Personal injury lawyers are likely to find out next month whether the government is minded to revise the discount rate applied to damages awards. 

In a House of Lords debate last month, Conservative peer Lord Hodgson of Astley Abbotts said the Ministry of Justice will respond to its consultation on the issue by 3 August.

Hodgson tabled a motion of regret at then-lord chancellor Liz Truss’ decision to amend the rate from 2.5% to -0.75% before the consultation had even started. He said the action was 'draconian' and a sign that Truss did not understand, or was not briefed on, the full impact of the decision.

It was revealed during the debate that 135 responses were made to the consultation, which closed in May, but justice minister Lord Keen of Elie gave little away about the government's response.

'Underlying the consultation was the wish of the government to make sure that the way the rate is set is put on the firmest possible footing in future, so that we have a better and fairer system for claimants and defendants, and, in so doing, keeping true to the 100% principle—namely, that claimants are paid no more but no less than they should be,' said Keen.

'An announcement of the government’s conclusions will be made at the earliest possible opportunity. Of course, the interests of all parties concerned will be considered, and there will be an impact assessment.'

Keen insisted Truss acted correctly by changing the rate before consulting, saying this was her legal obligation. To fail to act, he suggested, would be to have 'knowingly maintained an inappropriate rate for what might have been a considerable period of time'.

Hodgson urged the government to act decisively on what he called a 'running sore' and insisted it was 'extraordinary' for the lord chancellor to change the rate now when none of her predecessors had felt the need to do so since 2001.

Speaking in the debate, former justice minister Lord Faulks said the position is now 'profoundly unsatisfactory' and he urged the rate be decided by a panel of experts rather than the lord chancellor.

He added: 'The situation that we now have is not fair to defendants; it is going to fall on those who have to pay increased premiums—often young and elderly motorists—and the NHS and government departments.'