Yet more on the discount rate(s) this week

There have been two interesting positioning interventions this week by Ministers in England & Wales and in Scotland.

In England & Wales, Justice Minister Lord Keen was interviewed on BBC Radio 4 on Friday and said that the Civil Liability Bill “will get Royal Assent probably next week”. When that happens the 230 day (maximum) period for setting a new discount rate will automatically start to run. All other things being equal, that means that a new rate would be in place by early August 2019 at the latest. In the run-up to leaving the EU on 29 March next year, all other things are far from being either equal or being business as usual, but even so it is not clear if the uncertainty around the UK’s relationship with the EU has a direct and material bearing here. It may not.

In Scotland, Ministers issued this fairly short response to the recent Committee report on the relevant Bill, i.e. The Damages (Investment Returns and Periodical Payments) (Scotland) Bill. This response has deliberately been made available before the Stage 1 debate on the Bill next Tuesday (18 December) in Edinburgh and confirms that:

  • there will be an amendment to move the frequency of rate reviews to five rather three years (five years being already set out in the English legislation)
  • Ministers are unlikely to accept the argument for a statutory presumption for periodical payments, and
  • they disagree with the Committee’s idea – which had been put to it by pursuer interests – of exploring using the rate applying when the claim was raised rather than that in force on the date on which the damages are determined.

It obviously follows that there will be more to report on both fronts next week.

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Authored by Alistair Kinley, director of policy and government affairs

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