A response to the consultation over the personal injury discount rate – which was controversially cut back in March – was postponed by the Ministry of Justice last week, after it missed the August 03 deadline it had given itself to outline plans.
On Friday, in the same week that insurers were announcing mid-year financials, the government said it would be pushing back on revealing its position regarding the future of the Ogden rate, but did not say why or when a response would be published – leaving many scratching their heads.
According to the director of policy & government affairs at insurance law firm BLM, the delay in announcing the post-consultation response is due to a storm of the election effect, a change in government ministers, and the complex nature of the rate itself.
“The consultation [which ran from March to May this year] commenced before we were on election footing, so that, I think, has had an impact,” Alistair Kinley told Insurance Business.
As a result of the election a new Lord Chancellor was appointed, with David Lidington replacing Liz Truss, which Kinley cited as another contributing factor.
“He’s going to probably need to be briefed as to what’s going on in his department and to get comfortable with the way things are going, to understand what’s at stake and what decisions need to be taken. That may have taken a little bit of time,” the director commented.
“This is also a very tricky area, and a very technical area,” Kinley said, pointing out that the government had around 135 responses to the consultation. “There will be a lot of material for civil servants to look through and sift, and to advise ministers as to what to do.”
With all of those factors likely to have played a part in the delayed response, Kinley anticipates that the government will reveal its response sometime during Autumn – particularly with Brexit looming.
“I don’t know when that will be, but if this area needs legislation, and we think it does, then realistically that legislation probably needs to get going before the year end, because it will take a few months to be debated, and obviously as we get through into 2018, bills do need to be concluded because there’s an awful lot of parliamentary time that will be taken up with all the Brexit stuff,” he explained.
Though he stressed that there was “no certainty” on the matter, Kinley said that it is unlikely that we will hear anything in the next few weeks, thanks to Parliament’s summer recess, but said an announcement could be likely before Halloween.
He added: “My feeling is there’s a window for some legislation here, but the government needs to think about that, and maybe that’s taking a bit of time too.”
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