Written statement on Justice update

Mr David Gauke (Secretary of State for Justice):The Government is today introducing into the House of Lords legislation through the Civil Liability Bill to make important changes to our system of compensation for personal injury.

As announced in the Queen’s Speech on 21 June 2017, the Civil Liability Bill will reform the law relating to whiplash claims. We will introduce a new fixed tariff of compensation for pain, suffering and loss of amenity for whiplash claims with an injury duration of up to two years. The tariff will be set in supporting regulations. We will also introduce a ban on seeking or offering to settle whiplash claims without medical evidence.

The Civil Liability Bill will also make changes to the way in which the personal injury discount rate for England and Wales is set under the Damages Act 1996. The principal changes we are making are that: the discount rate will be set by reference to expected rates of return on a low risk diversified portfolio of investments rather than a return on very low risk investments as under the present law; in setting the rate, the Lord Chancellor will consult an independent expert panel chaired by the Government Actuary, with HM Treasury remaining a statutory consultee; and the discount rate will be reviewed promptly after the legislation comes into force and, thereafter, at least every three years.

I am also publishing today the Government’s response to the Justice Committee’s report, Pre-legislative scrutiny: draft personal injury discount rate clause, published on 30 November 2017.

I am also placing the Delegated Powers memorandum and accompanying impact assessments in the House libraries.

I notified the market of the Civil Liability Bill earlier today through the London Stock Exchange group.