Peter Walmsley, Partner at Clyde & Co, comments: "The ABI has taken the unusual step of pre-empting the decision of the Lord Chancellor expected at the end of January that may change how personal injury compensation claims will be calculated. While it is impossible to know which way the government will go, we believe the ABI is right to flag up insurers’ concerns around lump-sum payments for life-changing injuries. "
"A decision on the discount rate by the government could potentially cost insurance companies, and their customers, hundreds of millions of pounds. While there have been two comprehensive Consultations, and a review by a panel of government appointed experts, worryingly the government has never published the results of the Consultations or the findings of the panel."
"Even small percentage changes would have a significant impact on the pay-outs that insurers will need to make. If Ms Truss decides the time is now right to introduce a lower rate, claimants are more likely to seek larger lump sums up front that could severely impact the industry."
"There has been no opportunity for the insurance industry, or the Claimant lawyers, to respond to the results of the consultations and voice their concerns. Despite the length of time that has passed since the first Consultation, the decision appears to be being rushed through without completing a proper and full consultation of all the stakeholders impacted. It is only right that the insurance industry is properly consulted on this potentially game changing decision.
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