Category Archives: Discount Rate

Jersey: Draft Legislation in respect of discount rates and PPOs has been approved

This blog post is by William Audland QC of 12 King’s Bench Walk.

Following my earlier posts – for a summary on the discount rates see here – the Draft Damages (Jersey) Law 201 (as amended by Amendment P1.131/2018) to set a statutory discount rate and to create a statutory power to make a PPO was unanimously adopted by the States of Jersey yesterday.

From the date on which the Law comes into force – that date being 7 days after the registration in the Royal Court if sanctioned by the Privy Council – a court, including an appeal court, will apply the new provisions. It is anticipated that the Law will be registered in the Royal Court and therefore be in force by about the end of March. Continue reading Jersey: Draft Legislation in respect of discount rates and PPOs has been approved

Jersey: Update on X Children litigation and draft legislation

This blog is by William Audland QC of 12 King’s Bench Walk.

Following my earlier posts there have been two further developments this week.

The first reading of the Draft Damages (Jersey) Law 201 to set a statutory discount rate and to create a statutory power to make a PPO has been postponed from 4 December 2018 to 29 January 2019.

A settlement reached in the X Children case (which was tried this summer) was approved by the Royal Court yesterday: the terms of the settlement involved a lump sum and a PPO in respect of care costs but were otherwise kept confidential. The Solicitor General had intervened in the trial and gave evidence to the court that it had an inherent power to impose a PPO (although, this being a settlement, the parties were able to agree a PPO in any event).

Jersey: draft legislation on discount rates gathering pace

This is an update by William Audland QC to his recent blog on the Draft Damages (Jersey) Law 201 (available here).

Following my post earlier this week it now appears that the Draft Damages (Jersey) Law 201 -designed to set a statutory discount rate and to create a statutory power to make a PPO – is being expedited.

The Corporate Services Scrutiny Panel has already started a review of the draft Law. As part of that review, relevant practitioners and experts in Jersey have been invited to submit their views on the draft Law, and to certain specific questions relating thereto, by 9 November 2018.

The Draft Damages (Jersey) Law 201 has been lodged by the Chief Minister for debate on 4 December 2018.

Watch this space.

Periodical payments and discount rates: Jersey now leading the way?

This blog is by William Audland QC of 12 King’s Bench Walk.

Following a trial this summer, judgment is presently awaited on the following questions: (1) whether Jersey customary law permits the making of a PPO; and (2) the determination of the appropriate discount rates in Jersey. Judgment is awaited.

In a surprise development last week, the States of Jersey published the Draft Damages (Jersey) Law 201 which will:

  • set a statutory discount rate;
  • create a statutory power to award damages by way of a PPO to cover future care costs and lost earnings.

The discount rates proposed are expressly stated to have been:

  • informed by the consultation launched jointly by the MOJ and the Scottish Government into the discount rate, and which included detailed analysis by the UK Government Actuary’s Department into investment returns;
  • the product of a review conducted by the States of Jersey’s Senior Economist and the Director of Treasury Operations and Investments concluding that:
    • 15-year inflation data shows no long-term difference between inflation in Jersey and the UK respectively;
    • the UK Government Actuary’s Department’s analysis of investment returns in personal injury cases – to the effect that claimants in fact adopt a “low-risk” as opposed to a “very low-risk” strategy towards investment – was of equal validity in Jersey;
  • designed to fulfil the accepted principle of full compensation but acknowledged that there were differing views which had yet to be taken into account on certain issues (e.g. how to adjust for the management fees paid to investment managers and/or how to account for insurers’ concerns about the economics of the discount rate).

On that basis the appropriate discount rates would be:

  • where the lump sum is to cover a period of up to 20 years, +0.5%; and
  • where the damages will cover a period of more than 20 years, +1.8% (applicable to the whole of the award, not just the costs arising after the first 20 years).

From the date on which the Draft Law comes into force – that date being 7 days after the registration in the Royal Court if adopted by the States and sanctioned by the Privy Council – a court, including an appeal court, will apply the new provisions.

We will be keeping a keen eye on further developments in Jersey.