Litigation Update - Personal Injuries - April 2017

Practice Direction - Payment of Costs on Account

HC71 - Payment on account of costs pending taxation

On 28 March 2017 the President of the High Court issued a new practice direction. Due to the long delays in the taxation of costs, the provisions of Order 99, rule 1B (5) have been highlighted by the President. The terms of the direction are as follows:

"I direct that in all cases where there is no dispute as to the liability for the payment of costs and in any other case which a judge thinks appropriate, an order may be made directing payment of a reasonable sum on account of costs within such period as may be specified by the judge pending the taxation of such costs. Such orders may be made on an undertaking being given by the solicitor for the successful party that, in the event of taxation realising a smaller sum than that directed to be paid on account, such overpayment will be repaid. This practice direction shall come into effect on Monday, 24th April, 2017."

Discount Rate in Ireland

The Supreme Court in Russell v The Health Service Executive (Unreported, Supreme Court Determination, 1 February 2017) [2017] IESCDET 10 has refused to hear an appeal on the discount rate being lowered to 1% from 3%. The precedential value of these determinations has been clarified in Reaney and others v Interlink Ireland Limited (t/a D.P.D) meaning that this issue is for this case alone and does not set the standard for future cases.

The Court of Appeal examined this issue again in Walsh v Tesco Ireland Limited (Unreported, Court of Appeal, 3 March 2017) [2017] IECA 64. The court analysed the RRR in the context of the Russell decision. It appears that there is now a variation between 1.5% and 1% depending on the type of losses to be calculated. In light of the decision of the court in Russell, the court in Walsh held that there are good policy reasons as to why when calculating claims for future pecuniary loss the court should assume a 1.5% RRR on investment income for all categories of future financial loss and a 1% RRR in respect for future care, without requiring the court to hear any evidence from economists or investment analysts. An actuary should suffice.

UK Ministry of Justice Reduction of Discount Rate to -0.75%

On 27 February 2017 the UK the Ministry issued reasons for setting the discount rate at minus 0.75%.

The Association of British Insurers has responded to this decision via press release commenting that "[c]utting the discount rate to...