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Legislation watch

September 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. 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 come 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. On 1 May 2019, the Ministry of Justice announced that the Courts and Tribunals (Online Procedure) Bill had been introduced to the House of Lords. The Bill forms part of the government’s £1 billion court reform programme and will establish a judicially-chaired committee tasked with developing new, simplified rules for online services in civil, family and tribunal proceedings. It appears to be the Bill that was needed to take forward the Briggs recommendations, taking over from part 2 of the Prisons and Courts Bill, which was dropped when parliament was dissolved in 2017. The Bill completed its passage in the House of Lords on 2 July 2019 and raced through the Commons, completing its committee stage there on 23 July. The Bill was ready to move onto the report stage in the Commons when Parliament was prorogued, but following the Supreme Court decision of 24 September and the declaration that the prorogation was null and void the 2017-19 parliamentary session continues. As a result all Bills of the 2017 session which fell because they had not concluded their passage through Parliament at the time of the prorogation remain live. You can keep up to date with progress on the Bill's web page and read more on the early summer stages in the Gazette and Legal Futures.

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. 

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.