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House of Commons Hansard
Third Parties (Rights against Insurers) Bill [Lords]
23 March 2010
Volume 508

Bill, not amended in the Public Bill Committee, considered.

Third Reading

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I beg to move, That the Bill be now read the Third time.

It is a great pleasure to guide this Bill through its final stages, because it is a very good example of the valuable, expert work that the Law Commission has done to simplify difficult and technical areas of the law and to make them more accessible and more obviously relevant to ordinary people in ordinary situations. I thank the commission for all its hard work on this project. Although our procedures remain unchanged, this Bill was the second candidate to trial a new procedure in the other place for appropriate Law Commission Bills, which I hope will help further to support the commission’s work in making the law more modern and effective.

The procedures in the Bill will allow the liability of the insured and the insurer to be resolved in just one set of proceedings. If the insured and the insurer are liable, the insurer will pay compensation directly to the third party who will, under the Bill, have been put in the shoes of the insured. The Bill is intended to clarify and simplify the law. It will therefore result in the quicker and cheaper resolution of claims. On that basis, I commend to the House this Bill, which is likely to be the final Bill that I shall take through the House.

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I join the Minister in paying tribute to the Law Commission for coming up with this Bill under the new, expedited procedure. Let me also declare an interest as a former practising barrister. I want to put on record my gratitude to the Minister for the way in which she has handled not only this Bill but many others, as this might be my last opportunity to thank her personally from the Dispatch Box for her work and to wish her well for the future. I understand that she will be in charge of the Department during the Dissolution period, after which it could fall to another party to take over from her. That is the Conservatives’ hope, but we wish her well for the future anyway, and we hope very much that during those four weeks or so she does not cause any major problems, but makes sure that there is a steady hand on the tiller.

As the Minister has pointed out, the Bill is part of the new, expedited procedure for bringing through Parliament Law Commission Bills that command widespread consensus and support. It follows in the footsteps of the Perpetuities and Accumulations Act 2009—complex legislation that went through the House with the minimum of fuss. The Bill is important because it builds on the Third Parties (Rights against Insurers) Act 1930, which overturned the original, common law privity of contract doctrine, which stated clearly that no insurance liability was directly enforceable by a third party against an insurer. Real problems accrued as a result of that well-established principle, and the introduction of the 1930 Act reflected how the economy and society were moving on, not least with the proliferation of cars on the roads. A number of insured people were, sadly, getting killed, and third parties had to take over those insured rights against insurance companies.

It is not surprising that there have been one or two problems with the 1930 Act, as 80 years have intervened since then, in which time there have been many changes to our economy and legal system. If the insured were a dissolved company that had been struck off the register, the third party had to restore it to the register in order to mount a successful claim. That took time and cost money, and there was no need for that to happen. That is one of several key issues that the Bill addresses. All of the key changes are very straightforward and command widespread support. It was noticeable, during the consultation process, that people in all parts of the industry, including practitioners and other interested parties, spoke with one voice. It is quite a phenomenon to have everyone singing from exactly the same hymn sheet.

I should like to know from the Minister what lessons have been learned from the new procedure. The Bill was first mooted as long ago as 1998, in a Law Commission report, but it has taken 12 years to come before the House in its present form. I hope that it will be on the statute book very soon. How much quicker could that progress have been made if we had had in place the new procedures that were brought in under the Law Commission Act 2009 for expediting such Bills through Parliament? Could we have got it through Parliament in a couple of years, or even less time?

The Minister mentioned in a letter that she sent to me after our Committee proceedings that her Department would soon lay before the House a new protocol under the Law Commission Act 2009. Will she tell us whether it will be laid before Dissolution? I want to press her on an issue that I raised in Committee that she did not mention in her letter to me of 15 March, which refers to the Law Commission paper, “Insurance Contract Law: Misrepresentation, Non-Disclosure and Breach of Warranty by the Insured”. That important report will give rise to legislation that could, to some extent, be allied to parts of this Bill, and I should like to know what happened to that report and whether a Bill will be coming forward in the near future.

The Bill is small but important. It builds on the 1930 Act, as I have said, and it will help a number of our constituents at times when their lives have become a complete misery because of the complexity of the existing law. It will take a small step towards alleviating that misery, and that is why the Conservatives are very pleased to support it.

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The Bill is not unimportant and neither is it lacking in complexity, but it is very welcome and, I hope, lacking in political controversy. It was therefore an extremely good candidate for the accelerated procedure that was used. We in this place cannot subcontract our scrutiny of legislation, but we can subcontract much of the hard work on its preparation and on the technical issues that must be addressed. We could put such work in no safer hands than those of the Law Commission, which has done an extremely good job in that regard and on many other matters that have come before us.

I hope that a lot more of the Law Commission’s backlog of recommendations will be put through a similar procedure in short order. The Lord Chancellor indicated recently that he regrets the fact that there is still a backlog and that there has been no opportunity to put more before the House. It is time we did so, because it is pointless for such an extremely learned and capable organisation to make recommendations if we cannot find the time to legislate on properly.

I conclude by noting that the Minister and I have served on many Bills over recent years. I have not always agreed with every position she has taken, and she has not always agreed with every position I have taken, but I have enormous respect for the work she has done and I thank her on behalf of the House for the efforts she has put into the Ministry. I really hope that during the period when she is in charge nothing happens to make her regret her current position.

I hope the Bill can now pass.

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With leave of the House, Mr. Deputy Speaker, I shall reply quickly to the hon. Members for North-West Norfolk (Mr. Bellingham) and for Somerton and Frome (Mr. Heath). First, I thank them very much indeed for their kind words, which are much appreciated. I put on record my thanks to both of them and their colleagues, who have served on a variety of Bills with me. They have always been courteous and as supportive as they could be from their different positions. I very much appreciated that.

The hon. Member for North-West Norfolk asked what lessons had been learned. We certainly think the system is a much more effective tool for getting important but uncontroversial parts of the law through the House. I hope it will become a permanent solution and that, as the hon. Member for Somerton and Frome suggested, we will use it more often.

I have every sympathy with the hon. Member for North-West Norfolk about the length of time the measure has taken. For me, the most frustrating thing about being in government is how long it can take for a piece of legislation to get from point A to final implementation. The hon. Gentleman will understand the tenor of my remarks when I say that I hope he never has that experience. I appreciate that the time taken was not of the best; nevertheless such delay is not confined to this Government or to this period of office, and I hope the hon. Gentleman accepts that we are doing everything to try to reduce the delays and make sure that such legislation goes through more speedily using the new system.

Finally, the hon. Gentleman asked about the protocol. It is still being put together, but I hope we can publish it before the election, or perhaps during my period looking after the shop. I will make sure that the hon. Gentleman and the hon. Member for Somerton and Frome have sight of it as soon as possible.

Question put and agreed to.

Bill accordingly read the Third time and passed, without amendment.