The Civil Liability Bill, which will reform the way the personal injury discount rate is to be set in future, has now completed its passage through the House of Lords and has reached the House of Commons.
Civil Liability Bill amendments
The bill has undergone two amendments during its three readings in the House of Lords, both in relation to timescales. The first amendment will allow the first review of the discount rate, which will undoubtedly increase it from minus 0.75%, to begin within 90 days of the bill receiving Royal Assent without the need for a specific commencement order – a minor amendment which signals the government’s intention to expedite the first review as soon as the bill becomes law.
The second amendment extends the maximum period between mandatory ongoing reviews of the discount rate from three years to five. Justice Minister, Lord Keen of Elie, explained the proposed extension of the review period as a potential way of reducing attempts to “game the system”, in which litigants try to delay or speed up claims settlements and trials to take advantage of current or anticipated discount rate benefits. Speaking in the House of Lords at the Parliamentary committee stage of the bill’s journey towards enactment, former Justice Minister, Lord Faulks QC, a practising clinical negligence and personal injury lawyer, also referred to an accumulation of anecdotal evidence of gaming the system which is already occurring in anticipation of the expected discount rate increase with its inevitable lowering of multipliers and damages awards. He feared that such manoeuvring will take place almost continuously if the three-year review period is maintained, leading to an increase in unsettled claims as parties apply to adjourn or accelerate hearings to coincide with more favourable discount rates. The government argued that more frequent reviews would result in smaller, incremental changes which, in turn, would remove the need for parties to ‘game the system’, but conceded an extension of the review period to five years.
Discount rate change affects seriously injured claimants
The inevitable increase in the discount rate and consequent reduction of future loss awards for seriously injured claimants will undoubtedly profit the insurance industry. The Ministry of Justice has already asked insurers for their commitment to pass on the benefit of their financial gains from the new discount rate to their customers. Whether and to what extent the insurers will do so remains to be seen.
Sadly, Boyes Turner’s personal injury team have had recent experience of defendant insurers trying to delay settlement of serious injury claims in the hope that delays will reduce the claimant’s compensation.
In clinical negligence, NHS Resolution have not resorted to such behaviour and Boyes Turner’s clinical negligence team continue to achieve high value awards for our severely disabled clients.
The Civil Liability Bill will now make its way through the House of Commons with the potential for further amendment, before finally being enacted as law.
If you or a family member have suffered serious injury as a result of medical negligence contact our specialist medical negligence solicitors by email: firstname.lastname@example.org.