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Yesterday the Justice Committee of the Northern Ireland Assembly released its report following detailed scrutiny of the legislation designed to re-set the personal injury discount rate (PIDR).
The 172 page report was signed off at the Committee’s meeting on 21 October. As would be expected given the length of the document, all of the issues and arguments are thoroughly examined, but in reality, the key point to take away is that the Committee is content with the Bill as drafted and does not propose any changes to the text.
That will not, of itself, speed up the Bill’s passage through the Assembly. However the fact that the relevant scrutiny Committee has examined the topic and the text in close detail over the last seven months or so and is content with the provisions might reassure MLAs reviewing the Bill during Consideration Stage that it is fit for purpose.
The PIDR of -1.75% set this May under the current legislation and Wells v Wells principles is not, formally, part of the scrutiny of the new Bill but the report states that the Committee “is of the view that it [ie the Wells approach] no longer reflects how a claimant would be advised to invest their lump sum and therefore a new framework for setting the PIDR is needed [and the Committee also] understands the difficulties with the current rate in relation to potential over-compensation in many cases and the resultant economic and social ramifications.” There are eight passages in the report describing -1.75% as an “interim rate”.
The report observes that “defendants in personal injury claims that involve the use of the PIDR wanted the legislation to be completed by the Assembly as soon as possible given the rate under the new framework is likely to be somewhat higher than -1.75%.” Assuming the Assembly is not suspended or dissolved for any reason and bearing in mind that its current mandate ends in May 2022, the remaining stages of the Bill should be completed in the next few months and then its 90 day rate-setting period would begin. That would suggest a new PIDR could be effective from some around the beginning of the second quarter of next year.