§ Sir J. Mellorasked the Chancellor of the Exchequer what "knock for knock" agreements have been entered into with insurance companies; and in what terms?
§ Sir K. WoodUnder a "knock for knock" agreement proper, each party undertakes to make no claim against the other in connection with any collision in which both parties are interested, provided that the material damage on either side does not exceed a prescribed financial limit which usually varies from £100 to £200, but to bear in full the amount of the damage in which it is interested. Under a "halving agreement" the amount of the damage in which the parties are interested is aggregated and shared equally, provided that the damage on either side does not exceed a prescribed financial limit of the same order. Under a third party agreement the cost arising out of a third party claim is shared equally by the two parties, subject to a prescribed financial limit not being exceeded which in this type of agreement is most commonly between £1,000 and £2,000. Agreements on these lines have been entered into with many insurance companies and other bodies (such as transport undertakings) on behalf of all the vehicle-using Departments. These agreements are beneficial to both parties; the work arising from collisions and legal and other costs are greatly reduced.