Imminent second Call for Evidence on personal injury discount rate in England and Wales expected

At a stakeholder event on 28 November 2023 hosted by the Ministry of Justice (MoJ), the focus of a second Call for Evidence on the personal injury discount rate (PIDR) in England & Wales was discussed. This will likely be launched in December before the Christmas recess. It is anticipated that the period for submitting responses will be three months, although it was indicated that this may be shortened slightly.

The Call for Evidence will be similar to the previous one held in January and as before, the MoJ and Expert Panel are looking for data rather than opinions on the preferred model or rate(s). Stakeholders will be asked to offer data and evidence on the following topics:

1. Damages awards.
2. Heads of loss.
3. Damage inflation.
4. Mortality experience.
5. Sufficiency experience.
6. Investments.
7. Tax costs.
8. Investment costs.

Notable additions not included in the previous Call for Evidence include new dedicated sections on:

1. The claimant universe – aimed at identifying the representative claimant. The MoJ want to know about the number of claims, values and whether 43 years is still a reasonable life expectancy assumption. They are keen to further understand how different heads of loss manifest over time, such as care costs.
2. Investment strategy – the MoJ is seeking information on what assets should be included in a low-risk portfolio (i.e. asset mix, distribution between different assets) and how these vary based on the size of the award and time periods. They will also seek evidence on the advice claimants receive on investing their lump sums and how this advice (and investment strategy) changes over time in response to different economic and financial circumstances.
3. Splits by heads of loss.
4. Splits by duration.
5. Availability of periodical payments in practice.

We do not anticipate the Call for Evidence to put forward suggestions/recommendations as to the preferred PIDR model/rate(s), but rather will focus on gathering as much data as possible to assist the Expert Panel with advising the Lord Chancellor.

Emphasis was placed on providing data and supporting evidence in response to the questions in the Call for Evidence. All evidence submitted will be provided to the Expert Panel. The MoJ and Expert Panel are in discussion as to other data and evidence that may be useful but not necessarily forthcoming by way of a Call for Evidence, and are keen to hear suggestions as to which stakeholders/organisations could be approached to assist with relevant data e.g. charities.

Other PIDR developments

Whilst not part of the discussion at this MoJ event, earlier this month it was announced that the PIDR in the Isle of Man has been increased from –0.25% to +1%.

The Scottish Government and the Department of Justice in Northern Ireland are due to publish separate responses by the end of the year following a joint request for views on the PIDR systems published in June.

Related items:

• Personal injury discount rate: a global snapshot
• Personal injury discount rate in England and Wales: exploring the options
• Government response to Personal Injury Discount Rate Call for Evidence: an overview and next steps
• Northern Ireland and Scotland launch personal injury discount rate calls for evidence