Motor

The Automated Vehicles Bill will face significant challenges in becoming law before the conclusion of the current parliament. Adopting a number of the Law Commission’s recommendations, the draft legislation focuses on a safety framework, clear legal liability, data sharing and security, and responsible marketing. It also accommodates the divergence in regulation as between private cars and automated passenger service vehicles. There will need to be substantial stakeholder involvement on multiple points before secondary legislation can be finalised. The Automated and Electric Vehicles Act 2018, a relatively narrow piece of legislation forming part of the rolling programme of regulation for AVs, concluded its parliamentary journey in around 9 months. The proposed Automated Vehicles Bill will deal with many of the fundamental issues necessary for the effective deployment of automated vehicle technology. If there is a general election in May 2024, then the Bill is unlikely to pass. A later election would allow more parliamentary time, but would still not guarantee the Bill’s passage onto the statute books. In addition, a Labour government may not prioritise automated vehicles in its initial transport agenda.

Third party property damage costs in motor claims will continue to increase, with a corresponding effect on motor insurance premiums. With added costs related to advanced driver assistance systems and sensor calibration, as well as increases to the Auto Body Professionals’ labour rate and additional charges like the new-for-2023 energy cost supplement, motor premiums hit a record high in 2023. Insurers are also facing significant claims relating to electric vehicles, with higher repair costs and a shortage of trained repairers. Despite a reduction in general inflation, we expect that the continuing increased repair and vehicle costs will keep motor premiums high.

In 2024 there will be, at last, clarity on how claims for general damages should be valued in motor injury claims where there is both a tariff whiplash and non-tariff injury. These injuries have become known as ‘mixed injuries’ and the method for valuing them has been contentious. The Supreme Court will determine definitively the correct construction of Part 1 of the Civil Liability Act 2018, giving parties the necessary clarity as to how to approach settlement. The split Court of Appeal decision did not provide the clarity needed.

Inflationary pressures will lead to an increase in the guideline figures for injury in the 17th Edition of the Judicial College Guidelines expected in March 2024. Any changes may impact the track to which cases are allocated. The whiplash tariff also established in the 2021 regulations must also be reviewed by May 2024, in line with the three year anniversary of the Civil Liability Act coming into force. Any increase will serve to dissipate the intended benefits of the reforms and should be accompanied by a corresponding increase in the small claims limit, to account for inflationary pressures on general damages.

Mandated use of mediation in low value, fixed sum claims will require parties to re-think their approach to pre-action processes and disclosure. This will be especially prevalent in areas such as alternative vehicle hire claims for a specified sum, where claims are often document and evidence heavy. As yet, there is no specific date for the implementation of the Ministry of Justice’s intention to mandate the use of the Small Claims Mediation Service on specified claims post-filing of a Directions Questionnaire. We expect this will occur in 2024. The intention is to help reduce backlogs and free up court lists to enable judges to hear more complex cases.

A cross-jurisdictional approach will help to inform whether a single or dual personal injury discount rate (PIDR) should be used across the UK jurisdictions. The PIDR is under review in all three UK jurisdictions during 2024. We are likely to see a further call for evidence before the review commences. The panel of experts appointed will be advising the Lord Chancellor on issues including whether there should be a single or dual rate, and what form a dual rate should take. The review must commence by 15 July 2024 and be completed by 10 January 2025. The review process for Scotland and Northern Ireland is different. If changes are to be made to the process, methodology for calculating or structure of the rate, those changes need to be in place before the Government Actuary’s Department starts its review by 1 July.

A combination of market forces and the reform agenda will drive a continued focus on digital claims solutions. The recent establishment of a new Online Procedure Rules Committee, coupled with the Civil Justice Council’s recommendations to mandate and regulate pre-action processes and behaviours will demand greater use of technology to help front load claims investigations and drive process efficiencies.

The proposal to ban cold calling for consumer financial services and products has the potential to significantly impact the motor claims market. The response to the HM Treasury consultation is expected during 2024. A ban would have the potential to impact both insurers and those providing claimant-related services. The intention, as stated in the consultation, is that the products and services intended to fall into scope would include credit and debt, including individual voluntary arrangements. Given the non-exclusive nature of the examples and the potentially extremely wide ambit of “credit and debt” services (in particular, going well beyond just those services that are regulated by the Financial Conduct Authority), the impact of any ban could be wide-ranging.

The next year will bring clarity to submissions being deployed by claimant representatives regarding the application of s57 Criminal Justice and Courts Act to property-related losses where they are associated with a personal injury claim. The issue needs to be tested on appeal to secure a binding decision on the interpretation of s57 in these circumstances. Finding the right case is important: our next trial of interest is due to commence in January 2024.