The legislation providing a new legal basis for the personal injury discount rate (PIDR) was finalised yesterday (it received Royal Assent). We now move to the (up to) 90-day period allowed by the statute for the Government Actuary to carry out the analysis described in the legislation to set a new discount rate. GAD may be able to complete that well within 90 days.
All other things being equal, we would expect a new rate to be higher than the -1.75% rate introduced last year using the old approach. It may well turn out to be a slightly lower negative number, much like the prevailing English and Scottish rates of -0.25% and -0.75% respectively. It is not for us to make a prediction about the level of the new PIDR in NI, although we could go as far as saying that it could be relatively close to the latter (ie: Scottish) given that the analysis GAD is required to perform under the new NI legislation is heavily modelled on that required of GAD under the Scottish Act.
The risk of the Assembly collapsing and causing the loss of this legislation – meaning no new rate could be set – has been a constant during its passage. Although fast-evolving developments in NI politics could see the Assembly being dissolved imminently, there now appears to be a form of legislative ‘safety net’ in place – that being the Northern Ireland (Ministers, Elections and Petitions of Concern) Bill – which should ensure continuity of certain political functions in that event.
Despite Royal Assent yesterday, there nevertheless remains some uncertainty surrounding the successful delivery of a new PIDR. This a key topic and one which we will, as ever, continue to monitor extremely closely.