The Government are still no closer to make the crucial decision regarding the future of the discount rate.
Two years on from the closing of the original consultation regarding the rate, Justice Secretary, Chris Grayling, has continued the process of dragging his heels over the issue, by appointing a new panel to advise over the question of the rate, on which the deductions are based.
It has been a frustrating issue for the personal injury sector over the past few years, one which the Justice Minister is unapologetic for, as he displayed in an open letter to the Association of Personal Injury Lawyers, insisting that there was no need for a timetable in regards to a decision.
APIL themselves, who have called for the rate to be decreased, have criticised the Government over their hesitance in finding a solution over the discount rate and the affects it has on personal injury claimants moving forward.
The President of APIL, John Spencer, responded to the news, saying: “People with life-changing injures continue to miss out on the right level of compensation to cover their needs while the Government drags its heels on rectifying the problem.”
“Rather than just review the rate as promised and he should, the Lord Chancellor has now decided to delay the process further by recruiting a panel of experts to help him.”
He also lamented the fact that Chris Grayling had gone back on his word that his decision would be made as ‘promptly and practical as possible’ stating: “The promised decision never materialised so we wrote to the Lord Chancellor in July, urging him to review the discount rate. APIL was prepared to start a fresh judicial review if necessary.”
“Establishing a panel just creates yet another delay while the Ministry of Justice is seen to be doing something. Meanwhile, injured people continue to have their damages unfairly docked by a discount rate which was set 13 years ago when the financial markets were very difficult.”
Scott Rees & Co Partner, David Byrne, supported the views over the Government’s delays and lashed out at the Government for failing to keep to their original promises when it came to personal injury reform.
He said: “It is simply not good enough that this issue is still rumbling on nearly three years on from when it was first raised.”
“It is clear that the real losers in this are genuine claimants, who are currently having their damages cut based on a discount rate that is 13 years old.”
“When reform across the industry was discussed, the government expressed their commitment to preserving access to justice and the best interests of those genuine claimants. Yet since reform has actually been implanted we have seen these promises, consistently broken.”
“It is unacceptable that the discount rate has not been moved forward with the times and that we are using the financial markets of 13 years ago to base the discount rate on.”
“The time has come for the government to shape up and commit to what they promised, instead of ways to further delay making a decision.”
Of course defendant lawyers and insurance companies are also anxious for the Government to make process on the issue as they have recommended an increase on the rate.
The panel will consist of three financial investment experts and they will be asked to review the evidence put forward to the consultation, which was brought to a close back in October 2012.
Once appointed, they will be expected to bring differing viewpoints based on their area of expertise, although it hasn’t yet been confirmed who the three experts will be.
The consultation regarding the discount rate can be viewed here.