Lords amendment: No. 86, before clause 52, in page 48, line 33, at end insert—
J. At the end of section 148 of the Road Traffic Act 1972 (avoidance of certain exceptions to policies or securities, etc.) there shall be added the following subsections—
This relates to car sharing. Some people are still concerned that if they take money from passengers in car sharing that will invalidate their insurance. That is not the true position. Insurers gave full undertaking two years ago, and there have been no problems, but the other House decided that greater certainty was required, hence the amendment.
We welcome the amendment as helping to dispel doubts and worry. The undertaking will continue in force and goes wider than the personal injury liabilities with which the Road Traffic Act 1972 is concerned. I think that the amendment manages to clarify the position on car sharing, and anything that encourages car sharing is welcome to us.
I shall relieve Conservative Members by giving them advance notice that I shall discuss only Lords amendment No. 86 and not the other two. Lords amendment No. 86 changes the Road Traffic Act 1972 in a way that requires all those who drive cars on the road to have an insurance for car sharing. It prevents an insurance company from selling a policy to a driver in Britain unless that policy covers him for the car sharing provisions of the Bill.
I welcome the Minister's conversion to the idea that it is necessary to include such a measure, but I remind the House that when I raised this issue in Committee the Minister dismissed it in scathing terms. He accused me of raising unnecessary scares and suggested that there was no need for such a measure. I am glad that we have converted the Minister. I hope that we are at one, across the Chamber, in agreeing that it is necessary to have stated in our law requirements of insurance for the car sharing provisions of the Bill.
That leaves us with only two problems. The first is the way in which car sharing is defined. Would an insurance company be able to refuse a claim on the ground that the policy holder has been charging his passengers fares more than the amount necessary to cover running costs? That issue might never be resolved until the question goes to a court. Having abandoned the idea contained in the Bill on Second Reading that regulations should be made to describe what might appropriately be charged—I was critical of that provision, so I make no complaint that it has been abandoned—the Minister is now urging the House to accept a Lords amendment which still does not totally resolve the doubt, but leaves the matter open until an insurance company has to decide whether it will pay out a claim on a policy where a driver has undoubtedly been conveying passengers under the car sharing provisions of the Bill in all respects other than the amount of fare that he has charged. That will be decided on whether the insurance company takes the view that the fare was sufficient only to cover the running costs.
I suggest that the poor blighter whose policy is involved will not be likely to take the insurance company to court. If the insurance company will pay only a limited amount under the policy because it thinks that the driver is not covered by the terms because he charged too much for the passengers, the driver will be the sufferer, and he might face additional claims from his passengers.
Secondly, there is the question of whether premiums will be raised. If the insurance company comes up against somebody who can successfully contest the case and requires it to pay a claim for seven passengers in a major crash—the car sharing scheme can cover up to eight seats—a massive sum could be involved. That might lead to litigation, and the insurance company might have to pay the full claim. It would then have to decide whether premiums should be raised to cover that claim. If premiums are raised, under the terms of the Lords amendment premiums will have to be raised for every driver and not only for those who take advantage of the car sharing provisions of the Bill. While I welcome the amendment and shall not resist it. I suggest that we should be far from convinced that it will solve all the problems that arise from car sharing.