Personal Injury Brief market insights - March 2022
A summary of key developments including the UK Government’s plans to reform the Human Rights Act, the Civil Justice Council’s interim report on pre-action protocols, latest CPR updates, the newly announced discount rate in Northern Ireland, the Government’s response to the ‘Protect Duty’ consultation, and an update on the guideline hourly rates introduced last year.
UK Government unveils its proposals to reform Human Rights Act
The UK Government’s consultation, ‘Human Rights Act Reform: a Modern Bill of Rights’, makes far-reaching proposals for new legislation which aims to strike a proper balance between individuals’ rights, personal responsibility and the wider public interest.
The Government’s report summarising the responses is expected in June 2022, 12 weeks after the consultation closed. Should the Government decide to proceed with its proposal for a new Bill of Rights, time will be needed to draft the wording of the Bill. The Bill will then be introduced in either the House of Commons or House of Lords for examination, discussion and debate. When both Houses have agreed on the content of a Bill, it can be presented for Royal Assent and become law.
Related item: UK Government plans to reform Human Rights Act
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Are the pre-action protocols fit for purpose?
Last year, the Civil Justice Council (CJC) published an interim report for consultation on the subject of pre-action protocols (PAPs). The report canvasses a number of reform options including formally recognising that compliance with PAPs should be mandatory, requiring parties to complete a joint stocktake report/list of issues as a final step before the start of proceedings, and introducing a new general PAP.
Kennedys collaborated with The Forum of Insurance Lawyers in order to submit a wider response on behalf of the defendant insurance market relating to personal injury, professional negligence and construction matters.
Following the conclusion of the consultation on 21 January 2022, the CJC Working Group will draft a final report for consideration by the Civil Justice Council, likely in the Spring of 2022.
Related item: What role should pre-action protocols play in the civil justice system?
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Rule changes: latest CPR updates and consultations
A sub-committee of the Civil Procedure Rule Committee (CPRC) chaired by Mr Justice Kerr is conducting work to simplify the CPR, focussing on drafting amendments rather than substantive changes over the course of 12 to 24 months. Drafting proposals are being published for comment before changes are introduced.
- On 1 October 2021, the CPRC announced the first consultation concerning CPR 10 (acknowledgment of service) and CPR 12 (default judgment).
- On 14 December 2021, the CPRC announced the next consultation on proposals to simplify CPR 2 (application and interpretation of the rules), CPR 3 (the court's case management powers) and CPR 4 (forms).
- On 16 February 2022, the CPRC announced its third set of proposed reforms concerning CPR 7 (how to start proceedings) and CPR 8 (alternative procedure for claims).
The latest update to the CPR coming into force on 6 April 2022 includes a new CPR Part 10 and deletion of the Practice Direction in relation to acknowledgment of service.
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New Northern Ireland discount rate announced
The Damages (Return on Investment) Bill received Royal Assent on 2 February 2022, and on 22 March 2022 the Department of Justice confirmed that a new discount rate of -1.5% has come into effect. This means that Northern Ireland continues to have the lowest discount rate in the UK.
According to the Department, “the discount rate remains low as a result of high expected inflation in the short to medium term, low expected interest rates in the longer term and the anticipated returns on bonds and equities remaining low”. This will be disappointing news for insurers and compensators.
The next review of the rate will be in July 2024.
UK Government to introduce anti-terror ‘Protect Duty’
The UK Government has published its response to the ‘Protect Duty’ consultation, which sought stakeholder views on a requirement for certain publicly accessible locations to implement security measures. Earlier this year, Home Secretary Priti Patel announced that legislation will be brought forward in 2022 that will strike the right balance between public safety, whilst not placing excessive burden on small businesses.
For all businesses operating in the public arena, this development means they should develop or revisit their counter-terrorism measures, paying specific attention to how best to manage and mitigate the identified risks. This will in turn impact decisions businesses make about insurance cover.
Related items: UK Government confirms new anti-terror duty on venues
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An update on hourly rates
We are now almost six months on from the implementation of the increased Guideline Hourly Rates (GHR) and their impact is slowly beginning to be felt by paying parties and other stakeholders, at least at the CMC/costs budgeting stage where it seems that the new GHR are becoming the new baseline. It also seems a more robust approach to hourly rate recovery is being taken by larger firms, although anecdotal evidence to date suggests that even then, there is a compromise to be struck, perhaps as some firms prioritise increasing cashflow.
A key concern of stakeholders before the implementation of the rates was how the courts would apply them to cases that had been compromised or where work had been undertaken many years prior. Unfortunately, and whilst not a complete surprise given the body of case law since 2019, it seems to be accepted that the rates are the appropriate reference point, at least for work carried out after 2019.
As was anticipated, and as was the primary focus for Master Brown in TRX v Southampton Football Club , successful challenges to hourly rates may now require a focussing on the correct construct of the legal team, ensuring that tasks and overall conduct are undertaken only by those with the commensurate level of requisite experience. It seems likely that disputes over hourly rates will now move into this space.
In many ways: plus ça change. The hourly rates that are allowed on assessment will ultimately still be determined upon close analysis of the wider facts and circumstances of individual cases, and we expect there will still be a significant divergence in outcomes between different courts and judges in the coming months.
Co-authored by Daniel Money, Costs Draftsperson, Sheffield.