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Personal Injury Law Journal: May 2017

Patrick Limb QC provides practical advice on how and when to make offers following the lowering of the discount rate

A week is a long time in personal injury litigation. On Monday 27 February 2017 came the ministerial statement announcing the lowering of the discount rate from 2.5% to minus 0.75%. The day following, there was a meeting between 13 CEOs of the insurance industry with the Chancellor of the Exchequer leading to a joint statement from the Chancellor of the Exchequer, Philip Hammond, and the Director General of the Association of British Insurers, Huw Evans. By Wednesday 1 March (as planned) there were questions of the Lord Chancellor who attended before the House of Lords, Justice Select Committee. On Thursday 2 March, there was publication of a consultation paper on a redress scheme for severe birth injury (the state, it may be noted, being the principal tortfeasor for such large claims); and the online publication of a highly instructive paper by Sir Henry Brooke on the origins of the statutory discount rate for lump sum personal injury awards.

After the discount rate cut, Paul Jones predicts increased legal disputes over interest on legal costs

While the legal and insurance professions come to terms with the slashing of the discount rate from 2.5% to -0.75%, the issue of interest rates on legal costs, while much less of a headline grabber, continues to be an important consideration for costs practitioners. Indeed, while the discount rate now languishes in the negative and the special account rate is not much better at 0.5%, the interest rate for legal costs judgments remains at a very healthy 8% where it has been since 1 April 1993. So how did this huge differential come to pass and what are its effects?

Paul Sankey investigates a decision in the Court of Appeal after it had applied the Montgomery test

The recent decision in Webster v Burton Hospitals NHS Foundation Trust [2017] is significant as the first Court of Appeal judgment applying the new law in relation to a doctor’s duty to advise, as set out by the Supreme Court in Montgomery v Lanarkshire Health Board [2015].

Duty of care; A&E; head injury; waiting times

In Darnley v Croydon Health Services NHS Trust [2017] the court looked at what, if any, duty is owed by a receptionist of an A&E department to a patient in respect of the provision of information. By a majority it was held that no duty is owed to provide correct information about waiting times.

Bill Braithwaite QC explains multipliers and the future of the discount rate in personal injury compensation

When I took silk I had time on my hands because I wanted to specialise in brain and spine injury – so I read Kemp & Kemp from start to finish – the narrative not all the case reports. David Kemp was a pioneer in personal injury, and it was his words in Kemp that started my interest in multipliers. My brother is an actuary, and one of his partners was on the Ogden Working Party. I had a long discussion with him, and that set me off on the right track. In those days most people either didn’t understand multipliers, or didn’t want to. I started writing and lecturing; there were two main topics – should we use actuarial tables and, if so, what discount rate was appropriate. I did loads of talks, with insurers and defence solicitors sitting in the front row shaking their heads! We won that battle, and use of the tables, and a rate of 4.5%, were established. That went to 3%, and then 2.5%, and now it’s down where it should be at minus 0.75%. Will it stay there? See below for my thoughts.

Jennifer Stone, Nick Leech, Andrew Sands and Nick Martin reflect on the implications of the change in the discount rate

In order to understand the current discount rate, it is useful to appreciate what has led us to this point. For a large portion of the last century, lawyers and judges were reluctant to utilise consistent calculations for the compensation for future losses. This created great uncertainty and arguably unfairness in awards of damages.

Nigel Spencer Ley reviews the effect of the new discount rate on accommodation cases like Roberts v Johnstone

Amid apocalyptic warnings from insurers as to the impact of the change in the discount rate, there is one small piece of good news for defendants: if the method for calculating damages for the additional capital cost of new accommodation set out in Roberts v Johnstone [1989] is applied strictly, a claimant purchasing more expensive accommodation as a result of their disability will have to pay damages to the defendant.