All 2 Ed Davey contributions to the Civil Liability Act 2018

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Tue 4th Sep 2018
Civil Liability Bill [Lords]
Commons Chamber

2nd reading: House of Commons & Money resolution: House of Commons & Programme motion: House of Commons
Tue 23rd Oct 2018
Civil Liability Bill [Lords]
Commons Chamber

3rd reading: House of Commons & Report stage: House of Commons

Civil Liability Bill [Lords] Debate

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Department: Ministry of Justice

Civil Liability Bill [Lords]

Ed Davey Excerpts
2nd reading: House of Commons & Money resolution: House of Commons & Programme motion: House of Commons
Tuesday 4th September 2018

(5 years, 6 months ago)

Commons Chamber
Read Full debate Civil Liability Act 2018 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 110-I Marshalled list for Third Reading (PDF, 56KB) - (26 Jun 2018)
David Gauke Portrait Mr Gauke
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I would challenge that. When the Competition and Markets Authority looked at the insurance industry, it found that it is a competitive industry. The factor that is most likely to ensure that benefits are passed on to consumers is competition, and the evidence suggests that there is competition in this area, but we will ensure that insurance companies provide robust information so that they can be properly held to account. As I say, the Government will bring forward amendments in this area, as we have committed to do.

David Gauke Portrait Mr Gauke
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I will give way, and then I am keen to make progress.

Ed Davey Portrait Sir Edward Davey
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It is key that these savings are passed on to motorists. In the other place, my noble Friend Lord Sharkey tabled an amendment suggesting that one way of doing that was to give some regulatory power to the Financial Conduct Authority to hold insurance companies to account. Will the Secretary of State tell the House now whether, in bringing forward this amendment, real teeth will be used to ensure that insurance companies cannot get away with keeping this cash themselves?

David Gauke Portrait Mr Gauke
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If the right hon. Gentleman will forgive me, we will be coming forward very shortly with those amendments. He will not have to wait long to see the details of the amendments. He will see that we are striking the right balance in ensuring that insurance companies can be properly held to account and that we are not placing unnecessary and expensive burdens that ultimately get paid by policyholders. He will see that we are taking this issue forward.

Civil Liability Bill [Lords] Debate

Full Debate: Read Full Debate
Department: Ministry of Justice

Civil Liability Bill [Lords]

Ed Davey Excerpts
3rd reading: House of Commons & Report stage: House of Commons
Tuesday 23rd October 2018

(5 years, 5 months ago)

Commons Chamber
Read Full debate Civil Liability Act 2018 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 23 October 2018 - (23 Oct 2018)
Chris Philp Portrait Chris Philp
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The companies are not defending the claims because qualified one-way costs shifting makes it more expensive for them to successfully defend a claim than simply to pay it out. The system simply is not working.

Ed Davey Portrait Sir Edward Davey (Kingston and Surbiton) (LD)
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Does the hon. Gentleman think that any genuine claimants will be hit by this measure and will not receive the compensation that they should get?

Chris Philp Portrait Chris Philp
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The right hon. Gentleman raises a fair concern. Of course, we need to make sure that we do not overcompensate and find ourselves in a situation in which genuine claimants are prevented from claiming. The way in which we are legislating strikes that balance and genuine claimants can still make a claim. My hon. Friend the Member for Bromley and Chislehurst referred to the use of an easy-to-operate online portal as a way of ensuring that claims can be handled easily, even by laypeople. The concern that the right hon. Member for Kingston and Surbiton (Sir Edward Davey) raises is reasonable, but I think that the Government have addressed it in their handling of the matter. However, I am sure that the Minister will comment further on the right hon. Gentleman’s point.

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Chris Philp Portrait Chris Philp
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I agree wholeheartedly with my hon. Friend, who I know has a distinguished legal background. Both he and the Chair of the Justice Committee have powerfully made the point that McKenzie friends should be voluntary and unpaid. I hope the Minister heard that excellent recommendation, which has now been made by two learned hon. Members of this House.

Ed Davey Portrait Sir Edward Davey
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I congratulate the hon. Gentleman on making a speech against the Bill. He has admitted that the insurance companies should be fighting the claims, that McKenzie friends should not be paid and that claims management companies should be regulated. He might not have realised it, but he has defeated the Bill by himself.

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Chris Philp Portrait Chris Philp
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I disagree with all three things that the hon. Gentleman has said. First, as I said earlier to the right hon. Member for Kingston and Surbiton (Sir Edward Davey), the Government have no intention at all of preventing legitimate claims from being made. The Government are keen to facilitate those claims, and the online claims portal will help with that. There is categorically no intention of disbarring, preventing or in any other way inhibiting legitimate claims from being made.

Secondly, the hon. Gentleman referred to the 1% fraudulent claims figure. The reason the reported figure, which in my submission is dramatically under-reported, is so low is that insurance companies are, quite wrongly, choosing to settle those claims—even suspicious claims, even claims without merit—without defending them, because the cost of defending them, which is about £10,000 or £15,000, far exceeds the value of the pay-out. So the 1% figure cited by the hon. Gentleman goes nowhere close to reflecting the true scale of fraudulent claims in this area.

Ed Davey Portrait Sir Edward Davey
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Will the hon. Gentleman respond to a general point? Does he believe that when we are tackling a problem, in any aspect of society, we should deal with the symptom or the cause?

Chris Philp Portrait Chris Philp
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Of course we should deal principally with the cause, and that is what the Bill seeks to do. [Interruption.] The right hon. Gentleman asked about causes. We can talk about claims management companies and we can talk about referral fees—those are important issues to deal with—but the cause of this problem is the financial incentives created by qualified one-way costs shifting, whereby claimants, aided and abetted by claims management companies, can have a crack for free, suffering no loss if their unmeritorious claims are dismissed. If the right hon. Gentleman wants to go into the cause of the problem, that is the cause of it, and elevating the small claims track limit to £5,000 will do a great deal to eliminate the cause. If he wishes to address the cause, as his intervention implied, he should vote against new clause 1.