Apil's Brett Dixon on how the future discount rate could be skewed

Brett Dixon, president of the Association of Personal Injury Lawyers

  • The Justice Select Committee recommended to involve a panel of independent experts in the first review of the discount rate
  • The government first agreed but then removed the panel, explaining it wants to hasten the review because the current rate entails “extreme” costs to the NHS
  • David Gauke wants to set the rate himself as Lord Chancellor but the head of the judiciary is actually the Lord Chief Justice

A panel of independent experts needs to be involved in the first review of the discount rate, argues Brett Dixon, president of the Association of Personal Injury Lawyers.

Even if the Civil Liability Bill passes through its next few stages unchanged, there will still be much to play for when thrashing out the detail during the implementation process. But there are certain things on the face of the Bill which must be addressed now.

For the sake of administering justice for injured people, a panel of independent experts needs to be involved in the first review of the discount rate. The Justice Select Committee made such a recommendation, which the government accepted but which it later agreed to remove. An amendment to reinstate the panel in the first review during committee stage last month was unsuccessful.

According to the government, the motivation for removing the panel from the first review process is to make a change in the rate as quickly as possible. During the committee stage debate in the House of Commons, Justice Minister Rory Stewart said that the need for speed is to mitigate the “extreme” costs to the public purse by compensation paid by the NHS to injured patients.

The NHS is simply paying what it always should have, of course. And if catastrophically injured people are undercompensated, the NHS will have a further burden on its finances. When compensation runs out, the State – in the shape of the NHS – picks up the shortfall in meeting care needs. So not only will the health service pay the bill for its own negligence, but for that of other compensators as well. It will foot the bill for employees paralysed at work and people suffering brain damage in tragic car crashes, even though employers and drivers have paid premiums to insure themselves for the cost of personal injuries. It is in the NHS’s interest for the rate to be set accurately.

There can be no justification for replacing a process that requires accuracy with one focusing on speed. The first review after the Civil Liability Act comes into effect will, arguably, be the most important because it will be the first to take place under the new framework. It is inexplicable to think such a task could be undertaken without the involvement of appropriate expertise. Leaving the experts out of any review of the discount rate undermines the point of appointing them. The panel should ensure that the reviewed rate is based on up-to-date independent evidence on the investment behaviour of injured people. Without it, the rate potentially could be skewed in favour of a political decision.

Justice Secretary David Gauke has said that the rate will be set by him “as Lord Chancellor in his own right, and not on behalf of the government”. But since the Constitutional Reform Act 2005, the Lord Chancellor is no longer head of the judiciary and his or her responsibility to respect the rule of law is no different from that held by every other government minister. The Scottish government has said, in terms, that the decision should not be a political one. Despite this, the government in Westminster has decided that “someone” needs to hold accountability for the discount rate. The irony is not lost on me. Accountability did not help when the rate was left untouched for 16 years and out of date for many. It took judicial review proceedings by the Association of Personal Injury Lawyers against the holder of that accountability to force the responsibility to be upheld.

Report stage is the last chance for the government to do what it already knows is right and restore the role of the independent expert panel in the first review.

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