NI discount rate: new Bill passes second stage but further progress unclear for now

Although the Damages (Return on Investment) Bill passed its second stage in the Assembly at just after half past three this afternoon, the scheduling of its Committee stage remains unclear and contested. We have already written about the evident tension between the Justice Minister and the Committee that was all too clear in pre-legislative hearings and was again present in today’s debate.

The Justice Minister explained that she was not seeking ‘accelerated passage’ for the Bill but rather, with the support of her Executive Ministerial colleagues, looking for a condensed timetable for the legislation so that the Committee stage scrutiny would end by 30 April. She maintained that keeping to this date would allow some rate-setting steps to be undertaken before the summer recess and a new rate then to be set later this year. However, the Justice Committee chair again pushed back on the proposal on timing and recorded his party’s objection to it. He also talked of producing a report showing the effect that expedition of this particular Bill would have on other Committee priorities.

Other Committee members speaking in the debate repeated their wish to conduct proper scrutiny of the Bill and its implications. Although it is a short Bill with only six clauses it does have wide ramifications and potentially significant financial consequences.

The Minister, while entirely supportive of the need for Committee scrutiny, pointed out that the Department’s duty is to deliver a legal framework providing 100% compensation; no less, no more, and as such it cannot take such matters into account in the decision making process. In fact, she noted that the political aspect was being removed from the rate-setting exercise in so far as the Bill was transparent on the detailed methodology to be applied and in designating the Government Actuary as the rate-setter (rather than leaving matters to broad Ministerial discretion as at present).

It seemed to me that the Minister put the case for expedition of the Bill well, with her strongest point being that fresh and quick legislation is the only way to resolve the current impasse blocking the resolution of claims. At the heart of that is the lack of a stable and certain discount rate.

Yes, there are good arguments about the need for close scrutiny of the Bill and reasonable concerns about the pressure on other Committee work if it is taken quickly. The irony is that the longer the scrutiny takes, the longer the uncertainty and the impasse for claimants and defendants alike.

The Deputy Speaker noted that the timetable question was not going to be put to bed today, after which the debate drew to a close. The Bill was passed and is now in the custody of the Committee, where the nettle of the speed of its scrutiny stage has to be grasped. The odds of it being completed by the end of April could hardly be said to be a racing certainty.


Alistair Kinley, Director of Policy & Government Affairs
alistair.kinley@blmlaw.com

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