Officials from the NI Department of Justice gave evidence this afternoon on the way forward following consultation over the summer on the mechanism for setting the personal injury discount rate. There are two significant developments:
- First that the officials indicated that on balance the Department had concluded it would not proceed to reset the existing rate based on the 1996 Act, ILGS yields and Wells v Wells.
- Second is that the Department will seek to introduce legislation quickly to deliver a new legal framework for setting the discount rate.
Over three days this week the Court of Appeal heard – remotely – the test case challenge to the current basis of valuing awards for the additional costs of suitable or adapted accommodation in claims arising from serious injuries. The calculation features use of the personal injury discount rate and, since that is negative at present, it produces (mathematically at least) ‘no loss’ for the claimant. The claimant in Swift v Carpenter argues this is unsatisfactory and therefore seeks a new approach.
We are nearing the first anniversary of the personal injury discount rate (PIDR) being set in England & Wales last July using a new legal framework which broke the link that lasted more than two decades between the PIDR and the investment returns on Index Linked Government Stock (ILGS). That notional link remains valid as regards the current PIDRs in Ireland and Northern Ireland. However, on 10 June the Irish government launched a consultation on a possible new legal approach to rate-setting and is seeking views by 5 August. In Northern Ireland it appears likely that a similar consultation could begin in the next few weeks.