Overview

The Motor Insurance Regulation Bill aims to reform the motor insurance market in England and Wales. Key changes include banning referral fees, establishing stricter standards for whiplash claims, updating the pre-action protocol for personal injury claims, and regulating risk pricing for motor insurance.

Description

This bill makes several key changes to motor insurance regulations:

Referral Fees

The bill prohibits the solicitation, offer, or payment of referral fees related to personal injury road traffic claims. These fees, often paid for client referrals, are deemed unlawful and unrecoverable as legal costs. Offences are punishable by fines or imprisonment.

Whiplash Claims

New standards are introduced for whiplash claims. Claimants must provide independent, objective evidence of harm; subjective descriptions alone are insufficient. A rebuttable presumption of no harm exists if the accident involved a speed of 15 mph or less and there are no musculoskeletal injury signs.

Pre-Action Protocol

The bill amends the Civil Procedure Rules 1998, adjusting fixed costs for low-value personal injury claims in road traffic accidents. Specific changes are made to the amounts for different stages of the protocol. Further amendments require parliamentary approval.

Risk Pricing

Insurers are prohibited from using discriminatory risk pricing based on areas smaller than standard English regions or Wales. They can still consider factors such as age, occupation, claims history, and the vehicle's location (for theft risk assessment).

Government Spending

The bill doesn't directly specify government spending figures. However, it could indirectly reduce government spending by potentially lowering the number of fraudulent or exaggerated whiplash claims, which reduces the burden on the court system and public funds associated with these claims. The exact financial impact is difficult to estimate.

Groups Affected

The bill impacts several groups:

• Insurers: Face restrictions on risk pricing and are prohibited from paying referral fees.
• Solicitors and Claimants: Restrictions on referral fees and stricter evidence requirements for whiplash claims will affect their practices and potential payouts.
• Individuals involved in road traffic accidents: Changes to whiplash claim procedures and costs may influence how claims are handled.
• The Judiciary and Court System: The changes to claims processes may reduce workload and costs related to personal injury claims.

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