Rise of the Robo-Diagnosis

In a world where the role of the doctor as a sole diagnostician is changing as rapidly as the progression in medical technology itself it is a natural par for the course that our reliance on big data goes hand in hand. Greg McEwen discusses what the consequences might be for our trust in human decision and the accuracy of their diagnoses, as AI gradually takes over. Continue reading

Commercial Insurance for SMEs – a premature FOS extension

Eighteen months since the Insurance Act 2015 came into force the FCA is presently considering whether (and how) more SMEs should fall within the jurisdiction of the Financial Ombudsman Service. At present only smaller SMEs (“micro- businesses”) with €2m turnover and fewer than 10 staff can seek a FOS adjudication on disputed insurance issues. The FCA Consultation, concluding on 22 April, is seeking views on whether eligibility should be extended to small businesses with annual turnover of less than £6.5m and fewer than 50 employees. It is estimated that such an extension would provide an additional 160,000 businesses with access to the Ombudsman. In assessing how to respond to this consultation it is useful to consider the impact of the Insurance Act since the commencement on 12 August 2016. Continue reading

Automated driving legislation heads to Lords – a third Bill at its third reading

On 29 January the Automated and Electric Vehicles Bill completed its scrutiny in the Commons, at report and third reading stages. The AEVB is the third name for legislation in this area; the first was the Modern Transport Bill in the 2016 Queen’s Speech, the title of which then morphed into the Vehicle Technology and Aviation Bill. That Bill made some progress through Parliament during spring 2017 but then lapsed due to the general election in June. Its provisions on the insurance arrangements for automated driving are largely re-adopted and clarified in the current AEVB which now passes to the House of Lords.

In essence, part 1 of the AEVB will, when implemented, require compulsory motor insurance to be extended such that the motor insurer will be legally liable for damage caused by an automated vehicle driving itself. The quid pro quo for this extended liability is that the motor insurer will be given legal rights of recovery against any other person also liable. The Government has structured the legal regime this way in order to achieve the following:

  • to make sure that third parties injured by an automated vehicle driving itself can claim against a motor insurer in the usual way (rather than, say, have to make a product liability claim)
  • to provide the disengaged driver of the automated vehicle with these same rights, since he or she has, in effect, the status of a passenger when the car is driving itself, and
  • to permit motor insurers subsequently to recover against vehicle manufacturers (and software houses and the like) where they have paid claims in the first instance because the vehicle was driving itself.

The Secretary of State for Transport put this is more conversational language, observing during the debate that “...when you drive your car, Mr Deputy Speaker, it is you who is insured, not the vehicle. As a result of the Bill, in future the vehicle will equally be insured.” It might have been more helpful had he added “when driving itself” at the end of his remark, since the AEVB definitely does not bring about anything like a complete change to insurance of the vehicle as opposed to the current law which requires insurance of a person’s use of a vehicle.

An absolutely critical pre-cursor to the operation of the new insurance and liability regime is that insurers obtain ready access to vehicle data in order to establish in which mode the vehicle was operating at the time of an accident. This is not addressed in the Bill, but the House was reminded of it yesterday by Craig Tracey MP, who asked: “…given that the users of automated vehicles have to be able to demonstrate that their vehicle was in fully automated mode in order to exercise their rights under the Bill, what commitments can he give that data confirming the status of the vehicle at the time of the crash will be made available to the insurer?”

Craig MacKinlay MP intervened towards the end of the debate (which lasted for less than two hours) and hinted at significant longer term changes in ownership and use of vehicles that many expect when fully automated cars become a significant part of the UK’s motor fleet: “As we take the inherently illogical human being behind the wheel out of the equation, I wonder what the point will be in the future of maintaining one’s own vehicle – a vehicle that spends 95% of its time completely unused.”

It is worth recalling that the new regime in the Bill is to apply only when the automated vehicle is driving itself. When it is being conventionally driven, existing arrangements will continue to apply (i.e. that the motor insurer is liable for losses caused by the negligent use of a vehicle by an insured person). Thus, the new requirement in the Bill may be seen as an extension to the compulsory cover required by s145 of the Road Traffic Act 1988. In fact, the AEVB will add a new subsection to s145 to make this very clear.

The Bill (and its predecessors) has been widely welcomed in principle across the insurance industry and it appears to have general cross-party support. For these reasons it appears likely that any amendments considered during its imminent passage in the Lords might be much more by way of clarification than attempts to change the proposed insurance regime fundamentally. For example, the concept of an accident “caused by” an automated vehicle might be more fully explored.

We shall provide further information as the Bill progresses.


Portrait photograph of Alistair Kinley, Director of Policy & Government Affairs Dale_K-7_web

Written by Alistair Kinley and Kerris Dale at BLM

Further clarification of the scope of motor insurance: European Court of Justice decision in Núñez Torreiro (C-334/16)

Yesterday the ECJ published its judgment in this case, a reference from Spain. Sr Núñez Torreiro was injured when the all-terrain military vehicle in which he was a passenger overturned during an exercise inside a restricted military area. The key question was whether Spanish legislation could exclude these circumstances from the scope of compulsory cover as required by the Motor Insurance Directive? The advice of the Advocate General, given in June this year, was that it could not.

Continue reading

Vnuk: increasing costs for businesses?

The Vnuk problem

The original case arose from an injury claim in which a Slovenian worker was knocked off a ladder by the trailer attached to a reversing tractor on a farm.  The ECJ ruled that as this vehicle was intended to be used on a road, it should be covered by the compulsory motor insurance regime under the 6th Motor Insurance Directive (MID).

