Next month, the personal injury discount rate (PIDR), applied to lump sum compensation awards for future care and loss of earnings in Northern Ireland, will decrease from 2.5% to (-)1.75%.
When we last reported on the PIDR situation in Northern Ireland, in edition 324 of BC Disease News (here), we previewed an impending judicial review intervention against the Department of Justice (DoJ), brought by Derry-based road traffic accident victim, Paul McCrossan.
If successful, we revealed that this action would frustrate the devolved Government into setting a drastically lowered interim rate before a new rate calculation methodology could be established through the Damages (Return on Investment) Bill.
On 29 March, The Irish Times shared that Mr. McCrossan’s High Court action had been halted, with no need for judgment to be handed down, as the DoJ had reversed its decision not to implement temporary rate alteration.[i]
Justice Minister, Naomi Long MLA, announced that after ‘careful consideration’ of the ‘significant change’ in expected timescale for the Damages Bill, the Department reviewed its original position, with the (-)1.75% rate being ‘consistent with the current legal framework’ – this will be enacted through secondary legislation, on 31 May 2021.
Expanding on delays experienced in attempting to steer legislation through Stormont, she stated:
‘I had hoped that legislation under the Damages Bill could be enacted by summer 2021 and a rate set under the new framework by autumn 2021. To that end I sought to bring accelerated passage of that Bill through the Assembly. However, an expeditious passage of the Bill through the Assembly has not proved possible’.
We forewarned our readers that this could be the case when we disclosed that Ms. Long’s proposals had been described as ‘shabby’ and ‘a disgrace’ by Ministers attending the Committee for Justice (CfJ) meeting, on 19 February, who were concerned that close scrutiny of the Bill was being put at ‘significant risk’ by ‘condensed’ scheduling.
In anticipation of the upcoming 31 May milestone, the Association of British Insurers’ (ABI) Head of Public Policy for Northern Ireland, Alastair Ross, expressed his ‘surprise’ and ‘disappointment’ in the fact that Northern Ireland will have the ‘lowest discount rate in the world’:
‘The Department of Justice is persisting with an outdated and flawed methodology to calculate the personal injury discount rate, when the priority should be continuing its efforts and endeavouring to set a modern fit-for-purpose discount rate system for Northern Ireland’.[ii]
[i] 'Thousands to benefit' from change in how personal injury compensation calculated’ (29 March 2021 The Irish Times) <https://www.irishnews.com/news/northernirelandnews/2021/03/30/news/-thousands-to-benefit-from-change-in-how-personal-injury-compensation-calculated-2271628/> accessed 6 April 2021.
[ii] ‘Personal injury discount rate to be set to -1.75 per cent’ (26 March 2021 Irish Legal News) <https://www.irishlegal.com/article/personal-injury-discount-rate-to-be-set-to-1-75-per-cent> accessed 30 March 2021.