25 April 2017

The Ministry of Justice has advised that any external talks that would follow the ongoing Discount Rate Consultation will now be put on hold, pending the general election.

Whilst the Consultation will continue to run until 11 May 2017, with further correspondence being welcomed by the MoJ after the consultation, it has been confirmed that no external talks will take place until after the general election on 8 June 2017.

This follows the decision by the Government to drop the Prison and Courts Bill due to time constraints caused by the impending general election. The Bill (which does not directly apply to Scotland) seeks to, amongst other things, reform how whiplash claims are dealt with and was the most likely vehicle to introduce any reforms to the discount rate following the consultation. The likelihood is that the Bill will be resurrected in the new Parliament but for now, the Bill has been put on hold.

The Director General of the ABI, Huw Evans, commented on the news by saying:-

“We did not expect the Bill to be pushed through before the election and are pleased it hasn’t as this would have removed the main opportunity to get a fair reform of the Discount Rate. Aspects of the whiplash provisions were also unsatisfactory, so it is better these didn’t make it onto the statute book unresolved. The task now is to win the argument for both issues to be dealt with as a priority in the new Parliament so there are no major delays to much needed reform. Issues like the increased cost of insurance for motorists and businesses and the £6bn bill for the NHS are not going to go away, so the incentives for a new Government to act promptly are there.”

Ultimately, the news will have the effect of slowing down progress of the discount rate review. Given its far reaching implications, however, it is to be hoped that it should allow for a careful and detailed review of the discount rate.

The ongoing consultation can be found here https://consult.justice.gov.uk/digital-communications/personal-injury-discount-rate/  Responses are invited by 11 May 2017.

If you require further information about this update, please do not hesitate to contact: