50 Predictions: Motor - DAC Beachcroft

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50 Predictions: Motor

Published On: 1 September 2016

UK to press the accelerator pedal on autonomous driving development

The UK is set to consolidate its position as the central European hub for the development of autonomous vehicle technologies with Volvo beginning tests on London’s roads in 2017. Google also has its sights set on London to begin testing its driverless cars outside the US, citing the UK’s light regulatory approach as the attraction.

The Queen’s Speech in May 2016 confirmed that the UK government will revise domestic road traffic legislation – including insurance provisions – so autonomous cars are given the green light to operate on Britain’s roads. Due consideration will need to be given to potential criminal culpability behind the wheel, as well as how civil liability might pass among drivers, vehicle manufacturers and software providers depending on the mode of operation at the point at which an incident occurs.

Credit hire reform still being considered by the government

The credit hire arena is undoubtedly set to change this year. The government is keeping credit hire as a live issue in its package of reforms. Although it is not willing to consider regulation or price capping, it is still considering options including a first-party model, or the at fault insurer having to provide a replacement vehicle. These options have the potential to reduce seriously the number of credit hire claims presented by third parties.

In addition to government reform, court battles over rates look set to continue. McBride v UK Insurance Ltd, which is listed for February 2017, should provide more guidance on basic hire rate evidence, which will result in reduced litigation in the area. However, until judgment is handed down, high volumes of credit hire litigation should be expected.

Expect to see more claimant Part 36 offers in fast track motor litigation

Recent case law will change the way claimants use Part 36 offers in fast track litigation, with greater emphasis on early, carefully pitched offers. In Broadhurst and another v Tan and another, the Court of Appeal found a conceptual difference between fixed recoverable costs and assessed costs on the indemnity basis pursuant to a successful Part 36 offer, paving the way for claimants to receive both where they subsequently achieve a judgment that is at least as favourable as their Part 36 offer.

In October 2016, the Court of Appeal is due to give judgment in Bird v Acorn Group Ltd, which concerns whether a claimant is entitled to the bracket of fixed recoverable costs designed for cases settling ‘post listing but pre trial’ where a matter is listed for disposal and subsequently settles before trial without substantive case management directions being given.

With over 750,000 claims passing through the Portal each year, a large proportion of which settle without a trial, the potential additional cost to motor insurers is substantial, though the decision will also be of significance to EL and PL insurers.

Regardless of the outcome, there will need to be a tactical refresh. If the claimants win, insurers will need to deploy a cost/benefit analysis before deciding to compromise a claim listed for disposal early in proceedings; conversely, if the decision goes in favour of insurers it is likely to prompt yet more early Part 36 offers, as claimant solicitors attempt to dispose of claims within budget.

Key developments in 2015/16