January 13, 2020

Motor claims - 2019 in review

The Civil Liability Act moved the issue of whiplash claims reform in England and Wales into the fast lane in 2018. The steps needed to implement these reforms have continued their own journey at pace during the last year, albeit not without bumps in the road.

The key operational elements of the reforms will see an increase in the small claims track limit for road traffic related claims to £5,000 and the introduction of a new portal. As of yet, the necessary changes to the Civil Procedure Rules increasing the small claims track limit and the introduction of a formal Pre-Action Protocol setting out the rules of the new portal have yet to be completed.

The portal is designed to handle any road traffic related claim where the personal injury is valued at less than £5,000 and the overall value of the claim is less than £10,000. Whilst the Ministry of Justice ("MOJ") and the Motor Insurers Bureau ("MIB") have issued assurances that the portal will be ready to go live in April 2020 as planned, many questions remain. Clarity is still sought on the handling of credit hire claims, the independent liability evaluation available to unrepresented claimants and issues around the quantification of additional 'minor injuries'.

On a constructive note, clarification has been provided on the handling of whiplash claims brought by children and protected parties, with the Government confirming that their claims will not proceed through the new portal, remaining exempt from the small claims track increase. However, subsequent confirmation that the whiplash tariffs will apply has led to concerns that those whose tariff claims below the existing small claims track of £1,000 will struggle to find representation to deal with their claims.

Another key provision of the Civil Liability Act is the prohibition of pre-medical settlement offers, and against this background, the Ministry of Justice completed a consultation into the future of small claims medical reporting in RTA related claims, publishing their conclusions in September.

The Government concluded that MedCo should be extended to cover initial medical reports for all RTA related personal injury claims under £5,000, those reports being provided by GPs and Accident and Emergency (A&E) consultants only. This effectively confirmed MedCo's integration into the new portal. These experts and their medical reporting organisations will be subject to new qualifying criteria and standard service level agreements to protected unrepresented claimants in the new portal.

In light of the extension of MedCo's responsibility into the new portal, MedCo will be subject to increased scrutiny. A compliance audit of the medical reporting organisations within the MedCo system early this year found only 3% of MROs received a green rating of whole or substantial compliance. There is work to do.

Likewise, in order to be implemented in April 2020, the whiplash reforms require all the constituent parts to be fully functioning. Not unreasonably, given the number of issues to be addressed, there are concerns that the brakes might be applied to the reforms. However, the MOJ and the MIB have remained steadfast in their statements that the date of implementation remains April 2020.

Beyond the entrance to the new portal, this year saw the confirmation of new discount rates in England and Wales, Scotland and Jersey. Jersey introduced a two tier discount rate, with England and Wales setting a -0.25% rate and Scotland a -0.75% rate. Insurers in England and Wales had previously been hopeful for a positive discount rate based on previous comments by the Government. The meagre increase was, unsurprisingly, negatively received. The retention of a -0.75% rate in Scotland also favoured pursuers greatly, with the decision likely to adversely affect the insurance premiums of Scottish policyholders compared to the rest of the UK.

The commencement order introducing Qualified One Way Cost Shifting into Scotland has yet to be issued pending clarification of when QOCS protection will operate from and amendments to the Court Rules.

On further issues with UK wide application, the potential liabilities of the MIB were widened following the Court of Appeal's decision in MIB v Lewis, effectively requiring the MIB to meet claims involving an uninsured vehicle on private land. The MIB was considered an emanation of the UK state and Article 3 of the Motor Insurance Directive ("MID") applied. This gave the Claimant a right to be compensated, irrespective of whether the vehicle used was on private land.

Whilst this decision demonstrated a lack of domestic compliance with existing provisions of the Motor Insurance Directive (MID), the Government made moves to amend section 152(2) of the Road Traffic Act this year. It was previously conceded in the matter of Roadpeace v Secretary of State for Transport that using s152(2) to avoid a policy to defeat a third party claim was incompatible with the MID.

From a European perspective, moves to amend the MID continued, with suggestions for an amended Directive proposing that the definition of "use of a vehicle in traffic" should include public and private roadways, and also private terrain accessible by the general public.

In a rare positive for insurers, the Supreme Court ruled that a claimant is not entitled to claim against an unknown defendant in Cameron v Liverpool Victoria. The outstanding appeal in the Supreme Court had resulted in a number of stayed claims, subsequently discontinued following the judgment.

After the efforts of 2018 to legislate for the introduction of autonomous vehicles to the roads within the Automated and Electrics Vehicles Act, the focus has switched from the Parliamentary benches to the Law Commission. The Law Commissions of England, Wales and Scotland have continued their far reaching review of the legal framework for automated vehicles, publishing their interim findings in Consultation Paper 1 on safety assurance and legal liability in June.

The second part of the consultation is ongoing and considers the use of self-driving vehicles to provide journeys to users who are purely passengers, in circumstances where there is no person in the vehicle with legal responsibility for its safety.

On the roads, the Driven programme recently demonstrated the use of an autonomous fleet in a complex urban environment in east London, yet until fully autonomous vehicles take to the roads, there will be liability decisions for the Courts to make following road traffic collisions. To that end, there have also been some interesting decisions this year regarding the apportionment of liability, both in favour of the claimant, and in favour of the defendant. The Courts have also considered the standard of the reasonable driver when fearing for his or her safety.