Civil Liability Bill [Lords]

Jack Brereton Excerpts

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

[Jack Brereton (Stoke-on-Trent South) (Con)]

It is a pleasure to be able to speak in this debate on the Second Reading of the Civil Liability Bill, which brings forward changes that are of great importance to the insurance industry. I am pleased to hear that there has been significant engagement between industry and Government over this essential legislation. Ageas Insurance, for example, is one of the largest providers in the UK, employing more than 400 people in my constituency, and it has communicated to me its enthusiastic support for these changes, shared by the vast majority of the public.

These measures will help to reduce motor insurance premiums for insurance customers by adjusting how the personal injury discount rate is set. Alongside this, the introduction of a new tariff will specifically target exaggerated and fraudulent whiplash claims that have driven up insurance premiums for hard-working households in places such as Stoke-on-Trent. A new fixed compensation level for whiplash injury will be created, putting provisions in place for the court to uplift the compensation available in exceptional circumstances, compared with a final compensation figure being negotiated by the parties involved, as is currently the case.

The compensation culture that has been created, with huge levels of unjustified claims for things like whiplash, saw premiums rise at the fastest rate ever last year. Increases of about 10% a year are totally unmanageable and unaffordable for motorists. These changes must be brought about to reduce the price all motorists are having to pay to compensate unreasonably high levels of claims. Clearly, it is important that these savings are passed on to consumers. I am pleased to hear that the ABI, which represents 93% of the motor insurance market, has written to the Lord Chancellor emphasising its commitment to this. The Government are now working with the industry on a way that this might be evidenced through reporting of savings passed on to consumers—the people who should benefit most from this legislation.

These changes are not about hampering genuine claims; they are about reaching a balance between the costs on motorists and appropriately compensating those who need to make a claim, ensuring that when someone makes a claim for whiplash injuries, it is backed up by a form of medical evidence and is proportionate to the injury suffered. It will also ensure that those who have suffered life-changing injuries continue to receive 100% compensation—a key principle of the legislation.

In the past decade, personal injury claims have risen by 70% while vehicles have become safer and road accidents have fallen by 31%. The number of road accident claims is, remarkably, on an upward trajectory, despite there being fewer injuries. We have even seen people attempting to circumvent the law and take advantage of loopholes to make unreasonable and fraudulent claims. Clearly, the current balance is not right and is unfairly penalising ordinary motorists who must pay the price of over-inflated premiums. This is especially important for younger drivers, such as me, who currently pay double the average. It is predicted by insurers that, without such reform, motor premiums could continue to rise at a rate of about 10% annually. The Government argue that the whiplash reforms in the Bill will deliver around £1.1 billion of consumer savings per year and could lead to motorists’ insurance premiums falling by an average of £35 a year.

As we have heard, the changes proposed are not limited to the motor insurance industry. The adjustment of the personal injury discount rate will, importantly, also impact on compensation of clinical negligence. As we know, our NHS continues to battle with increasing costs, and a significant growing cost is compensation, increasing at around 13.5% each year. In some cases, that is putting undue pressure on NHS budgets, with money designated for health services not being able to be spent on treating patients. Many within the health service have been calling for the creation of a sustainable platform where the level of compensation is more effectively balanced against the ability of the public purse and taxpayers to pay. We have seen increasing expenditure on clinical negligence compensation, and I hope that this legislation will help to limit those costs to a much more manageable level.

The Bill will mean reduced costs for motorists, ending the mounting and unaffordable increases in inflated insurance premiums, limiting the claimant culture that has seen unreasonable and exaggerated claims grow significantly in recent years, ensuring that there is a fair balance between claimants and consumers and allowing my constituents to keep more of their hard-earned money.

Civil Liability Bill [ Lords ] (First sitting)

Jack Brereton Excerpts

Committee Debate: 1st sitting: House of Commons
Tuesday 11th September 2018 Public Bill Committees

[Rory Stewart]

Thank you very much, Mr Stringer. Those two arguments were based on the question of frequency of travel and probability of an accident. Again, the key point in any form of injury claim is the nature of the injury and the liability of the third party that caused it, not the reason someone is in a car. It would be difficult to argue that somebody who travels in the course of their employment is necessarily travelling more frequently than somebody who is not. Somebody in a rural area might, for example, be commuting 5 miles to work in the morning and 5 miles back in the evening. A farmer in my constituency could be travelling between one field and another. There is no necessary reason to feel that they would be travelling more frequently than, for example, a parent taking their child to school in exactly the same area.

