Justice minister Lord Keen of Elie (Richard Keen QC) may have been too ambitious in expecting discount rate reform in early 2018, the Gazette understands.
Keen told a justice committee evidence session on Thursday that he hoped legislation would come into force by the early part of next year, with the lord chancellor fixing a new rate as soon as possible thereafter.
In minutes published following the meeting, Keen clarified that the government intends to ‘legislate promptly’ to make sure the rate set is on the ‘best possible footing’.
Now it has emerged that civil servants have told the Association of Personal Injury Lawyers the rate will actually be reviewed and subsequently changed by the end of 2018 or start of 2019.
The weekly APIL newsletter stated that officials told the organisation that Lord Keen had not meant to give the earlier date in parliament.
Practitioners want some certainty over the level of the discount rate, which calculates what reductions – if any – should be made to personal injury awards to take account of potential investment returns.
The rate changed from 2.5% to -0.75% in February on the orders of then lord chancellor Liz Truss.
But the government almost immediately initiated a call for further evidence and in September announced it would seek to change the law and therefore revise the rate again.
Lord chancellor David Lidington said the rate would be set by reference to rates of return on ‘low risk’ rather than ‘very low risk’ investments as at present, with the new figure set to be ‘in the region of 0% to 1%’.