Personal Injury Discount Rate and Periodical Payments Orders in Scotland: Damages (Investment Returns and Periodical Payments) (Scotland) Bill passes stage 3

On 19 March 2019, the Scottish Government Minister for Community Safety told the Scottish Parliament that she expects this Bill “to save defenders money”. This can perhaps be taken as a Scottish Government indication that the new Personal Injury Discount Rate (PIDR) for Scotland will be higher than the present -0.75% one. Given the prescriptive formula set by the legislation and to be applied by the Government Actuary, this government indication has to be treated with some caution.

The Civil Liability Act 2018 does not apply to Scotland. On the same day that the Lord Chancellor announced the first PIDR review for England & Wales under Part 2 of that Act – 19 March 2019 – the Scottish Parliament completed their consideration of the Bill which sets a different methodology for PIDR-setting in Scotland.

The review now underway for England & Wales will end no later than 5 August 2019. It remains unknown when the first 90 day review for Scotland will begin. That is because a legislative competence check, Royal Assent and a ministerial commencement order are first needed.

The Scottish Bill also empowers Scottish Courts to impose a Periodical Payments Order (PPO) whether the parties consent or not. The legislation requires the court to always consider a PPO solution, in whole or part, whenever awarding damages for future pecuniary loss in respect of personal injury.

The key developments at Stage 3 are:

  • A court must “have special regard to the pursuer’s needs and preferences” when deciding whether to make an award by PPO in whole or part as opposed to a lump sum.
  • The standard, downwards, adjustment for tax & investment charges has been increased from 0.5% to 0.75%.

We have updated the PIDR table which first appeared in our 13 March 2019 blog to take account of the latest Scottish position. That is shown here:

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Rachel Rough, Partner, BLM
rachel.rough@blmlaw.com

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