Minister Flanagan launches consultation on the setting of the Discount Rate in Personal Injury Cases
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The Minister for Justice and Equality, Charlie Flanagan TD, has today launched a consultation seeking views on the manner in which the discount rate in personal injuries cases should be set.
The Cost of Insurance Working Group (CIWG) was established in 2016 to analyse the high costs imposed by insurance companies to determine what actions the Government might take to address any issues that might be contributing to these costs. The Group has undertaken two main research projects – an examination of the motor insurance sector and an examination of the employer liability and public liability insurance sectors.
In its report on the cost of Motor Insurance, the CIWG recommended (recommendation 24) that an examination of the setting of the discount rate be undertaken. Following the completion of that examination, the CIWG recommended that a public consultation be carried out on the issue. This consultation gives effect to that recommendation.
Minister Flanagan said:
"The discount rate, also known as the real rate of return, is used by courts to determine the size of an award necessary to compensate a person for damages for future loss. At present, the rate is determined by case law, although the Minister has the power under the Civil Liability and Courts Act 2004 to set the rate by Order."
The Minister is requesting views on two key issues as they relate to the discount rate:
The Minister stressed that:
"In engaging in this consultation my intention is not to change the fundamental principle that a claimant should be fully compensated but to ask a series of questions about what, if anything, needs to be done in order to update the current system of setting the discount rate.
"In particular, I am calling on academics and practitioners with a particular interest or expertise in this area of insurance law, to provide their input and help us to develop a system that will ensure consistency."
Submissions to the consultation must be made to discountrateconsultation@justice.ie by 5 August 2020.
ENDS
The Cost of Insurance Working Group (CIWG) was established in 2016 to analyse the high costs imposed by insurance companies to determine what actions the Government might take to address any issues that might be contributing to these costs.
The Group has undertaken two main research projects – an examination of the motor insurance sector and an examination of the employer liability and public liability insurance sectors.
According to the latest update from the CIWG, there has been significant progress in the implementation of the recommendations contained in the reports on motor insurance and employer and public liability.
Examples include the following:
These reforms are having a significant impact with regard to private motor insurance (CSO figures from April 2020 show that the price of motor insurance is now 29.2% lower than the July 2016 peak). It is important to continue working to ensure that those positive pricing trends can be extended to other forms of insurance, including those relevant to businesses.
The consultation Web Page and Information Document can be found here: www.justice.ie/en/JELR/Pages/Public_Consultation_on_setting_the_Discount_Rate_in_Personal_Injury_Cases.