Ian Martyn, head of liability insurance at law firm Bond Pearce asks if the ELCI second stage report goes far enough
When I last wrote an article for this site, I outlined the main proposals put forward by the Department for Work and Pensions in its first stage final report on reforming employers' liability compulsory insurance (ELCI), and commented that the devil would be in the detail of the second stage report.
Well, last month (December) the government delivered on its promise by publishing the second stage report, but it remains disappointingly short on detail.
Minister for Work Des Browne outlined what he called an "agenda for action" on ELCI, but in truth it added little to the same agenda he published last June.
Browne acknowledged that too many businesses faced steep price increases, late renewals and premiums that failed to reflect their health and safety record, but the anticipated detailed reforms were still lacking.
Instead he vowed to work with stakeholders to introduce a programme of reform to encourage better health and safety in order to reduce the cost to business of injury, illness and absence; to improve rehabilitation and reduce the cost of resolving claims.
Longer term, the report also set out four specific proposals:
· Engage with stakeholders to evaluate further the evidence for separating long-term occupational disease risks from accident risks
· Work with the Civil Justice Council to consider the feasibility of a fixed fee scheme for employers' liability insurance claims
· Review the operation of any pilot scheme for small claims and if successful examine ways to extend such approaches to small and medium sized business
· Produce a Framework for Vocational Rehabilitation aimed at transforming the use of rehabilitation in the UK.
None of this, frankly, comes as any surprise, but the next six months could prove more interesting.
By March, ministers have pledged to review ELCI regulations relating to 300,000 of the smallest limited companies where the owner is the sole employee.
And by June, subject to feasibility, the government hopes to launch a pilot scheme for fast-tracking lower value claims. This could include provision for employers to seek legal advice to check that any proposed settlement is fair, but otherwise the insurer or employer would deal directly with the claimant.
Other developments include the publication this month of the FSA's decisions about renewal periods, which have been identified as an area of particular concern. The FSA is likely to demand more binding rules.
In April, as part of the move towards making it easier for insurers to assess risk based on health and safety records, the HSE will produce an index of health and safety management for small businesses, which is expected to be accredited by the ABI.
Despite the generally lukewarm reception given to the ELCI second stage report, what remains clear is the government's resolve to implement far-reaching reform. But in doing so, it will need to grasp the nettle more firmly than it has to date.
