A “slight Nelsonian wink” about the discount rate?

There has been a good deal of media coverage recently about possible legislation to change the present discount rate of -0.75%. While this may well have been generated by briefings by insurers and others it is worth noting, however, that there is no concrete progress towards that as yet.

The House of Commons rises tomorrow (20 July) and nothing is going to happen over the summer break, save that the Ministry of Justice may publish the synthesized results of its latest discount rate consultation which began just after the new rate had been set and which closed in mid-May.

That consultation indicated that the Government would publish the results by 3 August, but the date could slip a little due to the general election and the change of Lord Chancellor and Secretary of State for Justice, with David Lidington replacing Liz Truss.

Speaking yesterday in the Lords, MoJ Minister Lord Keen said that “an announcement of the Government’s conclusions will be made at the earliest possible opportunity … the interests of all parties concerned will be considered, and there will be an impact assessment.​” Progress of sorts, perhaps, but the deliberately equivocal phrase “at the earliest possible opportunity” is far from a commitment by the Government to a clear timetable. His remarks came during a short debate (50 minutes) on a ‘motion of regret’ about the change to -0.75%. The motion is just a device to probe for views.

There was little new in the brief debate, although a few speakers indicated that they thought that the yet-to-be-published Civil Liability Bill should be how legislative reform in this area is taken forward. We had said on the day of the Queen’s Speech that such an approach looked quite likely, given the Government’s widely-drafted summary of the Bill (see blog post here). Lord Keen did not deal with this point directly, but a Peer commented: “I thought I got a slight Nelsonian wink that we might expect some developments in this ​area.”

Certain parts of the intervention of former MoJ Minister Lord Faulks QC show his views to be quite close the general thinking among insurers that the link between the personal injury discount rate and ILGS is no longer appropriate and that a new approach to the notional investment of damages, and hence the discount rate, is needed. He said: “There may be some internal mathematical integrity about the exercise, but it bears little relation to the proper approach to the assessment of damages … I suggest that the approach to the proper measure of damages, looking to the future, should not be on the basis of an entirely risk-free approach – it should be on the basis of a cautious investor, or something of that sort.”

The discount rate remains a key priority issue and one which we continue to monitor closely. We will report on any further developments as and when.


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Alistair Kinley, director of policy and government affairs at BLM

“The Ministry of Justice pursued an overly ambitious and high risk strategy anyway”

The history of Government-led IT projects is hardly sparkling. Today’s report from the National Audit Office provides another example to add to the long ‘room for improvement’ column. The NAO examined the history and delivery of an offender tagging project and reached the conclusion that forms the title above. It also added that the Ministry’s approach was “not grounded in evidence, and failed to deliver against its vision.”

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Extending the scope of QOCS protection

The basis of QOCS is that the protection it affords against adverse costs applies to unsuccessful claims for personal injuries. These are conventionally argued in negligence against the defendant whose conduct caused the accident e.g. the negligent driver or employer. But should a statutory claim against an organisation which was not the tortfeasor be regarded as a claim for damages for personal injuries protected by QOCS?

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