Yesterday’s budget marks just over two years since former Chancellor George Osborne announced, in his 2015 Autumn Statement, significant reforms to damages for whiplash claims and five-fold increase in the small claims limit for road traffic injury cases. Material released by the Treasury yesterday appears to indicate that Government expects to implement these reforms before April 2019.
- Following the Budget last week, we can take it as confirmed (if it needed to be) that the Chancellor of the Exchequer will not or cannot change the new rate.
- In such circumstances, he “has set aside £5.9 billion across the forecast period [to] protect the NHS from the effects of the changed personal injury discount rate”.
- The new rate of -0.75% will apply in England & Wales from 20 March unless there is a successful attempt to annul the relevant statutory instrument, SI 2017/206.
- A motion to annul this SI has been indeed been tabled, but as it has been signed by only six MPs – all Lib Dems – it looks to be going precisely nowhere*.
- This intervention by Conservative MP Jacob Rees-Mogg during the Budget debate last week – “I would encourage the Government not to proceed with the personal injury discount rate reduction to minus 0.75%.” – very probably adds no weight at all to that motion.
- However, the basis on which the new rate was derived looks set to change. A different approach could apply from some future date because the Lord Chancellor has unambiguously said she “will bring forward a consultation before Easter that will consider options for reform”.
- Our expectation is that this consultation will begin within days of the new rate taking effect, given that Parliament will rise for Easter on Thursday 30 March.
* It is virtually unknown for these to succeed. The last to do so was a generation and a half ago, according to this from the Commons Library: “The House of Commons last annulled a statutory instrument on 24 October 1979 (the Paraffin (Maximum Retail Prices) (Revocation) Order 1979 (S.I. 1979/797)).”
Written by Alistair Kinley, director of policy and government affairs