25th June 2014 MoJ get your Act together

When does Act of Parliament ("an Act") become Law?

Some may assume that in a democracy an Act would become Law either immediately or shortly after it has been approved by Parliament. Unfortunately they would be wrong.

Wikipedia suggests that it would be once Royal Assent has been granted. It states "Royal Assent is the name for the method by which any constitutional monarch formally approves an act of his, her or their nation's parliament, thus making it a law or letting it be promulgated as law." This appears to be correct if one briefly considers the "Passage of a Bill" section in Parliament's own website.

However, hidden away at http://www.parliament.uk/about/how/laws/acts/ it is stated "The practical implementation of an Act is the responsibility of the appropriate government department, not Parliament." In other words, Parliament could pass an Act and this could receive the Royal Assent but not ever become Law because of agendas of unelected officials in a government department. Surely this is only theoretically a problem but in practice wouldn't be allowed to happen?

As long ago as 25 March 2010 the Third Parties (Rights Against Insurers) Act 2010 ["the 2010 Act"] received Royal Assent and this still has not come into force. If the 2010 Act comes into force, then this will make changes to the Third Parties (Rights Against Insurers) Act 1930 ["the 1930 Act"] to make it easier, quicker and cheaper for a Claimant to claim damages from the insurer of an insolvent or dissolved company.

Under the 1930 Act, the rights to use the insurance policy transfer from the insolvent company to the Claimant but the Claimant must establish their claim through Court proceedings to obtain rights under the insurance policy. The rights that are transferred are of the insolvent company and therefore the rights from which the Claimant may benefit under the insurance policy are only as good as the insolvent company's rights under the policy. In practical terms a Claimant would need to go to the expense of restoring the dissolved company to the Companies Register, successfully pursue the claim through Court proceedings and provide appropriate notice to the insurers in accordance with the insurance policy before getting the compensation to which they are entitled.

The 2010 Act, if ever introduced, will modernise the Law by taking into account the variety of insolvency procedures which companies may nowadays be subject to and it will:

• Provide the Claimant with the right to information about the insurance policy before liability has been established;
• Transfer rights under an insurance policy to the Claimant;
• Allow the Claimant to pursue a claim without having to restore the dissolved company to the Companies Register; and
• Remove some technical defences.

It seemed that Parliament had intended to speed up and simplify the claims process and reduce costs.

In April 2013 the Ministry of Justice stated that they would amend the Act and bring it into force "as soon as reasonably possible". In December 2013 Lord McNally, speaking in the House of Lords, said the position had not changed since that update.

It is outrageous that sensible legislation that has been passed by Parliament is significantly delayed (or as in this case does not come into force at all) when there appears no legitimate reason for such a delay. Perhaps it would be time for an Act to automatically become Law within a specified period from the date that that the Act was approved by Parliament. This would prevent ridiculous delays and failure to implement legislation and could remove the need for any royal involvement in the passing of legislation (ie remove the need for Royal Assent).






Peter Lyons, LL.B (Hons.), Solicitor

Head of Industrial Disease, Industrial Disease Department

Peter joined Woodward Solicitors in September 2013. For Peter's professional profile please see - here.