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Legislation watch

November 2019

Motor insurance: amendment of the Motor Insurance Directive. The now infamous decision of the CJEU concerning a Slovenian tractor in Vnuk in September 2014, produced an interpretation of "use of a vehicle", for the purposes of the compulsory motor insurance regime, which was wider than the definition contained within the Road Traffic Act 1988, and thereby set in motion a review of the legislation both in the UK and Europe. In May 2018, the Commission presented proposals to amend the Directive and it came as a surprise when they proposed to adopt the wider definition from Vnuk. In January 2019 the Internal Market and Consumer Protection Committee (IMCO) of the European Parliament voted for amendments that would revise the Commission's proposal on scope, by proposing to restrict compulsory cover to vehicles "in traffic" defined as being on a public or private road, but not in a closed area inaccessible to the public, as well as exclusions for motorsports and for new vehicles such as Segways and electric bikes. In February 2019, the full Parliament approved the IMCO amendments. The new legislative term began on 2 July and on 18 July 2019 IMCO Coordinators agreed to request resumption of work on the basis of the negotiating mandate, as adopted in February. In October the Conference of Presidents agreed to resume the consideration of this work.  Read more on developments from earlier this year and next steps in Amy Jeffs' article MID reform – the journey continues as European Parliament points to pragmatic solution

The Motor Vehicles (Compulsory Insurance) (Miscellaneous Amendments) Regulations 2019. In the meantime, the government has made a new statutory instrument amending the Road Traffic Act 1988 to rectify another inconsistency with the Motor Insurance Directive. Most significantly the proposals will amend s.152 of the RTA so that insurers can no longer rely on having avoided policy after an accident to deny compensation under the RTA to third party victims. The Regulations came into force on 1 November, 2019, meaning that insurers will not be able to avoid their RTA liability where a post-incident declaration is obtained after 1 November, 2019. Read more in our update Changes to Road Traffic Act 1988 and declarations of policy avoidance.

Courts and Tribunals (Online Procedure) Bill. The Courts and Tribunals (Online Procedure) Bill which was introduced to the House of Lords in May 2019 was due to establish a new Online Procedure Rules framework to support the use of online procedures in civil, family or tribunal cases, together with an Online Procedure Rule Committee (OPRC). The Bill failed to complete its passage through Parliament before the end of the session. This means the Bill will make no further progress. A new government would be able to reintroduce this legislation, but the Bill would be required to start from the beginning of the legislative process.

Fatal Accidents Act 1976 (Remedial) Order 2019. In May, the MOJ published a proposed remedial order which provides for the award of bereavement damages under the Fatal Accidents Act 1976 s.1A to be available to a person who has cohabited with the deceased person for a period of at least two years immediately prior to the death. This rectifies an incompatibility with the European Convention on Human Rights 1950 art.14 read with art.8 identified by the Court of Appeal in Smith v Lancashire Teaching Hospitals NHS Foundation Trust (2017). Following its publication the Joint Select Committee on Human Rights sought views on the proposals. In July, the committee published its report welcoming the proposed changes but raising wider concerns with the bereavement damages scheme as a whole and recommending that the government undertakes a consultation with a view to reform. Further developments are awaited in the new Parliamentary session.

Law Commission draft Bill awaiting developments

Insurance contract law reform: draft Insurable Interest Bill. In April 2016 the Law Commission and the Scottish Law Commission published a draft Bill following their review of the issue of Insurable Interest, having previously made proposals for reform in 2008 and 2011. They were asked to return to the issue due to the increased numbers of requests to write policies which include cover for children, cohabitants and to insure ‘key employees’ for substantial amounts. The draft Bill was intended to reflect the proposals set out in the issues paper and the Law Commissions invited comments on the draft Bill by 20 May 2016 with a view to publishing a final draft Bill and report in autumn 2016. The project was then put on hold due to other priorities within the team but in June 2018 the Law Commission published their updated draft legislation. The extended deadline for comments was 31 October 2018. Read more in the Law Commission press release from June 2018.