Arguments based on frequency or probability of impact should not be relevant. A more fundamental reason is that, in the end, the law is about the injury and the obligation that the third party who caused the injury owes to the injured person, regardless of how frequently that individual is in a car or why they are in a car in the first place. To be blunt, they could simply have gone to the car to get something from it, and could not be driving anywhere, and be struck and suffer whiplash. They would be entitled to exactly the same compensation as an individual driving that car.

[Jack Brereton (Stoke-on-Trent South) (Con)]

Does the Minister agree that the numbers applicable to amendment 9 would be negligible because most of the claims would be against a third party, not the employer?

[Rory Stewart]

Yes, I agree, but the key point is the injury, not why someone is in the car. This is a distinction without a difference.

Civil Liability Bill [Lords]

Jack Brereton Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 23rd October 2018 Commons Chamber

[Jack Brereton (Stoke-on-Trent South) (Con)]

It is a pleasure to follow my hon. Friend the Member for Cheltenham (Alex Chalk) and to speak in the debate, to oppose amendment 2, tabled by those on the Labour Front Bench. I will add to the remarks that I made on Second Reading and in the Public Bill Committee.

This is a very important piece of legislation for the insurance industry and, more importantly, for customers of the insurance industry—our constituents up and down the country—who will benefit from it. As I found in my Westminster Hall debate on road safety last week, which I was pleased to secure, there is great interest from Members right across the House in matters relating to traffic accidents and the causes and mitigation of crashes. It is not a surprise to me that this legislation regarding appropriate compensation for certain collisions has attracted a great deal of interest and scrutiny.

Our debate in Westminster Hall attracted a range of thoughtful and personal contributions about specific cases in Members’ constituencies. That is relevant to this amendment, because many Members raised the importance of addressing this not just through legislation but, importantly, through action on the entire road network. I was pleased to see the report by the Parliamentary Advisory Council for Transport Safety, in association with Ageas Insurance, which looks at a systemic approach to improving road safety, so that we can reduce the number of whiplash claims and, most importantly, the number of people seriously injured or killed on our road network.

I am grateful to the Minister for the clarity that he brought to aspects of the Bill in Committee. Although I thought the Committee was dealt with very efficiently and we got through it pretty quickly, we had a great number of interesting contributions from Members across the Committee. I am sure the Minister’s remarks will be similarly informative and comprehensive today.

I want to move on to safer vehicles, particularly in relation to whiplash. One notable feature of any debate on road safety and traffic collisions is the focus on how much safer our cars, vans and lorries are today than they were only a decade ago. They are safer by design, and the advances in building motor vehicles that cause much fewer more serious injuries on impact are hugely welcome. Indeed, the number of accidents has fallen by almost a third since 2005.

As the Minister noted in Committee, the percentage of cars with safety features specifically designed to reduce whiplash has increased from only 15% in 2005 to nearly 85% now—that is to say, the position is completely reversed. Whereas only 15% of cars used to have anti-whiplash safety features, now only 15% do not have them. That is still too high a percentage, but vast progress has been made. Despite the 30% reduction in road traffic accidents, the number of whiplash claims has increased remarkably, by 40%. Something does not add up, and the Bill seeks to address concerns that certain claims are either exaggerated or unfounded, forcing up insurance premiums at an alarming rate.

I have something of an interest to declare. As I said on Second Reading, as a young driver I will be particularly advantaged by this legislation. I have been hit by higher insurance rates, which are adding significant costs for people of my generation and for our constituents right across the country. I am reassured that there has been meaningful engagement with the insurance industry by the Government throughout the process of the Bill, with both Government and industry working to get the legislation right for consumers and focusing on how we can ensure that insurance premiums do come down.

As I have said before, Ageas Insurance, which is one of the largest insurance providers in the UK, employs more than 400 people in my constituency. It has very much given me the assurance that it absolutely persists in its support for the changes proposed, which will entirely benefit its policy holders and our constituents. Those policy holders have faced massive increases in bills, but they should now at last see some respite and reductions.

