Civil Liability Bill [Lords]

Debate between Chris Philp and Baroness Winterton of Doncaster

2nd reading: House of Commons & Money resolution: House of Commons & Programme motion: House of Commons
Tuesday 4th September 2018 Commons Chamber

[Ruth George]

My intervention is a question to you, asking how you think the claims management company got hold of your details to be able to phone you and your wife about your accident. Do you agree that your details must have been passed on by insurance companies, who then complain about these very claims management companies, because that is the only place they could have got your personal details and the accident information from? That is what we should be cutting down on.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. May I just reiterate that the word “you” should be used to address the Chair? My personal details have not been passed on to anybody.

[Chris Philp]

Thank you, Madam Deputy Speaker. The hon. Member for High Peak (Ruth George) might well be correct in her assumption about where the details came from.

A ban on referral fees was introduced a few years ago, but some insurance companies have sought to circumvent it by using what they euphemistically term “alternative business structures”. This is where an insurance company effectively owns an equity stake in a claims management company or a claimant law firm and extracts value in that way. I know that the Minister is very attentive to these matters, and I suggest to him that we should look at widening that ban on referral fees to include a ban on so-called alternative business structures. We should ban insurance companies from having an equity stake or any other financial interest in claims management companies or in claimant law firms, to make our existing ban on referral fees a little bit more robust. I say that to make the point that not everyone on the Government Benches is batting for the insurance companies.

In terms of public opinion, 58% of the public believe that personal injury lawyers and claims management companies are responsible for creating a compensation culture, and two thirds of the public believe that a compensation culture exists. My hon. Friend the Member for North Warwickshire (Craig Tracey) has described the cost to individual motorists. The cost is being borne by our constituents, many of whom struggle to make ends meet. When 47% of the value of claims is consumed by costs and legal fees, the system is clearly not functioning properly.

I very much welcome the measures in the Bill, particularly the ban on pre-medical examination offers. I was delighted by the Secretary of State’s confirmation that the examinations will be face-to-face examinations. That is an extremely important clarification. As far as I can tell, the only sanction in the Bill against companies making pre-med offers will be a fine levied by the Financial Conduct Authority. I say to the Minister that I hope that those fines will be substantial. The tariff schedule is simple and clear. It is set at about the same level as that of awards made under the current judicial system, so it is not being substantially discounted, but it is simple, transparent and requires less intervention by the judiciary and the justice system, thereby reducing costs. Many European countries, including France, have a similar tariff system. I welcome this simplification and the associated reduction in costs.

The reforms to the personal injury discount rate are long overdue, and I welcome them. If Members are concerned about them, I would just say that periodic payment orders are available to pretty much every claimant if they feel that they would be better served in that way. They would guarantee that every penny due was paid over. I suggest that periodic payment orders are a better mechanism for avoiding the risk of someone being paid a large amount of money on day one and perhaps being given bad financial advice or spending the money on something other than their own care. I suggest that the Government consider making periodic payment orders the default option and that a lump sum award should be made only if a judge decides that there is a good reason not to set up a periodic payment order. I think that PPOs provide better protection for the claimant.

There are one or two important measures that are not in the Bill but are associated with it. I strongly support the increase in the small claims track limit to £5,000 for road traffic accident personal injury claims. The limit for most compensation claims is £10,000, so we might ask why the limit here is only £5,000 when in almost every other sphere it is £10,000. The Government have already made a significant concession by setting the limit at £5,000, rather than at £10,000, as it is for everything else.

I understand that there might be imminent legislation from the Department for Digital, Culture, Media and Sport to introduce a general ban on cold calling in this area. If that is true, it is long overdue and will be very welcome. Claims management companies should not be making these calls at all, and they should be completely prohibited. I have already commented on alternative business structures. I have had personal experience of this; the public are being incited to commit fraud on an industrial scale. There is no reason why the level of claims in the United Kingdom should be so much higher than in other European countries. These are welcome measures, and the sooner they hit the statute book, the better.

Finance (No. 2) Bill

Debate between Chris Philp and Baroness Winterton of Doncaster

3rd reading: House of Commons & Report stage: House of Commons
Wednesday 21st February 2018 Commons Chamber

[Jonathan Reynolds]

I must defend the Leader of the Opposition. The comments that he made to the EEF national manufacturing conference were simply that finance must serve industry and that this country has to find ways to increase lending to businesses, to have more productive outcomes for the economy and to lower regional inequality—all things that were previously said by the former Chancellor of the Exchequer, who now finds work as the editor of the Evening Standard. I do not think that that is unreasonable in any sense. The feedback I have had from that conference is that the reception in the room was very favourable.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I call Chris Philp—on new clause 3.

[Chris Philp]

Well, I am not sure whether I can respond to the hon. Gentleman’s comments while adhering to Madam Deputy Speaker’s gentle guidance, other than to say that I think that the Leader of the Opposition’s remarks went rather further than the hon. Gentleman just suggested.

Perhaps it is time to move on to the measures relating to tax avoidance and evasion, particularly new clause 6. The shadow Chief Secretary made a series of quite serious allegations about the Government’s effectiveness over the past seven years in combating tax avoidance and evasion. I disagree quite strongly with the premise of his points. He suggested that the current Government had been slow to act—indeed, had not acted—in these areas. I gently draw his attention to the fact that in the past eight years since 2010 the Government have taken 75 different measures designed to combat tax evasion and tax avoidance that have raised, cumulatively, £160 billion.