UKP issued a new UK MoJ call for evidence on the personal injury discount rate (PIDR).
Follows UK MoJ Jan. 2023 consulted on the option of dual/multiple rate, see #160671.
Statement Overview
The Parliamentary Under Secretary of State for Justice, Lord Bellamy, announced the publication of Setting the Personal Injury Discount Rate: A Call for Evidence process.
This call for evidence is intended to obtain evidence to inform the second review of the Personal Injury Discount Rate (PIDR) made under the current Civil Liability Act 2018.
The PIDR is important in ensuring that claimants who suffer serious, life-changing personal injuries receive full damages, including for their future financial needs.
It is the percentage figure used to help calculate how much a compensator, usually an insurer or body such as the NHS, will pay to any claimant, in the form of a lump sum.
It is assumed claimants will invest the lump sum and accrue a return on investment and PIDR represents what the real rate of return on this investment is expected to be.
The Civil Liability Act 2018 introduced changes to the way PIDR is reviewed and set, and this is second review under that methodology, and the first where Lord Chancellor will consult with the Expert Panel he has appointed, as well as as with the UK Treasury.
The responses to this call for evidence will inform the work of the Expert Panel and the Lord Chancellors considerations in undertaking the review of the PIDR later this year.
The Lord Chancellor will formally consult the Expert Panel in due course and inform both Houses, in line with the timetables set out in Part 2 of the Civil Liability Act 2018.
The Parliamentary Under Secretary of State for Justice, Mike Freer, announced the written Statement from Lord Bellamy, on the same day, in the House of Commons.
A list of consultees already approached for call for evidence is included in documents.
Effectiveness
The call for evidence on setting the PIDR will now close at 11:59pm on Apr. 9, 2024.
Jul. 2024 Lord Chancellor's Statement
On Jul. 18, 2024, UKP published statement by Lord Chancellor re 2024 PIDR review.
The review, initiated on Jul. 15, has commenced; follows statutory requirements to consult expert panel and UK Treasury; responses expected within 90 days.
Review must conclude by Jan. 11, 2025, after which outcome will be announced.
Dec. 2, 2024 Outcome
On Dec. 2, 2024, UK MoJ issued outcome details following call for evidence feedback.
The UK GVT response document summarizes the submissions received from stakeholders but does not include any specific policy proposals or commitments.
Response shared with expert panel and was considered along with evidence and analysis in forming advice to Lord Chancellor, who announced new discount rate.
Issued Damages (Personal Injury) (England and Wales) Order 2024 (StIn 2024/1261).
On the same date, UK GAD reported that the Lord Chancellor has determined that the rate is to be changed from -0.25% to +0.5%, effective from Jan. 11, 2025.
Dec. 4, 2024 Lord Chancellor's Statement
On Dec. 4, 2024, UK MoJ issued the statement, of Dec. 2, 2024, on the determination of the personal injury discount rate, which comes into force on Jan. 11, 2025.
Made by Lord Chancellor and Secretary of State for Justice (Shabana Mahmood MP).
Notified UK LSE that an instrument would be laid to change discount rate applicable to personal injury lump sum compensation payments in England and Wales to 0.5%.
A detailed statement of reasons explaining the decision on this rate will be placed in the libraries of both houses and published on gov.uk, along with a full advisory report.
