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.
Today is six months on from the announcement by then Lord Chancellor David Gauke on 15 July 2019, that the discount rate in England & Wales would be re-set, using new powers in the Civil Liability Act 2018, at -0.25% with effect from 5 August 2019. In the ordinary course of things this rate should apply for five years and should then be reviewed. What has or has not happened in the six months since the Lord Chancellor’s decision?