On 5 February 2024, after a two-year stalemate, the Northern Irish power-sharing Government at last returned. Northern Ireland is no stranger to political deadlock, having experienced a previous three-year impasse between 2017 and 2020 with policymaking and future planning having been impacted as a result.
There is no shortage of issues that require to be addressed and the reappointed Minister of Justice voiced that significant legislation needs to be progressed, with reform of sentencing, a hate crime bill, and work on a modernised courts and tribunal service, making headlines.
However, what could the return of Stormont mean for the legal and insurance claims landscape in the jurisdiction?
It is anticipated that provision relating to minor settlements will be included in a Modernisation of Justice Bill in the first six to eight months of the Assembly’s return. This would provide for all cases involving a minor to be legally required to come to court for approval of the proposed settlement. Such change has been awaited for some time and was recommended as long ago as 2017 in Lord Justice Gillen’s Review of Civil and Family Justice in Northern Ireland.
The Government Actuary is to begin a review of the PIDR for NI on 1 July 2024 and the DoJ intends to consider whether or not adjustments to the method of calculating the PIDR are merited. The current rate in NI of -1.5%, set in March 2022, is significantly out of step with other jurisdictions, meaning that awards in NI are much higher in comparison. The net outworking of this is that claims awards may exceed indemnity limits, insurance premiums are increased, and the long-term viability of certain insurance companies writing insurance in NI could be called into question. The availability and affordability of a range of insurance products is essential for the people and businesses of Northern Ireland and this should be a priority for the Executive in coming months.
Insurers will be all too aware of damages inflation in NI in recent years, with the awaited new Green Book expected to formalise matters. Such damages increases mean that awards in NI are now significantly out of step with awards in England & Wales and the Republic of Ireland; both of which have seen reforms in recent years designed to reduce awards, reduce legal costs and address concerns from the insurance industry in respect of fraud and the sustainability of underwriting certain work in the respective jurisdictions. It is our view that victims of negligence should be appropriately compensated; however, awards for certain types and lengths of injuries are currently disproportionately high and legal reform similar to our neighbouring jurisdictions is required. This should, therefore, be on the agenda for ministers.
An updated Protocol for Personal Injury and Damage Only Road Traffic Accident Claims was published on 6 February 2023. The equivalent PAP for the High Court is also currently under review. There remain no costs sanctions or otherwise for failure to comply with PAPs and legislative change would be required for any such penalties to be applied. In our view, such change is necessary and should be considered by ministers as it would, in theory, reduce the cost of claims and reduce the number of cases coming through the court system, allowing court resources to be redeployed and case life cycles in civil courts to be shortened.
In 2021 there was a consultation with regard to increasing the civil jurisdiction of the County Court from its current limit of £30,000 to an anticipated level of £60,000. Such changes will be necessary given that increased damages awards mean that more claims than ever are litigating in the High Court and it is essential that there is adequate resource to hear cases and they are disposed of in appropriate time frames. While members have been advised that primary legislation is not required to increase the County Court jurisdiction, it was the Justice Minister who initiated the public consultation on this issue in 2021 and ministerial involvement could well be likely.
Costs in the NI County Court are determined by a fixed scale enshrined in legislation. These are meant to be reviewed every three years, but this has not happened since 2019 due to Covid-19 and the political impasse in NI. Given that reviewing scale costs and effecting amendments to rules takes some time, the County Court Rules Committee initiated a consultation and proceeded to put in train a review of scale costs in 2023. This was so that it is in a position to make any required changes to Court Rules and to invite the relevant authority to exercise the statutory function of allowing such changes once the Assembly has reconvened. We expect such increases to be made in the coming months now that the Assembly has returned.
Ministers will have a busy time ahead, and with the institutions restored there is now some hope that the claims and legal landscape in NI can eventually try to catch up with developments in neighbouring jurisdictions. There will, however, be no immediate solution, emphasising the need more than ever for NI to have a sustained period of political stability.
If you would like to discuss any of these topics further, please get in touch.
Megan McBrien, Partner
Email: mmcbrien@keoghs.co.uk
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