Enterprise Bill [HL]

Baroness Noakes Excerpts

Wednesday 25th November 2015 Lords Chamber

[Baroness Noakes (Con)]

My Lords, these amendments raise difficult issues. My noble friend Lord Flight overstates his case when he says that the whole of the £60 billion insurance market is at risk of moving abroad because of a late-payment provision in the Bill.

We need to go back to basics. Clauses 20 and 21 are about providing protection for policyholders. They would have been included in the Insurance Act—a Law Commission Bill—which was processed through your Lordships’ House through the special procedure for Law Commission Bills, in which I had the honour to take part. This provision was excluded only at the last minute because of the objections of traders in the London market, who have continued to maintain their objections to these clauses. The most important thing is to have Clauses 20 and 21 in the Bill when it is finally enacted.

I have been looking very carefully at the arguments that have been put forward by those who have been promoting the amendments to which my noble friend Lord Flight attached his name. I certainly did not support the amendments which we debated in Committee —which I said at the time of the debate in Grand Committee. I have looked carefully at the paperwork that has emerged subsequently, including the opinions of Colin Edelman—both the one that came out today and the one that came out recently. It is, of course, not our custom to make the law on the basis of counsel’s opinion, however eminent the lawyers happen to be. At the end of the day, it is a matter for the Government and parliamentary counsel to determine the correct way to express the law.

Having said that, I have some sympathy with the limitation amendment. It replaces a somewhat uncertain provision, which is effectively six years from the date when reasonable payment should be made, to a very clear one of one year. It is fair to say that the Law Commission has said that at the very least it arguably provides more certainty to insurers without materially undermining policyholders’ rights. If that analysis is correct, it seems to me to do no harm to the basic provisions but provides more certainty to the insurance world.

However, I am less convinced by the privilege amendment. I understand what the arguments are based on, but this is a funny Bill in which to be messing about with legal privilege—to single out one particular clause to exempt from the normal provision that when you claim legal privilege you disclose the legal advice on which you are basing your use of bringing that legal advice into play. I am far less convinced that that is the case. The Law Commission is of the view that a reasonable grounds test is an objective test and not a subjective test, as counsel’s opinion asserts. We may have different legal opinions on this; I am just not sure that the case is made.

I suspect that it is unlikely that my noble friend the Minister could accept the amendments at this late stage, given that they were tabled quite late, but I hope that my noble friend might at least be able to take away the limitation clauses for consideration, without commitment, between here and Third Reading. I underline that the most important thing is that Clauses 20 and 21 are retained.