The Ministry of Justice have delayed their announcement on the review of the discount rate, which is used to discount future losses in Personal Injury claims to reflect the rate of interest which Claimants can expect to receive on investing their compensation. Insurers are concerned about the impact on their profits if the discount rate is reduced but for years Claimants have been under compensated as a consequence of the failure to adjust the discount rate to reflect falling interest rates and the rate of return that can actually be achieved. For a Claimant with life changing injuries and significant future losses for the rest of their life it results in uncertainty about whether the compensation awarded will be sufficient to cover the cost of items such as care, equipment and therapies.
It has been nine years since a serious traffic accident in the UK left a young girl with life changing injuries. Her father, who asked only to be known as Christy, says that after years of legal wrangling he has been left with a compensation payment that has done little to soothe concerns about his daughter’s financial future. One of the things that particularly stung was the method used to calculate the compensation. The formula used by UK courts left the family with far less than they were expecting.That could change next month, when Liz Truss, the Lord Chancellor, is due to announce the result of a review of the rate used by courts to work out lump sum compensation payments.