Compensation Bill unlikely to be rushed through unless government responds to criticisms

The Compensation Bill is in crisis after a leading body of MPs rejected one of its major clauses as "redundant".

The Constitutional Affairs Committee slammed proposals to add a statutory definition to the law of negligence.

The committee, which has been meeting with key industry players to discuss the Bill since it was published in November, said clause one of the Bill was "redundant and should be scrapped".

Clause one says courts must consider the desirability of an activity in determining whether a duty of care has been breached.

Only last month the government rejected demands for a tighter definition of the proposed "desirable activity" defence.

The criticisms strike at the heart of the Bill, which was originally intended to provide a framework under which claims management companies would be regulated.

It now appears unlikely the government will be able to rush the Bill through Parliament unless it responds to the criticisms.

The Association of Personal Injury Lawyers (Apil) said the Constitutional Affairs Committee's findings were to be "applauded".

Denise Kitchener, Apil chief executive, said: "Clause one, if it remains in the Bill, is likely to cause confusion and further unwanted debate about what the law means.

"What is actually needed is education, not legislation, about how the law works."

Dominic Clayden, Norwich Union's technical claims director, told Insurance Times he had "reservations" about how clause one would operate.

Although supportive of the government's aims, he said the clause "may create short term difficulties and a period of uncertainty" potentially increasing costs.

The ABI said it was "neutral" on the clause, but it hoped the committee's report would spark a lengthy debate about the Bill's restrictive nature.

ABI director general Nick Starling said: "Wide ranging reform of the personal injury compensation system is needed.