The insurance industry’s support for the legislation is shared by the vast majority of the public. This is not just about the insurance industry pushing an issue; it is about the majority of the public pushing for what they believe is the right thing to do. We are fair-minded people in this country and, particularly in Stoke-on-Trent, we are not comfortable with the idea of a compensation culture. While resolutely recognising that, where there is clear medical evidence, liability must of course mean consequences for those at fault, that should not apply to those who seek to abuse the system.

What will the Bill do? It will reduce insurance premiums for hard-pressed motorists by adjusting how the personal injury discount rate is set. It is not about stopping those who genuinely deserve compensation from getting the settlement they justly deserve. It is of course a matter of justice that we have a system of rules under which everyone plays by those rules, without allowing them to play the system.

It is very welcome that the Government are introducing a new tariff specifically to target the exaggerated and fraudulent whiplash claims that have driven up insurance premiums. The creation of a new fixed compensation level for whiplash injuries is exactly the right thing to do to address the general and obvious anomaly that the number of accidents is going down but the number of claims for whiplash is going up. Equally, it is the right thing to do to ensure that there are provisions to increase compensation in exceptional circumstances. That stands in stark contrast with the current situation, where financial compensation figures are negotiated by the force of will and expertise in the opaque language or legalese of the interested parties.

I stress that these changes are not about denying genuine claims, but about discouraging speculative or exaggerated claims and claims with no just foundation. Such claims have the unjust consequence of forcing up insurance premiums to pay claims-chasing lawyers. I am glad that the Government have been so clear in attempting to get the balance right. As the Minister said in Committee, the Lord Chief Justice should be consulted on the levels of tariffs, as well as on the percentage uplift for judicial discretion. It is right that this should be done in an accountable, responsible, transparent and predictable fashion. I am sure the Lord Chancellor will be in no doubt about the feeling of this House that that should be done. He is accountable to this House, of course, and it should be reassuring to Members that his Ministry has modelled its approach to setting the tariff on that used in other countries, such as France and Italy.

It should be remembered that the bone of contention is not damages paid out for serious, long-lasting cases of whiplash but the anomalous prevalence of minor claims. The Bill addresses that by ensuring that when someone makes a claim for whiplash injuries, it is backed up by medical evidence and the damages are proportionate to the injury suffered. It will also ensure that those who have suffered life-changing injuries continue to receive 100% compensation—that is a key principle of the Bill.

Clearly the current balance is not right, with ordinary motorists being unfairly penalised through needlessly over-inflated premiums. That does not seem the best value for taxpayers’ money. Without reform, motor premiums could continue to rise by about 10% a year, which is shockingly high and unsustainable for working families and, especially, younger motorists. The Government argue that the whiplash reforms in the Bill will restore a sense of balance to the insurance and claims system, delivering about £1.1 billion of consumer savings every year. That could mean motorists’ insurance premiums falling by an average of £35 a year, with the high level of competition that is currently prevalent in the industry ensuring that it is the customers—our constituents—who benefit by far the most. This cannot and will not, of course, be a straight switch from a money grab by lawyers to a money grab by insurers.

I want to go through some of the key things that the Bill will achieve in this area. About 650,000 road traffic accident-related personal injury claims were made in 2017-18—nearly 200,000 more than in 2005-06. The Government estimate that about 85% of them were for whiplash-related injuries. Those figures remain high despite a reduction in the number of road traffic accidents reported to the police and improved vehicle safety. The continuing high number and cost of claims increases the cost of motor insurance premiums to ordinary customers and consumers, which was why, as has been said today, the 2017 manifesto included a commitment to reduce insurance costs for ordinary motorists by tackling fraudulent and exaggerated whiplash claims. That is a key commitment for the Conservative Government.

The introduction of a tariff will both simplify the process for genuinely injured whiplash claimants and ensure that they receive proportionate compensation. In addition to a tariff payment, all claimants will continue to receive special damages covering compensation for any actual financial losses suffered as a result of their accident. The new measures will reduce and control the cost of whiplash claims and disincentivise unmeritorious claims. A tariff system is consistent with other schemes, such as the criminal injuries compensation scheme, which other countries right across the world use.

Having introduced a tariff system, it is essential that we provide that the Lord Chancellor must regularly review the level of the tariff, as clause 4 provides for. However, the Government recognise that there may be exceptional circumstances in which higher levels of compensation are needed, and I very much welcome that. For that reason, clause 4 also allows a judge to determine a higher level of damages. It is right that that remains part of the Bill.