Motor Insurance Regulation Bill (HC Bill 229)




Reform the regulation and operation of the market in motor insurance; and,
specifically, to ban the payment of referral fees; to establish new standards
relating to the evidence required and damages payable for whiplash; to
reform the Pre-Action Protocol for Personal Injury Claims in Road Traffic
Accidents; to set requirements in respect of risk pricing for personal injury
claims; and for connected purposes.

Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and
consent of the Lords Spiritual and Temporal, and Commons, in this present
Parliament assembled, and by the authority of the same, as follows:—

1 Prohibition of referral fees

(1) It shall be unlawful for any person to solicit, offer, or pay any referral fee
relating to a personal injury road traffic claim, and no such fee may be
recoverable as costs of any legal advice, assistance, or actions.

(2) 5In this Act—

  • “referral fee” means any payment for the introduction of a potential client,
    for information which might assist in the identification of potential
    clients, or of any road traffic accidents in which they may have been
    involved, or of any sharing of fees arising from an action, or threatened
    10action, for the recovery of damages;

  • “personal injury road traffic claim” means any claim for damages for
    personal injury arising from a road traffic accident.

(3) An offence under this section shall be punishable on summary conviction by a
fine not exceeding the statutory maximum or on indictment by imprisonment
15for a term not exceeding two years, or a fine, or both.

2 Whiplash

(1) This section applies to any personal injury claim for whiplash.

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(2) The onus shall be on the claimant to satisfy the court that there is independent,
objective evidence that the claimant has suffered harm, and of the extent of that

(3) No damages shall be recoverable if the only evidence is the subjective
5description of symptoms by, or behalf of, the claimant.

(4) There shall be a rebuttable presumption that no harm or injury to the claimant
has been suffered where either or both of the following conditions applies—

(a) the collision giving rise to the accident took place at a relative speed of
15 miles per hour or less;

(b) 10there are no musculoskeletal signs of any injury, including fracture and

(5) In this section “whiplash” means a neck injury caused by a sudden movement
of the head forwards, backwards or sideways.

3 Road Traffic Accident Pre-Action Protocol

(1) 15The Table in Rule 45.29 of the Civil Procedure Rules 1998 (SI 1998/3132SI 1998/3132)
(Amount of fixed costs under the Pre-Action Protocol for Low Value Personal
Injury Claims in Road Traffic Accidents) is amended as follows.

(2) The figure for Stage 1 shall be £200.

(3) The figure for Stage 2 shall be £400.

(4) 20The figure for Stage 3 for Type A fixed costs shall be £125.

(5) The figure for Stage 3 for Type B fixed costs shall be £125.

(6) Any further amendment to the Table shall not be made by the Civil Procedure
Rule Committee but may be made by the Lord Chancellor by rules made by
statutory instrument and may not be made until a draft of the rules has been
25laid before and approved by resolution of both Houses of Parliament.

4 Motor insurance risk pricing

(1) In determining whether to provide motor insurance cover, and in setting the
relevant premium, it shall be unlawful and discriminatory for any insurer to
seek to isolate the level of risk arising from the incidence of personal injury
30road traffic claims in an area smaller than the standard English region, or
Wales, in which the applicant for motor insurance resides.

(2) Nothing in this section shall prevent an insurer from taking into account in
determining whether to provide cover, and the relevant premium—

(a) the applicant’s personal circumstances, namely their age, occupation,
35and record of claims, accidents, and convictions; or

(b) the place where the insured vehicle is to be kept;

but the place where the insured vehicle is to be kept may be taken into account
only for the purpose of assessing the level of risk of thefts of or from a vehicle.

(3) An applicant who is disadvantaged by a breach by an insurer of the provisions
40of this section shall be entitled to recover damages.

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5 Short title, commencement and extent

(1) This Act may be cited as the Motor Insurance Regulation Act 2011.

(2) This Act shall come into force six months after the day on which it is passed, or
on such earlier date as the Lord Chancellor may, by order made by statutory
5instrument, appoint.

(3) This Act extends to England and Wales only.