The Association of Personal Injury Lawyers (APIL) has reacted angrily to confirmation from the Ministry of Justice (MoJ) of a further delay to the review of the discount rate for personal injury cases.
“Rather than just review the rate as promised, and as he should, the Lord Chancellor has now decided to delay the process further by recruiting a panel of experts to help him,” John Spencer, president of APIL, said.
Mr Spencer said it was three years since the Lord Chancellor told the Administrative Court that his decision would be made “as promptly as practicable”, after APIL launched judicial review proceedings.
“Establishing a panel just creates yet another delay while the Ministry of Justice is seen to be doing something,” Mr Spencer said.
“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 different”.
Mr Spencer added that APIL wrote to the Lord Chancellor in July this year about the discount rate and was prepared to start a fresh judicial review if necessary.
In a letter to Mr Spencer, the MoJ said that a review of the discount rate was “in the course of being undertaken” by the Lord Chancellor.
“The Lord Chancellor has decided, given the complexity of the issues, that it would be appropriate to ask a panel of three experts to provide expert investment advice to assist him in that review.
“It is envisaged that each expert will provide input from a particular area of expertise: the first in relation to the financial management of investments; the second in relation to actuarial issues; and the third as an academic with knowledge of relevant financial services market issues.”
The MoJ added that it would be “premature for the Lord Chancellor to pre-empt what his decision will be” by varying the rate before receiving the expert advice.
The ministry published research into the discount rate in September last year which contradicted the idea that claimants tended to invest lump sum payments less cautiously than it was assumed.