Civil Liability Bill [HL] — House of Lords, 2018-05-15
Topic: Law and Crime
Charlotte Vere (Conservative, Centre-right): My Lords, in speaking to Amendment 56 I will speak also to Amendments 57 and 57A Amendment 56 would require the court to consider certain factors when deciding in an individual case whether it would be appropriate to take into account a discount rate or rates different from that prescribed by the Lord Chancellor. Under new Section A1(2), introduced into the Damages Act 1996 by Clause 8(1), the court is not prevented from taking a different discount rate into account if any party to the proceedings shows that it is more appropriate in the case in question. This reflects the current law in the Damages Act 1996, although in practice the courts in England and Wales, following the decision of the Court of Appeal in Warriner v Warriner, have chosen not to exercise the current power to depart from the prescribed rate The effect of the amendment would be to direct the court to consider the two different sets of circumstances listed in the amendment when deciding whether to apply a rate different from the prescribed rate or rates in an individual case. How the consideration of the factors would operate to assist the court in reaching a decision in practice is unclear, but it appears that the factors mentioned are not intended to be exhaustive The overarching effect of the amendment would be considerably to complicate individual proceedings as it would open up the potential for a different rate to be applied much more frequently than at present. This would be likely to encourage disputes between the parties—for example, over whether a reasonable PPO offer had been made. This would create uncertainty in the law and could prolong litigation and impede settlements, as the parties in any individual case would be unclear as to what discount rate would be appropriate and might be unwilling to settle without a court ruling When in the March 2017 consultation we asked whether the court should retain a power to apply a different rate if persuaded by one of the parties that it would be more appropriate to do so, 96 of the responses to the question supported the retention of the existing power, with 23 against. These, in general, were concerned about the problems of uncertainty, inconsistency and delay if the power were to be expanded. These difficulties would only be increased if the amendment were adopted. We believe that it is desirable for the Lord Chancellor to set a rate that is generally applicable and is not constantly called into question in individual cases. This is the core benefit of a prescribed rate and it should not lightly be set aside Amendment 57 would specify that, in addition to the ability of the Lord Chancellor to specify different discount rates for different classes of case, different rates could also be specified for different periods and for descriptions of future pecuniary loss. We do not consider that the amendment is necessary. New Section A1(4) already prescribes that the Lord Chancellor may distinguish between classes of case by reference to, among other things, the description of future pecuniary loss involved and the length of the period during which future pecuniary loss is expected to occur. The Explanatory Notes state: "Subsection (4) makes clear that the power in subsection (3) to prescribe different rates of return for different classes of case includes the power to set separate rates for different sorts of future loss or for different durations of award. For example, under this power one rate might apply to damages for the first ten years and another rate to damages for subsequent years" I therefore reassure the noble Earl that the Bill already addresses the point he has raised Amendment 57A would ensure that the Lord Chancellor’s power to prescribe different rates of return for different classes of case could be applied to specify different rates for classes of case defined by reference to the anticipated scale of the award. New Section A1(3) provides that different rates of return may be prescribed under new Section A1(1) for different classes of case. New Section A1(4) clarifies that this power extends to defining classes by reference to heads of loss or duration of loss. This clarification is not exhaustive of the categories that the Lord Chancellor might adopt The power to set different rates of return for different classes of case is, however, already provided for, and the Lord Chancellor will decide whether to use the power to set different rates in the way that best delivers the objective of setting a prescribed rate. Such cases could indeed extend to the situation envisaged by the amendment, although this may be a difficult distinction to define and apply in practice. However, they could also be classed by reference to numerous other classes of case. It is, however, unnecessary to define what the classes may be. Given this, I do not think that the amendment proposed is necessary. On the basis of the explanation I have given, I hope that my noble friend will feel able to withdraw his amendment.