In evidence today to the Justice Committee, the Justice Minister and her officials summarised the content of the recently finalised Damages (Return on Investment) Bill. The text of the Bill is not yet publicly available but – based on today’s oral evidence – it will follow the approach adopted in Scotland. Subject to any future amendments, this means that:
- the rate-setting task will be assigned to the Government Actuary rather than a Minister
- the notional low risk investment portfolio, the return on which the discount rate will be based, will be set out on the face of the Bill
- the return on the portfolio will be adjusted to take account of inflation and prescribed adjustments of 0.75%, for tax and investment advice, and of 0.5%, as a margin against under-compensation, will also be made
- one area of divergence from Scotland is that the investment period to be assumed is 43 years rather than 30 years
- the GA will have 90 days following commencement of the legislation, when passed, to complete the rate-setting exercise
- the rate will then be reviewed in summer 2024 (at the same time as in Scotland) and thereafter every five years.
The Minister is pressing for the new legislation to secure accelerated passage through the Assembly. She indicated that a new rate could be in place by the autumn on that basis. That seems to be an optimistic assessment in itself and it looks even more optimistic in light of the Committee’s strong resistance to accelerated passage. We will look at this aspect in a further post in the next couple of days.