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Cost Of Car Insurance Goes Down

Car insurance
27th October 2014

Third-party personal injury claims fell by 10% in 2013, according to a new report by the Institute and Faculty of Actuaries (IFA). As a result of the introduction of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO), the number of third party claims has declined for the first time in ten years.

Although injury claims remain higher than third party damage claims by a ratio of just over 30%, the IFA state that the frequency of third party damage claims have declined by 27% since 2009, partly as a result of reduced mileage per vehicle.

The report also found that insurers seemed to have responded to the reduction in claims, by cutting third-party premiums for the financial year to the end of March 2014. While motor premium quotes increased significantly during 2010, they began to fall from the end of 2011 with premiums nearly 10% lower at the end of March  2013 than the previous year.

“Anticipated the impact of legal changes...”

According to the IFA, it was “clear that the motor insurance industry had anticipated the impact of legal changes and has already passed on the reduction in costs to consumers.”  In the year ending March 2014, it was found there had been a 19% reduction in quoted premiums (Watson Car Insurance  Index).

“Legal changes in 2013 appeared to have had a ‘significant impact’ on motor insurance injury claims”, said a spokesman on behalf of the working party which produced the report, adding that they “remain uncertain as to what the final impact of these changes will be, as well as that of other legal changes, such as the upcoming whiplash reforms.” 

Solicitors Involved In Conveyancing Fraud

“Unprofessional and dishonest behaviour”, was cited in a recent Supreme Court dismissal of an appeal involving solicitors acting on behalf of nominee purchasers in ‘sale-and-rent-back’ transactions by a property buyer organisation. The judge noted that a number of solicitors involved in the transactions were subsequently the subject of disciplinary proceedings.

The court heard that homeowners who were persuaded to sell their properties to buyers were also promised the right to remain in their homes as tenants for an extended period after the sale. However, the homes were purchased with the assistance of mortgages taken out with lenders who were not informed that the homeowners were likely to be still living in the property.

When the purchaser applied for a loan from one of the lenders, it was disclosed on the application form that the property was being purchased on a ‘buy to let’ basis and the tenancies granted would be assured short-hold tenancies of six months duration. As a result, contract exchange and finalisation of the mortgage were completed on the same day.

Rights of occupation not permitted

However, under the terms of the lender’s mortgages, neither the rights of occupation promised by the purchasers to the vendors nor the tenancies granted by the purchasers were permitted. When the purchasers subsequently defaulted on their mortgage payments, the lenders sought possession of the homes, which the tenants contested at high court.

At the present hearing, the judges agreed that the purchaser was not in a position at the date of exchange (or any time up until completion) to confer “equitable proprietary rights” on the vendors, as opposed to “personal rights” only.

Addressing the issue of whether the contract should be seen as an indivisible transaction with the conveyance and the mortgage, it was held that the scheme, “could not have worked if the solicitors for the vendors and the solicitors for the purchasers/lenders had complied with their professional obligations and proper and normal conveyancing practice.”

The court warned solicitors involved in sale-and-rent-back schemes to “be very careful when giving advice to lender clients”, noting that there were around 90 other cases involving the property purchasing company and “many other cases in other parts of England involving similar schemes.”

 Judicial Review Bill Defeated In House of Lords

Government plans to make those who apply for judicial review pay their own costs have been defeated by the House of Lords.

A judicial review allows individuals and groups to apply to the Administrative Court - a division of the High Court – to re-examine a court decision with the aim of having the verdict overturned and possibly obtain damages.
Following a five hour debate, members from across the upper house joined together to pass amendments to the Criminal Justice and Courts Bill by a majority of 33. Peers also voted by a majority of 66 to ensure judges “retain their discretion” over whether to hear judicial review applications.

The Ministry of Justice proposals were introduced to the House of Commons in February 2014, less than a year after legal aid cuts were set out in the Legal Aid, Sentencing and Punishment of Offenders Act (LASPO). Since that time, both the parliamentary committee on human rights and members of the legal profession have been actively opposed to the bill, which if passed, would have made it more difficult to bring cases against public organisations.

