law in negotiation with the watchdog for the European Convention on Human Rights – the Council of Europe.

The possible effect of these HRA changes on the claims environment will be looked at in a moment.

Civil justice

Mr Gove’s approach on civil justice

We have to accept that even after the HRA issues have started moving forward, criminal justice will still be higher up Mr Gove’s priority list. He has current issues to deal with as his department takes on criminal lawyers as part of the ongoing dispute on legal aid contracts for that type of work.

There is limited information available so far as to what Mr Gove’s approach will be to civil justice reform.

To remind ourselves, the Tory manifesto had little to say in this area, referring only to the need to reduce “delay and frustration to the public” which it said would be helped by the on-going £375m modernisation of the court system, part of which is to be funded by the recent substantial increase in court fees.

Beyond that, the Sunday Times reported yesterday that Mr Gove would be looking to achieve “faster and fairer access to justice”. There were no clues as to what this means in practice, but it might be a reference to the report from the Civil Justice Council earlier this year in favour of On-line Dispute Resolution for claims worth up to £25k which was welcomed by Mr Grayling’s MoJ at the time. It was not clear then how injury claims would fit into that model, but the emphasis of the proposal was towards cases falling within ODR being dealt with fewer lawyers involved. Or maybe the report refers to Mr Gove wanting to tackle other parts of the civil justice and claims handling processes too in order to bring about speedier results?

According to the Daily Telegraph, Mr Gove has been “put in charge of wielding the axe over widespread cuts to the justice system, including a courts system that is one of the most expensive in Europe.” The basis on which this report has been written is unclear. Is it just a reference to criminal justice, or was intended to refer to civil justice too? Either way, no evidence in support of the claim was put forwards.

A new civil justice agenda?

It is therefore too early as yet to know what Mr Gove’s proposals in this area will be. Some time will need to pass before we learn more. The junior ministers in the MoJ will be announced soon. We will see then whether ministers who have been involved on civil justice reform such as Shailesh Vara and Lord Faulks are to remain in post.

But more reform has to be seen as likely, at least after the more pressing HRA and criminal justice issues have been looked at. Further reforms in the motor arena are surely likely though whether they will go as far as raising the small claims track limit remains in doubt. An extension of the fixed costs regime to all cases worth up to £25k may well happen, and indeed fixed fees may be introduced to claims of values higher than that level too. Quicker claims handling processes all round may be highlighted, including for mesothelioma claims.

Those aspects could be seen as developments of the Grayling agenda. Whether the Gove agenda will have more significant reform within it remains to be seen.

The position taken by Mr Gove on the recent large court fees hike remains unknown. He will be the minister who will receive the data on what may be a reduced number of issued claims and the impact of that both on access to justice issues, as well as on income for the government’s finances, and will need to decide if changes are needed.

Effect of reform on the use of the HRA in claims

At present, every new claim form needs to have the question answered as to whether the claim does or will include any issues under the Human Rights Act 1998. But in reality, does the Act impact on many claims dealt with by insurers?

In reality, repeal of the Act would probably only affect a limited minority of claims, and in any event we’d need to see whether the cases affected by its withdrawal would still be covered by the replacement Bill of Rights.

The HRA has been considered by the Supreme Court in at least 3 cases this year. In considering the Recovery of Medical Costs for Asbestos Diseases (Wales) Bill the court decided that the Bill was outside the legislative competence of the Welsh Assembly on 2 grounds, one of which that it was incompatible with the rights of insurers to peaceful enjoyment of possessions under Article 1 to the First Protocol to the ECHR.

In Michael v Chief Constable of South Wales Police the claim by the family of a victim of crime against the police was allowed to proceed under Article 2 of the ECHR (the right to life) even though the police would not have been liable in negligence.

And in Coventry v Lawrence, where judgment from the Supreme Court is awaited, the court has heard argument as to whether the recoverable success fee and ATE regime brought to an end by LASPO is compatible with the defendant’s right to a fair trial under Article 6 of the ECHR.

Some types of claim see the ECHR used more frequently. The Michael case mentioned is just an example of how claims against State authorities such as the police or the prison service can currently be founded on the ECHR under use of the HRA. Whether this will change depends on Mr Gove’s progress in this area.

Conclusion

We await news of Mr Gove’s plans for the MoJ, both in terms of the Human Rights Act, but perhaps more significantly for insurers, on what are likely to be intentions for further reforms in civil justice. Insurers may expect Mr Gove to be willing to listen to their arguments, and if he finds favour with them, to take them forward with his usual vigour.

Contact

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

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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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