The Compensation Act 2006
New laws regulating unscrupulous claims companies and aiming to reduce the fear of litigation for those engaged in what are deemed to be 'desirable activities' have received Royal Assent. Under the Compensation Act 2006, both the regulation of so called 'claims firms' and changes affecting negligence decisions will help to ensure that those with valid claims find it easier to bring their actions.
Firstly, parts of the Compensation Act 2006 are specifically aimed at claims firms which, until now, have been able to operate without regulation. Sharp tactics used by such firms have included aggressive advertising and the use of hard-sell tactics such as canvassing passers-by in the street.
The new laws will set up a regulatory regime by spring 2007 which will monitor the claims industry and attempt to ensure that clients are dealt with honestly. Individuals who continue to offer 'claims management services' without the proper authorisation could face imprisonment for up to 2 years. These changes will not affect solicitors, whose professional standards will continue to be regulated by the Law Society.
Secondly, important adjustments will be made by the Act as to how the laws of breach of statutory duty and of negligence will operate in certain circumstances. As a result, the courts will in future be able to take into account the possibility that 'desirable activities' may be curtailed or prevented by a positive finding of liability. These changes are aimed at activities such as school trips etc. which, though worthwhile and thought to be socially useful, are becoming increasingly rare owing to the perceived risk of litigation should an accident occur.
Thirdly, clarification is provided by the Act on the effects of apologies and offers of redress. These are not to be considered admissions of liability. This is a further attempt to reduce the adversarial nature of injury claims.
Finally, the Act will also make it easier for those who have contracted mesothelioma as a result of exposure to asbestos at work to bring claims against their employers. This change comes after the Government committed itself to reversing a recent House of Lords’ decision that responsibility for the damages payable should be apportioned amongst all those responsible, according to the degree to which they contributed to the chance of the worker contracting the disease. Under the Act, employers are to be jointly and severally liable for any compensation due to employees who have suffered injury as a result of exposure to asbestos fibres by more than one employer.