Two setbacks for any new discount rate in NI?

Yesterday the High Court in Belfast heard a judicial review challenge to the Department of Justice’s (DoJ) decision not to strike an interim personal injury discount rate (PIDR) while new legislation on rate-setting proceeds. Later that afternoon the Justice Committee discussed the timetable for the new legislation, as a result of which the Bill now looks unlikely to conclude before the year end.

The essence of the judicial review challenge against the DoJ is that the failure to set an interim discount rate falls short of its obligation to monitor the law in this area and ensure that it provides 100% compensation, no less or no more. Although judgment was reserved yesterday, we would expect a decision in the next few weeks.

Not long after the hearing finished, the NI Assembly’s Justice Committee met in Stormont, barely six miles from the High Court, to discuss the timetable for its scrutiny of the new Damages (Return on Investment) Bill. The Bill is the vehicle by which the DoJ is aiming to re-set the PIDR and on Tuesday passed its second stage debate in the Assembly Chamber.

The Committee has, to date, been hostile to proposals to take the Committee stage of the Bill as rapidly – by end of April – as has been suggested by the DoJ. Although Committee members appear to want to move as quickly as possible, while balancing other priorities, the Chair indicated there was no chance of this stage being concluded before the summer. Members then resolved that the short Assembly recess for Hallowe’en should be the long stop for their Committee stage scrutiny. That is more than seven months off.

The final legislative stages which would follow the conclusion of the Committee stage are likely to take several weeks, after which the rate-setting mechanism of the Bill would kick in. As it provides for up to 90 days for completing the analysis (which will be carried out by the Government Actuary) required to set a new PIDR, it does look quite unlikely now that a new PIDR would be in place this year.

This new timetable – which is to be ratified formally by the Committee next week – adds further delay to the ultimate resolution of this important topic and further uncertainty for claimants and defendants in cases in which the PIDR is a relevant factor.

With the lengthening of the Bill’s timing, the decision in the judicial review claim is very likely to be the next significant development. If that were to go against the DoJ it could bring further confusion for parties to litigation and for those advising them. We will keep you posted.

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

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