The FOIL Digest May/June sponsored by;

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1 The FOIL Digest May/June sponsored by; To access more information on the issues below, please log on to the FOIL website members section or click on If you are not yet a member of FOIL-select, our free service, please send your contact details to Laurence Besemer on laurence.besemer@foil.org.uk You can also see fuller versions of each item in The Voice issue The Motor SFT Roundtable insurers consider the Civil Liability Bill The Motor SFT Roundtable event on the Civil Liability Bill, on 21 June, brought lawyers and insurers together to consider the impact of the amended Bill following Report Stage and the package of reforms that accompany it. The issues considered included the new definition, now part of the Bill; the challenges to the tariff; how claims will be brought in the future; and the operation of the new electronic platform. 2. Scotland sets out Discount Rate proposals The Damages (Investment Returns and Periodical Payments)(Scotland) Bill, introduced in the Scottish parliament on 14 June, sets out how the Scottish government intends to set the discount rate. Previously the rate was a matter for Scottish ministers but under the Bill the Government Actuary will have responsibility for review, applying a complicated formula using a notional mixed portfolio. The Bill will also allow PPOs to be made in Scotland without consent. 3. FCA consults on regulation of CMCs The Financial Claims and Guidance Act received Royal Assent on 10 May, moving responsibility for regulation of CMCs from the MOJ to the FCA from 1 April 2019, and introducing regulation for Scottish CMCs. The FCA has now published a consultation on its proposals on regulation. New standards are proposed to provide consumers with more information on costs; to require CMCs to meet prudential requirements on holding sufficient capital; and to require CMCs to undertake due diligence to improve adherence to data protection and privacy rules. Further consultation is proposed in the autumn on the application of the FCA s Senior Managers and Certification Regime to CMCs. The consultation closes on 3 August.

2 4. CJC kicks off LASPO review The government s long-awaited review of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 commenced with a CJC seminar on 29 June, to facilitate a discussion on the key impacts of Part II of the Act, particularly considering whether the reforms have reduced litigation costs and made those costs more proportionate; what the impact has been on access to justice; and any unintended consequences with what suggestions for addressing any on-going problems. The government s provisional view is that there are no overarching concerns. 5. Court reform a more limited Bill is back on the legislative agenda Some of the provisions previously included in the Prisons and Courts Bill are now back in parliament in a new Courts and Tribunals (Judiciary and Functions of Staff) Bill, which reached Second Reading on 20 June. The Bill is much more limited than the Prisons and Courts Bill and is described by the government as a first step towards court reform. It does not include the provisions allowing for the making of rules for the online court and the creation of an On-line Court Rule Committee contained in the previous Bill focusing instead on the judiciary, including provisions to make more flexible use of judges across the jurisdictions and allow judicial functions to be exercised by authorised court staff. Peers have criticised the provisions as too modest. 6. Scottish proposals to allow recovery of medical costs in industrial disease claims consultation closes. A consultation by Stuart McMillan MSP, on proposals to allow the medical costs of treating claimants for industrial disease to be recovered from insurers, closed on 22 June. The proposals echo similar plans put forward in FOIL s response raised concerns at how the proposals would work in practice, and warned that they could operate to the detriment of claimants. 7. Ian Long, member of the FOIL Clinical Negligence SFT, reports on the NHS conference on Better Resolution of Clinical Disputes On 24 May 2018 Trust Mediation, CEDR, PICARBS and CADR hosted a seminar at Clyde & Co to explore the advantages of ADR in healthcare cases. The invitation-only event saw around 100 delegates from the leading claimant and defendant firms gather with leading figures from the judiciary, to discuss issues in a lively and engaging panel format. Lord Justice Briggs delivered the key-note speech and Mr Justice Francis spoke about the benefits of ADR in court of protection cases. Delegates had an opportunity to consider the different forms of ADR, with a number of speakers arguing that ADR should become the cultural norm. 8. Law Commission publishes draft Bill on insurable interest As part of its long-running insurance law project, the Law Commission has published an amended draft Bill on insurable interest together with a consultation paper. Proposals are put forward in relation to life and life-related insurance. An insurance interest will arise in circumstances of close family relationship, and also if there is a reasonable prospect that the insured will suffer economic loss if the insured event occurs. In circumstances where

