Discount rate reduction
The Lord Chancellor’s announcement on 27 February 2017 to reduce the discount rate from 2.5% to minus 0.75% surprised those representing both claimants and defendants. Whilst all parties anticipated it would fall, it was not expected to be a reduction of this magnitude. The last 10 days, since the announcement, has seen a flurry of activity with claimants seeking to withdraw Part 36 Offers and defendants accepting them out of time.
The Lord Chancellor, when making her announcement on 27 February 2017, indicated she would be publishing a further consultation on the discount rate, and in particular, will review the framework under which the rate is set and whether it remains fit for purpose for the future. The significant discount rate reduction may, of course, be short lived with an increase following this consultation. Few anticipate the discount rate remaining at minus 0.75%.
This is subject to the Chancellor not freezing the discount rate at 2.5% until after the Lord Chancellor’s consultation.
As we approach 20 March 2017 we explore the following issues now facing those dealing with CAT claims:
- Withdrawal and acceptance of Part 36 Offers
- Impact on CAT claim damages reserves
- How do we deal with Robert v Johnstone?
- Periodical payment orders now only option?
- Can defendants use s1(2) Damages Act 1996 to dis-apply the discount rate in “exceptional” cases?
Contact: Mark Burton
Extension of fixed recoverable costs
The Department of Health has published a consultation seeking views on the government’s proposal to introduce a mandatory system of fixed recoverable costs (FRC) for clinical negligence claims valued up to £25,000. The consultation will close on 1 May 2017. Meanwhile, Lord Justice Jackson is leading a wider review of FRC to help to inform the government-led consultation to extend FRC to further areas of civil litigation. The terms of reference include consideration of the value of claims to which such a regime should apply. The call for evidence closed on 30 January 2017. Jackson LJ is to submit his report by 31 July 2017. While Sir Rupert is sticking to his £250,000 upper limit, soundings (including from other members of the judiciary) suggest a more modest figure of around £100,000. Realistically, October 2018 seems a likely date for implementation.
Contact: Christopher Malla
Related item: Fixed recoverable costs: mixed news for defendants
Rapid resolution and redress scheme for severe birth injury
The Department of Health has published an open consultation seeking the views on the proposed investigations into severe avoidable birth injury and the support and compensation scheme. The consultation outlines the government’s proposal to introduce a Rapid Resolution and Redress (RRR) scheme – as recommended by the 2016 National Maternity Review. The government also intends to use the consultation as a call for further data and evidence, including, in particular, from families affected by serious birth injury, clinicians, patient groups and those involved with the litigation process. The consultation closes on 26 May 2017.
Contact: Rob Tobin
Reforming the claims process: increase to small claims limit
Justice Secretary Liz Truss has unveiled the Prisons and Courts Bill, which aims to modernise the court system and further enhance the United Kingdom’s status as a world-leading centre for dispute resolution. Key measures within the legislation include a new fixed tariff to cap compensation payments for minor injuries arising from a road traffic accident (RTA). The small claims limit for RTA-related claims will rise to £5,000 and to £2,000 for other personal injury claims. The reforms are expected to be introduced as a package on 1 October 2018.
MPs on the justice select committee have since launched a "short" inquiry into the personal injury reforms contained in the Prisons and Courts Bill, which received its second reading on 20 March 2017. The justice committee has invited written submissions of no more than 3,000 words to address issues including: the definition of whiplash; and the impact of raising the small claims limit to £5,000 for road traffic accident-related whiplash claims.
Contact: David Froome
Transforming the justice system
The Ministry of Justice has published “Transforming our Justice System”, a paper proposing approximately £1 billion of reforms to the justice system to meet the aim of automating and digitising the entire process of civil money claims in the civil courts by 2020. The proposals seek to speed up resolution by replacing paper and post with digital working and to look at options to extend fixed recoverable costs much more widely. The consultation closed on 27 October 2016. Meanwhile, Justice Minister Sir Oliver Heald has promised a review of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) by April 2018.
Contact: Ed Glasgow
Confidentiality guidance: good practice in handling patient information
The General Medical Council has published revised guidance on disclosures to support patient care. The updated advice sets out the framework for disclosing personal information, as well as doctors’ responsibilities in relation to managing and protecting information – including with regard to sharing personal information with third parties. The updated guidance comes into effect on 25 April 2017.
Contact: Rob Tobin
Read other items in the Personal Injury Brief - March 2017