Horwich Farrelly Fraud Team in MOJ discussions

The paper circulated earlier this month raised issues concerning the drafting of the new rules, in particular the content of the proposed new rule 14 as regards the withdrawal of admissions of liability – especially in cases of fraud or suspected fraud.

Horwich Farrelly made representations to the ABI on this issue, pursuant to which it was decided that the proposed draft ought to be challenged given the potentially detrimental impact that the draft rules could have in restricting insurers’ ability to withdraw admissions of liability to only those cases in which they made a formal allegation of fraud.

There were concerns both in terms of unintended consequences and also the regulatory position of insurers as regards their obligations to combat fraud in accordance with the requirements of the Financial Services Authority and the offence of tipping off.

There was a meeting on the issue on 22nd January 2010 and we are delighted to confirm that it has now been agreed that the status quo ought to be maintained and that the potentially harmful draft rule 14.1B will simply be removed in its entirety.

We see this as a very positive result following our lobbying on the point.

The production of the draft rules

It was hoped that the meeting on 22nd January 2010 would see the draft rules signed off. Whilst we do not have formal confirmation of this, we would like to think that those rules would be available for consideration in the very near future. Once further information is available, we will of course be in contact again.