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Enterprise Bill 2015: Latest update

The Enterprise Bill, which, if enacted, would give policyholders a right to damages for late payment of claims, started its legislative journey when it was introduced into the House of Lords on 16 September 2015. See our previous briefing note for full details. 

A set of specific amendments to the late payment provisions of the Enterprise Bill were tabled during the Bill’s Committee Stage on 2 November 2015, but ultimately withdrawn or not moved following debate. Most notably, these amendments had sought specifically to exclude contracts in relation to “large risks” (adopting the EU’s definition of that term) and contracts of reinsurance from the late payment provisions.   

Two further proposed amendments have recently been introduced for debate during the Report Stage of the Bill in the House of Lords, which took place on 25 November. 

Amendment 62 – limitation period for bringing late payment claims

Under the proposals, claims have to be paid within a “reasonable” time. This obviously raises issues, which were recognised by the Law Commission, as to the limitation period for bringing a claim for late payment and Amendment 62 was moved to introduce a greater degree of certainly (the same issues arise under Section 150 of FSMA 2000). Amendment 62 was also designed to introduce greater certainty for insurers for reserving purposes. 

“An Action founded on a breach of the term implied by section 13A(1) of the Insurance Act 2015[i] shall not be brought –

(a)   After the expiration of one year from the date on which the insurer made the payment or, if the insurer has made more than one payment, the final payment of the indemnity in respect of which the breach is alleged; or

(b)   If earlier, after the expiration of six years from the date on which the cause of action for breach of the term implied accrued”.

The Amendment was ultimately not moved, although a number of the Lords taking part in the discussion made it clear that they had more sympathy for this amendment than for Amendment 61. The Law Commission had considered recommending a special limitation period in respect of late payment of claims but had decided that this was not the right way forward and that it was more consistent to recommend the application of general limitation laws. Notwithstanding this, the Lords taking part in the debate appear to have concluded that Amendment 62 “at least deserves further consideration”.

The report stage of the Enterprise Bill is to continue on 30 November, when other provisions of the Bill are to be considered. Following its Third Reading (on a date yet to be fixed) the Bill will move to the House of Commons for consideration.

DWF will continue to report on the Bill’s progress.

[i] It will be recalled the Enterprise Bill seeks to insert late payment provisions into the Insurance Act as section 13A



For further information please contact Jacquetta Castle on 020 7220 5226 or Robert Goodlad on 020 7280 8829.

By Jacquetta Castle and Robert Goodlad

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.