22 January, 2019
Last year was certainly another eventful year for insurers and defendants; and whilst Brexit looks set to be high on the agenda in 2019, we consider what other developments we are likely to see in the year ahead.
Civil Liability Act 2018
At the end of 2018, the much-anticipated Civil Liability Bill finally received Royal Assent becoming the Civil Liability Act 2018. As a result, in 2019 we can finally expect to see a review of the Discount Rate. The Ministry of Justice has already launched a Call for Evidence to help the Lord Chancellor in carrying out the first review of the rate under the new legislation. Pursuant to the Act, the first review must commence within 90 days of Royal Assent. The Lord Chancellor must then determine the new rate within 140 days of the review commencing i.e. on or before August 2019.
The whiplash reforms (including the introduction of the tariff system) contained within the Civil Liability Act will be introduced in April 2020. The government is currently in the process of developing and testing a portal system to facilitate the new measures.
Small Claims Track Limit
We also expect to see preparations for an increase in the small claims track limit. Whilst originally the government suggested that the increase to £5000 for RTA claims and £2000 for all other personal injury claims would take place in April 2019, this has also been postponed to April 2020 at the earliest.
Review of Part 2 of LASPO
In 2018, the government launched a post-implementation review of Part 2 of LASPO relating to the reforms to civil litigation funding and costs. We anticipate that the government's findings will be published shortly.
Fixed Recoverable Costs
In 2017, LJ Jackson published a report containing a recommendation for the extension of fixed recoverable costs. In particular, he advocated an intermediate track for cases between £25,000 to £100,000 and a grid of fixed recoverable costs. In April 2018, Lord Keen made a speech to the Association of Personal Injury Lawyers conference. He commented that in light of Sir Rupert's report, the government is now considering the best way forward. He confirmed that the Government would consult before implementing any changes so stakeholders will have a further opportunity to express their views. We therefore anticipate that a consultation on this issue will be announced soon.
FCA Regulation of CMCs
On 1 April 2019, the Financial Conduct Authority (FCA) will become the regulator of claims management companies. All CMC's must register for claims management 'temporary permission' by 31 March 2019 if the CMC wants to continue trading after 1 April 2019. The 'temporary permission' status allows firms to continue trading using a single CMC permission whilst they go through the application process for FCA authorisation. CMC's will face tougher regulation by the FCA and greater accountability.
Courts are becoming more receptive to the issue of "fundamental dishonesty". In 2018, we have seen a number of favourable decisions where the Courts have used their powers to thwart exaggerated and false claims. With each decision, we are learning more about the principle of "fundamental dishonesty" and defendants have an increasingly effective tool in their armoury to scupper both fraudulent and exaggerated claims. We hope to see these cases continuing to act as a deterrent to fraudulent claimants in 2019.
The Supreme Court heard the case of Poole Borough Council v GN and another UKSC 2018/0012 in July 2018 and a decision is currently awaited. In December 2017, the Court of Appeal found that the Local Authority owed no duty to protect two children from persistent anti-social behaviour and abuse by a neighbouring family on the estate on which they were housed by the Council.
The decision was appealed and the Supreme Court is currently considering whether the case of D v East Berkshire Community NHS Trust  QB 558 is correct and should continue to govern the position of local authorities in respect of their duties to children living in their areas. The Judgment will determine whether, absent a specific assumption of responsibility, a local authority owes a duty of care to protect a child from foreseeable harm caused by third parties. The Judgment is expected shortly.
So regardless of whether Brexit does or doesn't happen, 2019 looks set to be another busy and eventful year for insurers and defendants. We will continue to keep you fully up to date with all the latest news and developments on our website and through our Twitter page @ForbesInsurer