Personal Injury Brief market insights – June 2019
A summary of key developments including the Law Commission’s response to the AV consultation, government plans to regulate the fourth industrial revolution, the extension of the fixed recoverable cost regime, an update on the discount rate in Scotland, insurer reporting provisions and an awaited appeal to decide the extent of an employers’ liability for their employees actions.
Law Commission publish response to automated vehicles consultation
On 19 June 2019, the Law Commission (LC) published their response to the automated vehicles (AV) preliminary consultation. The LC are conducting a three-year review to prepare driving laws for self-driving vehicles.
The first consultation considered issues of safety assurance and civil and criminal liability. 178 responses (including Kennedys’) were received and the results echo the importance of:
- Manufacturers working collaboratively with government and insurers on data management in the new driverless vehicles environment.
- Government encouraging manufacturers to create an industry-wide data bank to demonstrate what impact the technology is having.
- An ongoing government-led public awareness campaign around the perceived benefits of the new technology, only by understanding the barriers will AV technology be brought to our roads safely.
- A clear – and agile – liability framework to proactively address questions of responsibility for driverless cars involved in an accident.
Contacts: Rachel Moore and Deborah Newberry
Related item: Kennedys tells government it must get people talking on autonomous vehicles
Government publishes white paper on regulation for the fourth industrial revolution
On 11 June 2019, the government published a white paper on their proposed approach to regulation that supports innovation while protecting citizens and the environment. This will inadvertently impact the personal injury market as innovative developments alter how we live and work.
Key plans include:
- Establishing a Regulatory Horizons Council to identify the implications of technological innovation and advise the government on regulatory reform needed to support its rapid and safe introduction.
- Pilot an innovation test so that the impact of legislation on innovation is considered
- Examine the case for extending the Regulators’ Pioneer Fund to local authorities to help them support testing and trialling of innovations in their area.
- Consult on a digital Regulation Navigator for businesses to help them find their way through the regulatory landscape.
- Establish a partnership with the World Economic Forum Centre for the Fourth Industrial Revolution in San Francisco to develop regulatory approaches for new technology.
Contacts: Karim Derrick and Richard West
Related item: Fourth industrial revolution – asbestos round two?
Consultation to extend fixed recoverable costs closes
On 28 March 2019, the government launched its consultation on the extension of fixed recoverable costs in cases worth up to £100,000. No longer limited to personal injury cases or to lower value claims, this shift will have a significant impact upon civil litigation and how cases are managed. The consultation into this extension sought views on a number of recommendations made by Sir Rupert Jackson in his ‘Review of Civil Litigation Costs: Supplemental Report Fixed Recoverable Costs’ published in July 2017, with the government aiming to take forward most of his recommendations.
The consultation closed on 6 June and the government is aiming to provide a response by September/October 2019. However, given the current landscape and the extent of the consultation, that may be wishful thinking.
New discount rate in Scotland expected by October 2019
The Scottish Government has announced that the Damages (Investment Returns and Periodical Payments) (Scotland) Act 2019 will come into force on 1 July 2019, triggering the UK Government Actuary's Department (GAD) to start work assessing a new Scottish rate, which we estimate will be set at –0.25%
The GAD must report to Scottish Ministers with its recommendation for the new rate by 28 September 2019. Once the recommendation is submitted, Scottish Ministers must lay the report before Scottish Parliament as soon as practicable. The new rate will come into force the day after the report is laid and we anticipate that Scotland will have a new discount rate by early October 2019.
The part of the Act that relates to PPOs will not come in to force until new Rules of Court are approved by the Scottish Civil Justice Council. There is currently no anticipated date for this.
Contacts: Peter Demick and Rory Jackson
Related item: The new discount rate in Scotland unlikely to be positive
Insurer report on savings provision
The Civil Liability Act 2018, which received Royal Assent on 20 December 2018, imposes a new statutory requirement on insurers to provide information to the Financial Conduct Authority about claims costs and premium prices. It is proposed that information should be gathered for each of the three years of the reporting period, to be provided in one return, by 1 November 2023. Insurers will be required to report on what they might have expected their costs to have been, without the Act.
A consultation published by HM Treasury on 21 March 2019 invited comments on the suggested approach and the draft regulations, which set out the specific information required and the expected methods of calculating this information. The consultation closed on 3 May 2019 and we await government response
Contact: Mark Burton
Related item: Civil justice reforms - a game of two halves
Third time lucky?
The UK Supreme Court has granted supermarket chain Morrisons permission to appeal against a landmark UK Court of Appeal ruling that found it vicariously liable for a data breach by a former employee.
The Court of Appeal acknowledged that data breaches caused by individuals acting in the course of their employment may lead to a large number of claims against companies for “potentially ruinous amounts” but that the solution is to insure against such catastrophes.
No date has been given for the appeal hearing.
Contact: Greg Woods
Related item: Court of Appeal upholds vicarious liability claim in data breach class action