Criminal Justice and Courts Bill

Lord Hunt of Wirral Excerpts

Wednesday 22nd October 2014 Lords Chamber

Moved by

[Lord Hunt of Wirral]

128: Clause 49, page 48, line 11, after “claim” insert “which consists of or includes a claim”

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[Lord Hunt of Wirral (Con)]

My Lords, I am moved to move this amendment, inserting the words,

“which consists of or includes a claim”,

so that Clause 49 would read,

“proceedings on a claim which consists of or includes a claim for damages in respect of personal injury”,

because immediately after Committee, when we had a very good debate on what is now Clause 49, a number of people on all sides of the House expressed to me concern that quite often a claim for personal injury is accompanied by another claim, such as a claim for credit hire, that is often found to be bogus, made up, exaggerated or just plucked out of the air. Also, so far as whiplash injuries were concerned, a number of colleagues were concerned about the allegation that we had become the whiplash capital of the world, and wanted to create a deterrent to someone who had damaged their vehicle through a shunt or an accident, had recovered the repairs to their vehicle but then, as a result of a text message or some other marketing effort, decided to bring a claim for whiplash. It was put to me that thousands of such claims were being made that really were promoted by claims management companies without any substantial reason for the claim being made in the first place.

So I have tried here to extend the remit of the sanction for fundamental dishonesty to cover not only injury claims but claims presented where the injury itself is used as a means by which a dishonest claim—for example, a claim for credit hire—is made. I do this by aligning the wording in Clause 49 with that in, for example, Rule 44.13 of the Civil Procedure Rules 1998, which spells out the scope and intention of qualified one-way cost shifting. I hope that noble Lords will understand that I do not really need to repeat in detail the Civil Procedure Rules; suffice to say that I am aligning the amendment in accordance with that rule. Its wording is also aligned with Section 11 of the Limitation Act 1980. Again, for the record, I say that it is Section 11.

The amendment would capture vehicle repair costs paid before a dishonest injury claim was presented, but I believe that its greater impact would be in the arena of credit hire claims where genuine injury claims are frequently used as a means to present a dishonest, either fabricated or exaggerated, claim for hire. I could cite a whole series of relevant cases but I am not sure that noble Lords wish me to go into too much detail. There are a number of them where claims management companies, one in particular, presented 36 claims, 35 of which subsequently proved to be completely fabricated and, when challenged, were withdrawn. One claim was pursued but dismissed at first instance. As a result of that dismissal there was an appeal to the Court of Appeal, which said, “I think there should be a retrial”. The retrial began but, after evidence-in-chief, the claim was suddenly withdrawn so no claim for damages was maintained. Of course one can only speculate about why it was withdrawn. I refer to the case of Basharat Hussain v Adil Hussain v AVIVA UK Insurance Ltd, a reported case that is an example of exactly what I am hoping this amendment will stop—fabricated claims associated with an injury claim being made. I am sure that there would be all sorts of problems, but I hope that my noble friend will agree at least to give this a little further thought so that we can ensure that Section 49 is effective.

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[Lord Hunt of Wirral]

My Lords, I first remind the House of my interests as declared in the register. Secondly, I thank my noble friend the Minister for his very careful consideration of all the points which have been raised, and for his recognition that these are genuine attempts to eradicate a practice which has arisen and which must be stopped. I will of course very carefully consider all the points he has made, and in the mean time I beg leave to withdraw my amendment.

Amendment 128 withdrawn.

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[Lord Faulks]

My Lords, I am grateful once again to my noble friend Lord Hunt of Wirral for raising this issue in Committee. During that debate, I indicated that we would consider his amendment further. There has been widespread support for the ban on offering inducements to bring personal injury claims in Clauses 50 to 52, but I am concerned to make this as effective as possible. Having reflected over the summer—I have been given a great deal on which to reflect over the course of the Bill—I agree with my noble friend that we should seek to prevent regulated persons avoiding the ban by offering an inducement through third parties.

The noble Lord’s amendment was prompted by a concern that it is now increasingly common for solicitors to operate as part of larger groups of companies, or to have subsidiary or linked companies offering services alongside them. Those subsidiary or linked companies are not always regulated, and it would be relatively easy for, say, a solicitor simply to route an inducement through an unregulated company, thus avoiding the ban.

For the avoidance of doubt, I add that we do not wish to regulate third parties, only to prevent regulated persons from avoiding the ban by offering an inducement via an unregulated subsidiary or a linked business or individual. I believe that this amendment is a proportionate means of making the necessary ban on inducements more effective, and I beg to move.

[Lord Hunt of Wirral]

I am very grateful to my noble friend the Minister.

[Lord Beecham]

I am afraid I cannot beat the brevity of that. I would like a little guidance from the Minister about the nature of the regulation. Can he give any indication of how effective whatever the regulatory body is—I confess that I do not know which it is—in overseeing this practice? I am entirely with the Government in wishing to ensure that such practices are limited as much as possible, for precisely the reasons that were mentioned by the noble Lord, Lord Hunt, and with which we all concur: the promulgation of false claims, which is wrong in itself and, of course, a drain on the economy generally. I am not clear what the regulatory system currently is, or how effective it is. While supporting the Government’s intentions in the amendment, it would be helpful to have an impression of that.