More specifically, the decision was that compulsory motor insurance applied to any vehicle being used anywhere, for any purpose, for which it was intended.  Such a wide ambit encompasses all sorts of vehicles traditionally covered under EL and PL policies, for example agricultural vehicles, construction vehicles, forklift trucks, EBTs and driveable aircraft steps.

How this ruling is interpreted among European courts is up for debate and is currently being considered by the EC. The outcome will have significant ramifications for the general insurance arrangements of corporates.

Action plan

A much-awaited action plan from the European Commission (EC) on how to deal with the ramifications from the European Court of Justice (ECJ) decision in Damijan Vnuk v Zavarovalnica Triglav remains elusive, much to the frustration of governments, insurers and businesses across Europe.

Continue reading

Maximising ADR – a one way street?

“It is an ideal time to look in detail at how the potential for ADR can be maximised.”

Sir Terence Etherton, Master of the Rolls, Chair of the Civil Justice Council

The Master of the Rolls was speaking on the launch of the Civil Justice Council Consultation ‘ADR and Civil Justice’ in October: the deliberate use of the word “maximised” confirms that, in the view of the senior Judiciary the question to be addressed is not whether or not ADR should be used but how much and how often. The Consultation (responses are due by 15 December) feeds in to a number of reforms, reviews and reports that consider the shape of the civil process in the early 21st Century. It would be easy to take a view that the Online Court (non-tortious claims under £25,000) can be ignored, that the LASPO review (announced for 2018) will be an “it’s working / no change” review and that the ADR review is only really likely to affect higher value cases (which often settle and mediate anyway).

Continue reading

Jackson 2.0 – The Next Big Thing

“The next big thing we can do – and my department cares a great deal about costs across the board and disproportionate costs really impede to access to justice – is to try and extend fixed recoverable costs to as many areas of civil litigation as possible.”

Richard Heaton, Permanent Secretary Ministry of Justice
16 October 2017

It might be thought that re-patriating judicial authority from the European Court would be top of the Whitehall agenda and so it is interesting to note the evidence, cited above, of the Minisitry of Justice’s most senior civil servant before the Public Accounts Committee earlier this week. It seems clear that the MoJ retains its focus on a series of reforms and initiatives that will change the court process, the way in which users interact with the courts and in which lawyers’ fees are paid.

Continue reading

Commission considers significant European support for Motor Insurance Directive change

As we mentioned in two recent Vnuk blogs the European Commission has picked up the pace in considering the issues that arise both in respect of that judgment but also in respect of the Motor Insurance Directive. Whilst a broader consultation closes in October a narrower Inception Impact Assessment consultation closed this week with 20 substantive responses. There are two Government responses (UK and Ireland) with British, French, German, Irish, Spanish and Maltese insurers responding through member organisations such as the ABI. Additionally the Council of Bureaux, the Secretariat for 47 National Guarantee Funds (the European MIBs) has also responded on behalf of its members. Motorsport responses are also strong with two from the UK and one from Ireland, again responding collectively on behalf of members. All of the above favour the “in traffic” amendment to the Motor Insurance Directive to reflect a narrower compulsory insurance obligation than is implied by the Vnuk judgment itself (save for the French Insurance Federation which takes the view that its compulsory cover already includes Vnuk).

The contrary case in respect of Vnuk is presented by three lawyer lobbying groups: APIL, FOCIS and PEOPIL. The first two are broadly representational of UK legal firms but the latter has a much broader Pan-European (an indeed wider global) membership.

A narrow reading of “for” and “against” is dangerous on a technical issue and responses, even of those arguing for the ‘full Vnuk’ accept that there should be exceptions. The weight of insurer responses and particularly that of the Council or Bureaux should, one would hope, carry significant weight with the Commission. The very clear concerns of motorsport about the existential threat posed by the ‘full Vnuk’ are articulately expressed and broaden to include reference to other European treaties and societal considerations.

There is an ongoing debate about the issue and further work to be done. The wider consultation on MID does not close until 20 October and there will be further opportunity to reinforce the arguments about the scope of MID and Vnuk in those submissions. BLM is hosting a workshop on the subject on 25 September and is happy to welcome interested parties.


 Written by Terry Renouf, consultant at BLM

Insurance Act Anniversary: no news is Market Best Practice

At midnight tonight the insurers’ faithful servant expires: the last commercial insurance policy based on the Marine Insurance Act 1906 will end and on renewal the Insurance Act 2015 will apply. There may be some wrinkles around contracting out and perhaps a multi-year policy could see some limited application of life support to rare atypical policies but Saturday August 12th 2017 marks the first anniversary of commencement of the Insurance Act 2015. From that point the MIA1906 will start to fade until the last claim has been presented, adjusted and paid. Whilst “full” implementation of the Law Commissions’ extensive programme of Insurance Reform will only be in place on May 4th 2018 (the date which marks the first anniversary of the commencement of the “late payment” term) to all intents and purposes the IA2015 is the only show now in town.

Continue reading

Eight principles for cyber security of automated vehicles

The legislation on insurance arrangements for automated driving is expected to re-emerge this the autumn, with the Queen’s Speech in June trailing the Automated and Electric Vehicles Bill (replacing the now-lapsed Vehicle Technology and Aviation Bill).

A further critical element of the regulatory regime associated with this rapidly developing technology is ensuring data security and integrity and that concern is front and centre of eight key principles published by the UK government on 6 August 2017.

Continue reading