LEGAL COMMENT: Delay in Ogden Rate changes
The UK's Justice Select Committee has recommended a delay to the implementation of reforms to the Ogden discount rate in a new report published this…
The UK's Justice Select Committee has recommended a delay to the implementation of reforms to the Ogden discount rate in a new report published this week (30 November 2017). MPs have requested more evidence before they can approve the reforms, which would set the rate between zero percent and one percent following a consultation launched in March.
David Johnson, partner and head of the political and market advisory team at Weightmans, commented:
“The JSC’s report doesn’t prevent Government from moving forward with much-needed legislation to amend the discount rate but the downside is that some of its proposals, if taken up, would create further delays in moving away from the current, problematic rate of -0.75%.
“Recommending that more empirical evidence is gathered about how and why claimants invest their lump sum damages is all well and good but there will be challenges in ensuring that that evidence is reliable. There is a valid concern that if the primary source of that evidence is claimant legal advisers or IFAs with links to such advisers, it risks being anecdotal and not especially objective.
“The recommendation that a yet-to-be appointed expert panel be involved in the first review of the rate means we’re highly unlikely to get a rapid review of the rate, even once the proposed legislation is introduced. That’s disappointing because the longer the period of delay before the next review of the discount rate, the longer compensators are left to deal with the inherently illogical and unjust -0.75% discount rate.”