3 there is no insurable interest, the Bill will render the insurance void rather than illegal, usually allowing insurance premiums to be returned. 9. European Commission publishes response on Refit Review of the Motor Insurance Directive Following the consultation which concluded last year, in May the European Commission published proposals to amend the current Motor Insurance Directive to implement the decision in Vnuk. The provisions would extend compulsory insurance to a wider range of vehicles used for transport, regardless of where the vehicle is being used. There are indications that EU countries other than the UK have reservations over the proposals. It is not yet clear how the UK government will respond. 10. Case managers consult on accreditation scheme In a joint initiative, the British Association of Brain Injury Case Managers, the Case Management Association UK, and the Vocational Rehabilitation Association have launched a brief survey to gather views on an accreditation scheme for case managers. The proposal under consideration is accreditation via the Professional Standards Agency: feedback is sought on the benefits and purpose of accreditation. 11. Contributions in disease claims government commits to reform of Companies Act 2006 Although the Third Parties (Rights against Insurers) Act 2010 came into effect on 1 August 2016, the Act currently has no application in long-tail asbestos-related claims. Before the Act can apply appropriately, a change is needed to the Companies Act 2006, to enable long -defunct insured companies to be reinstated to the register, to enable insurers to see contributions from other parties. The government has now given a commitment to make that change: the required SI was laid before parliament on 28 June. 12. Package tour operator not liable for sexual assault by hotel employee In the case of X v Kuoni Travel Limited [2018] EWCA Civ 938, Mrs X, whilst on an allinclusive holiday to Sri Lanka sold to her by Kuoni, was raped by an electrician employed by the hotel. She claimed damages from Kuoni, both under the contract for the holiday and under the Package Travel, Package Holidays and Package Tours Regulations On the basis of both the holiday contract and the regulations, in a majority decision, the Court of Appeal has found Kuoni not liable. For more information on the issues below see the Updates section of the website 13. Update: The Whiplash Regulations In preparation for Committee Stage of the Civil Liability Bill in the Lords, the MOJ published the Regulations setting out further details on the definition of whiplash, the tariff, the uplift in damages in exceptional circumstances and the evidence required before an offer of settlement can be made. The Update considers the detail of the regulations as published amended details on the definition and the damages uplift in exceptional circumstances were later included in the Bill at Report Stage. 14. Update: the Justice Select Committee s report on the Small Claims Track limit

4 The Justice Select Committee report criticised the government s proposals on increasing the Small Claims Track limit for personal injury claims, a key element of the package of reforms on low value claims. In examining the proposals to increase the RTA SCT limit to 5,000 and the EL/PL limit to 2,000, the Committee found little to like. It is unconvinced by the rationale for the reforms and, despite hearing details of the government s proposals on an electronic platform to assist unrepresented claimants in bringing a low value claim, believes that the proposals will adversely affect access to justice. The report also raises concerns at the impact of the changes on the courts and on the BTE market and the personal injury claims sector. The Update examines the report in detail. 15. Update: The Catastrophic Claims SFT ADR Roundtable With enhanced court fees, delays in the progress of claims, and the limitations of case and costs management taking the shine off the court process as a means of resolving catastrophic claims, alternatives are emerging in the market encouraging a new approach. Just how good are they, and should they be preferred over the traditional option of issuing proceedings? The FOIL Catastrophic Claims SFT Roundtable event brought together the providers of three of the most well-known ADR options: Peter Freeman from Independent Evaluation; Andrew Ritchie QC from PiCarbs: and Tim Wallis from Trust Mediation, together with members of the SFT and senior insurance professionals, to consider what they had to offer. The event was generously hosted by FOIL sponsor 39 Essex Chambers, with William Norris QC in the Chair. The Update reports on the event in detail. 16. Update: CJC Low value PI group In its Call for Evidence on Gastric Illness Holiday Claims prior to reform, the MOJ asked for wider views on low value claims in general, to tackle the problem of the continuous shifting of high volume claims to fresh ground. A CJC working group has now been established, chaired by Nicola Critchley, from Horwich Farrelly, member of FOIL s National Committee, to examine the issues and consider measures to address them. The Update examines the work of the group and the issues it is considering. 17. Update: the Civil Liability Bill passes in the Lords The Civil Liability Bill completed Report Stage on 12 June and Third Reading on 28 June, at which the Bill was passed in an amended form. The Bill has faced a very significant number of amendments in the Lords. On whiplash, at Report Stage, government amendments moved the definition of claims within the new regime from Regulations to the face of the Bill, with new review procedures now included. Opposition amendments on the tariff and the increase in the Small Claims Track limit were defeated. On the Discount Rate, much of the focus has been on timescale, with peers seeking to reduce the time before a new rate can be put in place. The government has now removed the requirement for an expert panel for the first review, to speed up the process. In final amendments at Third Reading, the review timetable was amended to require the rate to be reviewed within a five year period, rather than three years as previously proposed. The Discount Rate provisions in the Bill will also now come into effect upon Royal Assent, triggering the statutory review timetable from the outset. The Update considers in detail the final stages of the Bill in the Lords.

5 This publication is intended to provide general guidance only. It is not intended to constitute a definitive or complete statement of the law on any subject and may not reflect recent legal developments. This publication does not constitute legal or professional advice (such as would be given by a solicitors firm or barrister in private practice) and is not to be used in providing the same. Whilst efforts have been made to ensure that the information in this publication is accurate, all liability (including liability for negligence) for any loss and or damage howsoever arising from the use of this publication or the guidance contained therein, is excluded to the fullest extent permitted by law.