Towards the end of 2016 it was announced that the Lord Chancellor would announce the result of the Discount Rate review by 31 January 2017. Initial coverage of this also featured on the BLM Policy Blog.
This morning the Lord Chancellor informed the market that the review of the Discount Rate for personal injury claims has taken longer than anticipated and whilst a new date has not yet been announced, the MoJ has made it clear that the Lord Chancellor "remains committed" to making an announcement in February.
BLM will continue to monitor developments and provide further comments in due course. In the meantime, the following text which featured in our December update may serve as a useful reminder about what the decision could mean for you.
What this means for you...
The decision may reflect some or all or none of what was consulted upon. If changes are made, and in particular to the discount rate the timetable for legislative implementation could be very short. Existing claims will very likely be caught. Insurer provisions may need reviewing or implemented into case reserves. There may also be some consequences for risk assessments as to acceptability of settlement offers or how some aspects of outstanding claims should be approached tactically. Although not suggesting that a reduction in the rate will arise (and there are many arguments for the alternative) BLM has provided some initial thoughts as well as indication of the impact on annual costs. Further updates will be issued as the outcome becomes clearer.
For further information on the Discount Rate, you can read our December briefing note here, prepared before this morning's update.