Bill would limit access...

There was a concern that without amendment, the bill would limit access to those without sufficient financial means to have their particular case reconsidered. Under the bill, the courts would have been discouraged from capping an applicant’s costs until after their case had been accepted. Not knowing their liability until later in the proceedings could act as a deterrent to litigants.

The debate also voted to allow judges to keep their discretion over hearing judicial review, which according to former lord chief justice Lord Woolf, is “the residual remedy of citizens to deal with their fear of unlawful action by the Executive.”

The Ministry of Justice say they are now “considering how to proceed.” If the House of Commons overrules the Lords vote, the proposed measures are likely to go to appeal at the Supreme Court. 

“No Dispute” Between Parties Allows “Without Prejudice” Admissible In Court

Letters and emails which either contain or omit the heading “without prejudice” can be relied upon at a court hearing if there was “no dispute at the time of writing between the parties involved”, a high court has recently reconfirmed.

The “without prejudice” rule generally prevents statements made in a genuine attempt to settle an existing dispute - in writing or spoken - from being put before the court as evidence against the interest of the party which made the admissions.

In a case involving a loan agreement, the borrower sought to renegotiate the loan two years after the initial agreement. While the discussions over the renegotiations slowly progressed, under the agreement the lender served statutory demands on the borrower who did not dispute their validity or liability to repay the loan.

At the same time, the lender's accountants and solicitors sent letters and emails to the borrower, which were headed "without prejudice", setting out the terms upon which the lender was prepared to restructure the loan. In all replies, the borrower also included the “without prejudice heading.

Judge considers ruling regarding inadmission

In order to allow the ‘without prejudice’ documents to be admissible at trial, the judge considered the ruling regarding inadmission on the grounds of being “without prejudice”, stating there must be a “genuine dispute” and the document “must form part of a genuine attempt to resolve a dispute.”

If there is no dispute about a liability, but only a “negotiation” as to how and when a liability should be carried out then the ensuing associated negotiations and documents would not be covered by the “without prejudice” exception to the admissibility of relevant evidence.

In the case before the court, it was shown that the correspondence proceeded “quite clearly on the basis that there was an existing liability” and that the “whole purpose of the proposals was to arrive at an agreed restructuring of that admitted liability.” The court also found there was no evidence the claimant (applicant) “believed, or had reason to believe, that there was any dispute about the liability...”

The court concluded that “communications made at a time when there is “no dispute” cannot be subject to being “without prejudice” in retrospect by subsequently “raising a dispute.”

Vulnerable Patients At Risk From Radical Treatments Bill

Legal practitioners are concerned that a bill currently passing through the House of Lords could place vulnerable patients at risk from doctors allowed to try out new, experimental treatments.

Alarm has also been raised that the proposed Medical Innovation Bill - legislation drafted by Lord Saatchi, dubbed the “Saatchi Bill” – would, ultimately, provide legal protection to doctors who want to attempt “different” procedures, especially in the treatment of cancer or face “pressure from pharmaceutical companies” to try specific drugs.

A further fear is that the bill would not only apply to dying people who are “willing to give anything a chance” but according to the Association of Personal Injury Lawyers (APIL), impact those patients susceptible to taking a risk “at the hands of maverick doctors who are over-ambitious in their drive to make names for themselves."

Amendments may not go far enough

After consulting with NHS England, Saatchi has agreed to a government amendment requiring at least one additional expert to 'sign off' the treatment or procedure being used. However, it appears that the amendments may not go far enough to address concerns raised by patient groups and medical safety groups over patient safety.

The amendments simply require a doctor to 'obtain the views' of an 'appropriately qualified doctor' before administering an innovative treatment. It has been pointed out that the definition of 'appropriately qualified doctor' has not been made clear, and at the same time, a doctor would not be bound to act on those views.

The Bill, which has failed to win the support of key bodies such as the British Medical Association, Royal College of Physicians and the Academy of Medical Sciences will now progress to the report stage. Approval by MPs and peers to the amendments could see the bill come into force at the beginning of 2015.