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Civil Liability Bill passes Second Reading despite opposition

On the first day back after summer recess MPs started their consideration of the CLB in the House of Commons. At the end of a debate which was time-restricted due to Brexit issues, the Bill was given its Second Reading with Labour abstaining, and a Public Bill Committee will now be established to review its detail. That committee is due to complete its work by 9 October, with sittings provisionally due to take place on 11 and 13 September.

Most of the debate centred on Part 1 of the Bill dealing with the whiplash changes: Part 2 relating to the discount rate was as expected less of an issue to MPs. The government largely maintained its position and argued strongly in favour of the Bill, while the Opposition was generally hostile to Part 1.

The government's position

This was outlined by the Secretary of State David Gauke and by Justice Minister Rory Stewart.

One further compromise was agreed by government: the exclusion of vulnerable road users – that's people who are not car drivers or passengers and so includes pedestrians, cyclists and horse riders – from not only the tariff but from the Small Claims Track increase to £5,000 as well. Changes to the Bill will set these out.

It was also confirmed that an amendment would be with the Commons shortly and so would be available to the Committee to address the point already confirmed in the Lords about providing a mechanism to ensure insurers pass on savings.

On other matters, Mr Gauke said that it was right that the government continued to look at the issue of referral fees, which they were doing in the context of the Financial Guidance and Claims Act. No detail beyond that was given.

Mr Stewart said on the matter of the discount rate reforms in relation to periodical payment orders that Mr Gauke had written to the Master of the Rolls to try to produce an outcome in which they were made more frequently. He agreed to discuss off line with Tory MP Chris Philp the idea that PPOs become the default setting in those cases.

The Labour position

This came from Richard Burgon the Shadow Secretary of State and Shadow Justice Minister Gloria De Piero.

Labour saw Part 1 of the Bill as another part of a 2-tier justice system and believed that the amendments narrowly defeated in the Lords would have improved it.

They could not support the Bill as currently drafted. While they abstained yesterday they would vote against it at Third Reading unless substantially amended. They would this week table amendments before Committee Stage that would build on the Lords amendments which were not passed.

Those amendments seemed from the debate yesterday likely to be that the tariff should be set not by ministers but by the Judicial College; that the length of affected whiplash injuries should be reduced from 24 months to 12 months; that the SCT rise should be limited to £1,500 and that parliament should control this power to increase it; that claimants injured when driving at work should be excluded, and in relation to Part 2 of the Bill that something more was  needed to safeguard the position of claimants so that they would get 100% of their compensation though no detail was given of how this would be achieved in practice.

Other Conservative MPs

It was interesting to see whether there were any Tory MPs who seemed unlikely to support the government: in fact the government are likely to have been reassured.

Alberto Costa, former member of the Justice Committee and government critic on this issue said that he now felt able to support the Bill based on the words from ministers that insurers would be held to account on the passing on of savings and that that principle would be turned into words which could be approved.

Bob Neill, chair of the JC saw much that was good in the Bill, and seemed to be moving to a position where despite the committee's earlier critical report he might eventually be in the government lobby.

Chris Philp referred to an understanding that the Department for Digital, Culture, Media and Sport might be introducing a general ban on cold calling in this area. He thought that government should also look to widen the referral fee ban so as to include ABSs where an insurance company effectively owned a stake in a CMC or a claimant law firm.

Labour MPs

Perhaps the contribution of Jo Stevens, like Mr Burgon with Thompsons links, summarises the position. She picked up the use of widespread use of assumptions by government in justifying its reform, rather than, as she saw it, satisfying the need for evidence.

Ms Stevens saw the reforms as creating an environment into which CMCs would move, "offering poor legal advice on the cheap, maximising their profits on the back of others' misery". She thought the Bill "is a gift to an already greedy insurance industry that needs to be reined in".

Ellie Reeves, member of the Justice Committee referred to the reforms deterring around 350,000 people from making a claim, but did not set out any detail as to how this number, which might be thought rather surprising, had been calculated.

Next steps

The Bill is one step further towards becoming law, though where Labour abstained effectively keeping its powder dry, this was in truth only a low barrier which was overcome yesterday. The more substantial challenges lie ahead in Committee and then at Third Reading. The make-up of the committee is awaited, as are the proposed amendments announced by government and those expected after yesterday's debate from Labour


For more information please contact Simon Denyer, Strategic Legal Development Consultant DD 0161 604 1551 Simon.denyer@dwf.law

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.