Insurance Bill goes to the Lords (From Lancashire Telegraph)

Insurance Bill goes to the Lords

11:01am Thursday 3rd November 2011 in Jack Straw column By Jack Straw, MP for Blackburn

Regular readers will recall that in mid-September I introduced a Bill into the House of Commons to clean up some of the worst practices of the motor insurance and claims’ industries, which have forced up premiums 40 per cent in a single year (by much more in some areas, including ours).

This Bill has four key parts: 1) To make it impossible to claim damages for ‘whiplash’ except where there had been a real injury which decent doctors could objectively diagnose.

2) To cut in half the £1,200 flat fee which lawyers get for making a claim (for less than £10,000) through the Ministry of Justice electronic ‘portal’.

3) To stop ‘post-code discrimination’ against areas like ours (and others that are even harder hit).

4) To ban ‘referral fees’ – the outrageous trade by which people’s personal details, and their claims, are bought and sold, typically for £600 a case, by claims’ management companies, lawyers, others – and the insurers themselves.

Three days before my Bill was due for debate, Justice Secretary Kenneth Clarke announced that the Government now agreed with me about banning referral fees.

I am very grateful to him.

This Tuesday Mr Clarke was as good as his word, and brought forward new provisions into a Justice Bill already before the House to effect this ban, in respect of personal injury claims.

So far, so good – and Mr Clarke’s new provisions went through the House with all-party support.

However, there is a key issue about how this ban should be enforced.

Mr Clarke believes that it should be done through the various regulators – like the solicitors’ regulatory bodies, and the new Financial Conduct Authority.

I said that’s fine as far as it goes, but the ban should also be backed by criminal sanctions.

So I pushed an amendment to this effect to the vote, but lost.

The Bill will now go to the Lords. I’ll now be working with colleagues there to get the other reforms in my list into the Bill.

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