Director of Market & Public Affairs
Civil Liability Bill: From the Lords to the Commons
The Civil Liability Bill has finished its passage through the House of Lords. It was not a smooth journey with the Government having to fight hard to keep the package of whiplash provisions together (see our Report Stage client alert here). However, Lord Keen, for the Government, managed to stave off all major attacks to the Bill. The result is that concessions to Part 1 (on whiplash) have not significantly changed the premise or intention behind the reforms.
Part 2 (on the discount rate) attracted far less criticism. Indeed, the general consensus in the House of Lords seemed to be, if anything, that it needed changing even more quickly than the Government originally set out, but with less frequent reviews (now to be every five years, not every three).
So whilst we know that the Commons can still make changes, where do things currently stand? We have set out the updated position below:
The first review of the discount rate
The time periods in relation to the first review are:
- The Lord Chancellor has 90 days to commence the review. This starts running the day that the Bill receives Royal Assent.
- The Lord Chancellor has 140 days to complete the first review and announce a decision (not 180 as previously indicated).
- The expert panel will no longer be involved in the first review of the rate. However, the Lord Chancellor must consult the Government Actuary and the Treasury. Timing wise:
- The Government Actuary must be consulted within 20 days of the start of the 140 day period.
- The Government Actuary must respond 80 days after the consultation request.
So when can we expect a change in the discount rate?
We expect the Bill to receive Royal Assent towards the end of 2018 or early 2019.
If, for example, the Bill receives Royal Assent on 1 December 2018, timings are as follows:
- The first review must be commenced by the end of February 2019 (latest)
- The first review must be completed by mid-July 2019.
So we could therefore expect a change in the discount rate in summer 2019.
It is very positive that there seems to be a general acceptance that the current discount rate and review process is not fit for purpose. Peers agreed that the present position does not reflect the reality of how claimants invest their damages.
It will be interesting to see how MPs receive Part 2 of the Civil Liability Bill. Whilst it is tempting to assume that the discount rate provisions will not cause them too much concern, the spectre of the Justice Select Committee report (recommending the involvement of the expert panel for the first review) is likely to feature in the debate at some stage.
In terms of Part 1 (whiplash), we can expect access to justice issues to feature quite heavily. On this issue more particularly, we anticipate the Justice Select Committee’s report on the small claims track limit to play a part in the discussions. Rory Stewart MP (the minister responsible for this Bill in the Commons) will need to work hard to successfully push back on the inevitable attacks from Labour MPs and Justice Select Committee members. Watch this space…