Holiday sickness claims and fixed costs

The minutes of the Rule Committee’s February meeting show some progress on holiday sickness claims. The core idea to extend fixed recoverable costs to these cases has been on its agenda since late last year, following the Ministerial announcement last year.

Proposed changes to fixed costs (CPR Part 45) seek to apply PL costs to these cases. A relevant pre-action protocol (PAP) is still in draft form – very probably based on the general personal injury PAP – and being worked up between the Committee and the Civil Justice Council. Some CPR points also need clarification, for example the application of Part 36 offers and the overlap with small claims (Part 27).

The recently published February minutes strongly suggest that the intention is still to bring the changes into force this April. Minutes are not yet available from the 2 March meeting and the next meeting takes place on 13 April. Given that a statutory instrument – which has to follow a defined Parliamentary timetable – is required to change rules on procedure and costs, there is some possibility that the proposed introduction of fixed costs for holiday sickness claims in April 2018 could slip. We will report any further developments soon as we can.

Co-written by Alistair Kinley, BLM’s director of policy and government affairs, and partner Sarah Hill

Personal injury discount rate to change to minus 0.75%

The Lord Chancellor (LC) Liz Truss bit the bullet today and set the discount rate at minus 0.75%, to apply from 20 March. The news was issued via this statement to the Stock Exchange at 07:00 this morning. As a matter of process, Ms Truss should be congratulated for not ducking a very awkward decision – even if the financial implications of her decision are of huge importance for new and current outstanding cases alike. As to substance, views will inevitably differ hugely.

The lowered rate (it’s decreasing by a staggering 325 basis points from 2.5%) has attracted notable criticism this morning from insurers because of its inflationary effect on awards and reserves. The LC said today that she “recognise[s] the impacts this decision will have on the insurance industry. My Rt. Hon. Friend the Chancellor will meet with insurance industry representatives to discuss the situation.” It could be expected that that might be a fairly high-tempered discussion.

Continue reading

Commons Justice Select Committee – oral evidence session on whiplash reforms

On 7 February, the Justice Select Committee heard evidence from the Association of British Insurers represented by James Dalton, Director of General Insurance Policy, and the Association of Personal Injury Lawyers represented by its President, Neil Sugarman into the proposed whiplash reforms set out in the Ministry of Justice’s consultation issued in November 2016.

Continue reading