Last week, the Justice Committee of the Assembly held a further hearing with officials from the NI Department of Justice (DoJ). The debates and questioning moved forward from the indications given at the previous hearing on 22 October (i) that the Department proposed to accelerate the passage of legislation to set a new legal framework for the discount rate and consequently did not intend to set an ‘interim’ rate using the 1996 Act and (ii) that Members’ (MLAs) initial view was to resist accelerated passage. The view among MLAs looks now to have hardened against accelerated passage for the new Bill, which could be a real problem for the DoJ in delivering a rate based on a new framework in the second half of next year.
In addition, and over the shorter term, Members raised serious concerns about the DoJ’s decision not to adopt an interim rate, in response to which the officials accepted that that option would likely have to be reconsidered if the progress of the proposed new Bill was seriously imperilled. It was also confirmed that four letters of claim relating to potential judicial review proceedings challenging the DoJ’s decision to bypass an interim rate had been received by the Department.
This is a necessarily brief summary of a lengthy and not-always-easy exchange between MLAs and officials. The upshot of it is that there is now a good deal less certainty about the prospect of proceeding some time in 2021 straight to a new NI discount rate based on either the English or Scottish models and a commensurate increase in the risk of a low rate, derived from the 1996 Act and Wells v Wells principles, being set in the interim.
We expect further developments over the next few weeks and will keep the blog up to date.