Discount rate panel appointed

The Ministry of Justice has announced that the panel to advise the Lord Chancellor on setting the discount rate for personal injury damages has now been appointed and is to provide the Lord Chancellor with its recommendations within the next six months.

The membership of the panel is as follows:

  • John Pollock of Pollock and Galbraith, actuaries – who will consider rate issues
  • Mr Richard Cropper of Personal Financial Planning (PFP) Ltd – who will consider what services and advice is given to claimants
  • Dr Paul Cox of the Department of Finance, University of Birmingham – who will consider the working of the financial services market and the economic cycle

The discount rate has been set at 2.5% since 2001; however since then there have been significant changes in the financial markets leading to claimant representatives to call for the discount rate to be reduced.

Indeed in the recent case of Russell v Health Service Executive [2014] IEHC 590 the Irish High Court dropped the discount rate to 1% on the basis that yields from Index Linked Government Stocks have dropped to zero since the financial crisis. Applying this new rate would lead to a sharp increase in insurers’ costs of catastrophic injury claims and consequently in the premiums charged. It will also increase the financial burden on the NHS.

SARAH in force

The Social Act, Responsibility and Heroism Act came into force on 13 April 2015.

The Act has noble intentions and will require courts to consider the context of an action that is the subject of a liability claim; hopefully allowing people to carry out good deeds without worrying about the risk of liability should something go wrong.

However, there has been much opposition to the Act on the basis that legislation does not alter the current law of Negligence (such actions arguably failing within the Compensation act 2006 in any event) and the concepts it contains are hard to define in practice.

Lord Faulks, on behalf of the Government, has argued that requiring courts to consider whether defendants had acted generally responsibly with regard to the safety of others does represent a change in the law.

It is yet too early to determine how Act will operate in practice, although it is to be hoped that it will genuinely offer further protection to defendants acting in a socially beneficial way.

Ban on inducements extended

Section 58 of the Criminal Justice and Courts Act 2015 came into force on 13 April 2015 and introduced a ban on offering a benefit as an inducement to make a claim for damages for personal injury or death.

An offer of a benefit to another person will be considered an inducement if the offer is intended to encourage that person to make a claim, or to seek advice from a regulated person with a view to make a claim, or is likely to have the effect of encouraging the person to do so. The ban applies to barristers, solicitors and legal executives.

This provision closes a loophole by bringing lawyers into line with that of claims management companies, who were banned from offering inducements to personal injury claimants in the Legal Aid, Sentencing and Punishment of Offenders Act 2012, and accordingly is to be welcomed.

Further court fee increase likely

Following the increase in Court fees in March, the Government has undertaken a further consultation in relation to proposals to increase application fees. The proposals include raising the fees for a general application in civil proceedings: to GBP 100 for a consent application (from GBP 50) and GBP 255 for an application on notice (from GBP 155).