Meeting of the Parliament 18 December 2018
I, along with my colleagues, welcome this stage 1 debate on the bill. Suffering personal injury is never expected. No one ever wants to have to claim compensation for injuries that have been caused by wrongful behaviour. Through no fault of their own, individuals can find themselves in the midst of a confusing legal framework that does not always work in their favour.
It goes without saying that the framework for such cases must not only be in place, but must operate as clearly and fairly as possible—most definitely for the pursuer, but also for the defender. That is how we can ensure that those individuals are treated sensitively and by a credible system.
We can see that the current personal injury discount rate needs improvement. With a lack of frequent reviews, we have a process that can seem ambiguous and unclear to pursuers and defenders in civil action cases. I hope that the introduction of the bill will see a helpful adaption of how the personal injury discount rate is calculated, with careful consideration of periodical payment orders and how best to set the rate of return.
I offer my appreciation for the work of the Economy, Energy and Fair Work Committee on the bill and generally. The committee’s insightful analysis of the bill has offered the scrutiny that is needed. I hope that its recommendations will help to further mould the bill and make an end result that works for everyone.
I have no doubt that the elements contained in the bill are well intentioned. Making the current calculations for allocating compensation fairer and more efficient is clearly necessary. The process for claimants can be technically murky, especially when they face what can be a very stressful period of uncertainty. We know that few personal injury cases need a discount rate to be applied, but it is still fundamental that the legal framework is absolutely clear for individuals and their family members, not to mention for defenders and their representatives. Making the legislation as clear as possible is in everyone’s interests.
The bill will modernise exactly how compensation will be calculated, and I support that. It allows for adjustments to be made to the discount rate and opens the possibility for PPOs to be changed in certain circumstances. Although there are varying opinions on how beneficial that will be, the principle behind those methods is most welcome.
I believe that the bill will be better attuned than the current legislation to how pursuers behave, especially regarding how compensation is invested. Indeed, the idea of a hypothetical investor, as set out in the bill, should encourage a more modernised framework that will allow for greater flexibility for the injured party as well as clarity.
Of course, there are aspects that will be worth examining in further detail. For example, the 30-year period for holding a pursuer’s assets is, for some, not long enough, yet I recognise that that measure is designed to cover a broad range of cases and will be revisited regularly; I hope that that will be the case as necessary. There is also a question of the extent to which the proposed investments and reductions can lead to under or overcompensation. Indeed, the principal aim is to award full compensation—not more, not less—and its importance for those who are involved should never be underestimated. Neither the pursuer nor the defender should be placed at a disadvantage. With that in mind, I hope that the bill’s end result will allow for adjustments that will accommodate for the needs of each individual. That will lessen the potential risk for pursuers and reduce the likelihood of their being undercompensated.
I welcome the bill at stage 1. Although further assurances and examination of certain aspects of the bill would be beneficial, I echo the support that has been given by the committee. Finding a standard that can be implemented across the board—and which works for each case, despite their differences—is quite rightly our goal. Therefore, I hope that the proposed calculations for setting the discount rate will lead to a more credible and fair outcome for those who are affected by personal injury and give the clarity that each party deserves.
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