Articles - Personal Injury Compensation rate changed by Lord Chancellor


The decision by Elizabeth Truss to lower the Discount Rate from 2.5% to minus 0.75% was made in accordance with the law and in her capacity as independent Lord Chancellor. The law makes clear that claimants must be treated as risk averse investors, reflecting the fact that they are financially dependent on this lump sum, often for long periods or the duration of their life.

 Compensation awards using the rate should put the claimant in the same financial position had they not been injured, including loss of future earnings and care costs.

 Lord Chancellor and Justice Secretary Elizabeth Truss said: The law is absolutely clear - as Lord Chancellor, I must make sure the right rate is set to compensate claimants. I am clear that this is the only legally acceptable rate I can set.

 The Discount Rate has been unchanged since 2001.Today’s decision, as well as seeing compensation payments rise, is also likely to have a significant impact on the insurance industry and a knock-on effect on public services with large personal injury liabilities – particularly the NHS.

 But in the announcement to the London Stock Exchange this morning, four key pledges were made:

 the government has committed to ensuring that the NHS Litigation Authority has appropriate funding to cover changes to hospitals’ clinical negligence costs
 the Department of Health will work closely with GPs and Medical Defence Organisations to ensure that appropriate funding is available to meet additional costs to GPs, recognising the crucial role they play in the delivery of NHS
 the government will launch a consultation in the coming weeks to consider whether there is a better or fairer framework for claimants and defendants, with the government bringing forward any necessary legislation at an early stage

 Chancellor of the Exchequer Philip Hammond will meet representatives of the insurance industry to assess the impact of the rate adjustment

 The consultation, which will be launched before Easter, will consider options for reform – including whether the rate should in future be set by an independent body; whether more frequent reviews would improve predictability and certainty for all parties; and whether the methodology is appropriate for the future.

 The new discount rate will come into effect on 20 March 2017, following amendments to current legislation.

Back to Index


Similar News to this Story

How to get the most out of your insurance consultant
More than half of UK life insurance companies (59%) will spend more on actuarial consultants in the next year. This is one of the key findings of our
Video of what a cyber attack looks like in the real world
Hackers and their scams live behind keyboards. Invisible and faceless. Hiscox show how it would look ff cyber crime happened in the physical world, th
Make your New Years resolution to be Scam Smart in 2019
Two years on from the government’s announcement that it intended to ban pensions cold-calling in order to end the appropriation of millions of pounds

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.