Earlier this year, we contrasted the media reactions to two significant legal developments as they unfolded.
The first, a long overdue correction to the ‘discount rate’ applied to the settlements in the most serious personal injury cases, had been debated and stalled for years but was met with shock and outrage from insurers and gathered headlines across news, business and finance pages in the national press.
The second, a fundamental change to a common law right to be compensated for injuries caused by another party, was whisked through consultation, past the Justice Select Committee and into a parliamentary bill in a matter of weeks, with barely a murmur.
Since then, a new Lord Chancellor has promised legislation that will allow for his successors to reset the ‘discount rate’ regularly, on the advice of a panel of diverse and independent experts. The parliamentary bill to establish the new mechanism has yet to emerge, and the insurance lobby is growing impatient.
However, David Liddington has revealed that it will maintain the principle of 100% compensation, will use “low risk” as opposed to “very low risk” investments as a benchmark and will review the rate every three years.
Among many measures in the Prison and Courts Bill which ran out of parliamentary time when the snap election was called, the ‘whiplash’ reforms made the headline summary of the Civil Liability Bill included in the Queen’s Speech. Clearly, neither piece of legislation is likely to find its way before parliament until well into 2018, which would make implementation next year unlikely. Such a timetable isn’t going to satisfy insurers though, who are already pressing the Lord Chancellor to adjust the ‘discount rate’ again, before the new process is established.
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