Enterprise Bill & late payment of claims – latest Lords debate

Technical amendments to the Bill’s clauses dealing with late payment of insurance claims were debated on 25 November in the Lords. The amendments concerned legal privilege attaching to coverage advice to insurers and limitation for claiming damages for late payment of the claim.

A sharply defined limitation period in the law should greatly reduce uncertainty about when an insurer’s new liability for late payment comes to an end. If the Government acts on these amendments, then that would be in place when the Bill is passed next year.

My recent post about these amendments on our RED blog (which explained how they would operate) anticipated that they would probably be adopted by Government at this stage. That has turned out not to be the case.

The Treasury Minister in charge of the Bill, Baroness Neville-Rolfe, closed the debate and called for the amendments not to be pressed. On the first, she said that the Government’s view was that “legal privilege is a complex topic [and] should not be changed in a specific context without very good reason.” She was a little more open to considering the second – limitation – saying that “it might represent an improvement to the late payment clause, which could be in the interests of both policyholder and insurer [and] would like to explore the details of this possibility further and to discuss it with all interested parties.”

These remarks echo comments earlier in the debate by Baroness Noakes, who doubted that the Government would accept the amendments on the basis that they had been tabled relatively late in the day. Baroness Noakes was a member of the Special Bill Committee that scrutinised the Insurance Act 2015, so her remarks carry some weight. She went on to encourage the Minister to consider the limitation amendment in detail before the Bill returns to the Lords for its third reading. That now looks set to happen and it’ll be covered on this blog when it does.

About the Author

akAlistair Kinley is BLM’s Director of Policy & Government Affairs.

Alistair is responsible for BLM’s engagement with government departments and regulators on policy and public affairs issues and consultations affecting the firm and its customers. He coordinated BLM’s market-facing activities in connection with the Insurance Act 2015 and the consultations which preceded its publication and introduction in Parliament.

He is a member of the Civil Justice Council (CJC), a regular speaker and experienced commentator on legal and procedural reforms and was a contributing editor to the Law Society’s Litigation Funding Handbook (September 2014).

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