BIBA response to the review of the uninsured and untraced drivers arrangements with the Motor Insurers Bureau consultation

26th April 2013

The British Insurance Brokers' Association (BIBA) is the UK's leading general insurance organisation representing the interests of insurance brokers, intermediaries and their customers.
BIBA membership includes just under 2,000 regulated firms having merged with the Institute of Insurance Brokers (IIB) in November 2011.
General insurance brokers contribute 1% of GDP to the UK economy and BIBA brokers employ more than 100,000 staff.

BIBA helps more than 400,000 people a year to access insurance protection through it’s Find a Broker service, both online and via the telephone.
Brokers provide professional advice to businesses and individuals, playing a key role in the identification, measurement, management, control and transfer of risk. They negotiate appropriate insurance protection tailored to individual needs.
Thank you for inviting BIBA to respond to this consultation, we agree with the overarching intentions of the consultation and our responses are listed after each question. 

Question 1

Do you agree that, if the MIB is required to be named as a second defendant in a claim and the claim form is submitted to the MIB within a reasonable time frame, then the procedural or notice obligations on the claimant in clauses 8 to 12 of the present Uninsured Agreement can be removed? If you do not agree, can you please explain your reasons why?

BIBA take on board the consultation paper concern about the risk to a claimant of unwittingly failing to comply with the procedural requirements and the unfair burden this creates. The right balance should be struck and BIBA believe that the majority of provisions can be stripped away, leaving just, (1) a requirement to join MIB in the action as a further Defendant from the outset, (2) the requirement for notice of commencement of proceedings in certain cases, (3) a requirement to provide information and (4) the requirement for the early submission of a fully completed claim form. We agree with the proposal from the MIB that proposes a notice requirement along the following lines:

“If notice of commencement of the relevant proceedings is given to an insurer where it is reasonably believed that that insurer has issued insurance in respect of the vehicle in question, MIB shall not be able to avoid its obligation under this Agreement provided
that (a) MIB has been notified of the proceedings as soon as reasonably practicable after the Claimant ceases to have a reasonable belief as to the involvement of the insurer and (b) correct notice of commencement of proceedings has previously been
given under the 1988 Act to the insurer”.

Question 2
Do you agree that clause 13 serves no useful purpose any more?

We agree it could be removed. However, we believe it is still good practice for accident victims to establish the details of the other party and clarify the insurance details as not all cases are always on the MID. e.g. foreign drivers, the driving other cars extension.
Question 3
What do you consider to be a reasonable timeframe for the claim form to be
submitted to the MIB and when it should run from?
As soon as reasonably practicable, with a cut off of 6 months from the date of the incident.
Question 4. Do you agree that a claimant should be able to serve documents by
any of the forms allowed under the Civil Procedure Rules? If not why not?
Yes, in uninsured cases.
Question 5 Do you agree that, for protected parties without legal representation, an arbitrator should be appointed to approve any award made by the MIB? If you do not agree, please give your reasons?

Yes, BIBA agree an arbitrator should be appointed in these circumstances.

Question 6 Do you agree that, under the Untraced Agreement, an independent arbitrator could be appointed to determine whether an extension of time should be allowed or whether an appeal is in time? If you do not agree, please explain your reasons? Question 7 What narrow range of circumstances do you think would help prevent abuse of the process?

Answer to question 6 and 7:

We believe the 6 week period should remain. However, there should be the ability in exceptional cases to extend this where an arbitrator could argue the ill health of the claimant the 6 week timeframe was insufficient.

Question 8 Do you agree that there should be a single dispute resolution process?

Yes, for matters of process, clarity and cost, BIBA agree with the single dispute resolution process.

Question 9.
Do you agree that the MIB as well as the claimant should be required to agree that they accept the arbitrator’s decision as final? If not, why not?

Yes, BIBA agree the arbitrators decision should be considered final by the MIB and claimant.

Question 10
Do you agree with our proposal that a claimant should be entitled to an oral hearing for all disputes, including those not related to the award? If not, what are your reasons?

Yes, BIBA agree.

Question 11
Do you agree that there should be the potential for an arbitrator to impose a costs penalty if unreasonable challenges are made and pursued to an oral hearing? If not, what are your reasons?

Yes, BIBA agree.

Question 12
Do you agree that claimants should be able to appeal to an independent arbitrator rather than the Secretary of State if they dispute the reasonableness of the MIB’s request for information under the Uninsured Agreement (present clause 19)? If not, what are your reasons?

Yes, we agree.

Question 13
Do you agree that there should be more flexibility for the MIB to award more for legal expenses in exceptionally complex cases? If so, in what circumstances do you feel that such a discretion should apply?  Question 14
Do you agree that the claimant should have the right of appeal to an arbitrator to challenge the MIB’s refusal to award supplementary costs in an exceptionally complex case?

BIBA believe this has the potential to open the floodgates and believe it more prudent to work with the fixed fee framework. Our concern is what written rules define what makes an exceptional case and that in order to ensure that it is not argued in every large case.

Question 15
Do you have any comments on how fixed costs at the bottom end of the scale could be amended to more accurately reflect the actual amount of legal fees which will necessarily be incurred in a low value, straightforward claim?

The minimum figure of £500 should be removed as it is currently too high.

Question 16
Do you agree with our proposal that the Agreement should be amended to make it clear that the MIB will include interest as if the claim was before a civil court? If not, please explain why not?

Yes, we agree with the proposal, the rates should reflect the sums awarded by the courts.

Question 17
Do you agree that we should remove clauses 5(2)(d) and 6(3)(d) of the Untraced and Uninsured Agreements respectively. If not, why not?

Yes, BIBA agree. 

Question 18
Do you agree that we should introduce a definition of crime in the Uninsured Agreement like that in the Untraced Agreement? If not, please explain why not?

Yes we agree.

Question 19
If there are any grounds why the Agreements should not be changed to reflect that the Lord President has powers to appoint arbitrators in Scotland, let us know.

Yes, BIBA agree.

Thank you for taking the time to consider BIBA’s response, if you would like to meet to discuss any of the answers above in more detail then please contact me on the details below.

Yours sincerely  
Graeme Trudgill FCII
Head of Corporate Affairs
0207 397 0218
[email protected]