The Queen’s Speech on 21st June included proposed new legislation in the form of a Civil Liability Bill. The bill will be drafted to address a number of proposed reforms to the legal system of England and Wales, and will include efforts to address the perceived "compensation culture" surrounding motor insurance claims.
Similar to the proposed "whiplash elements" of the (now abandoned) Prison and Courts Bill, the Civil Liability Bill will ban offers to settle claims without the support of medical evidence. It is intended that this measure will ensure that compensation more accurately reflects the extent of the claimant's injury. Despite this measure, the Bill will also introduce a new fixed tariff of compensation for whiplash injuries that last up to 2 years.
The proposal states that the Bill will crack down on "fraudulent" whiplash claims, following years of lobbying of successive Conservative governments by insurance companies to reduce soft tissue injury payouts. Lawyers, rights groups and charities have repeatedly argued that Government's plans are based on bad and non-existent data. Recent research has suggested that cases of actual fraud are very few in number, and that the "compensation culture" is "a myth".
Court reforms also announced
A new Courts Bill will be introduced to reform the courts system in England and Wales. A key element of this modernisation is the establishment of an "online court" to process some civil claims. The online court is designed to operate without lawyers. This ‘Online Solutions Court’ will handle small civil claims, allowing businesses to pursue cases and recover debt more quickly, and without incurring solicitor's legal fees.
In addition to the Civil Liability Bill, the Queen’s Speech also outlined a proposed Patient Safety Bill to improve the way the NHS investigates mistakes and to encourage staff to freely share information. Its purpose will be to ‘embed a culture of learning and safety improvement across the NHS' ensuring serious incidents can be investigated by an independent and impartial body. It expects that this may negate the need for ‘expensive, lawyer-led inquiries’.
However, the Queen's Speech did not address the issue of fixed costs in clinical negligence claims.
The anticipated benefits of the new legislation will be the modernisation of the courts system and a reduction in motor insurance premiums of £35 per year. The £35 figure has dropped from the original proposed saving of £40 per premium, but many lawyers and legal services commentators have expressed skepticism that any such saving would be passed on to the consumer if the reforms go ahead.
The insurance ratings company Fitch has argued insurance premiums will continue to increase despite any benefit to insurers created by the reforms. A recent report by Fitch Ratings argues tthat the profitability of insurance companies in recent years is ‘unsustainable’ and that drivers will find themselves paying more in the long term irrespective of the proposed changes.