Commenting on the Lord Chancellor’s decision, Stuart Hanley, deputy head of Minister Law legal services, said:
“We broadly welcome this humane decision by the Lord Chancellor, which will ensure that critically injured people are properly funded, and the principle of 100% compensation is maintained.
Although a revised upwards rate at minus 0.25% will reduce compensation payments (previously -0.75%) the new rate does reflect the fact that the government accepts it is a risky and costly business for claimants to invest their compensation successfully in order to fully fund the enormous changes in their lives following serious injury.
The revised rate also mirrors the likely outcome of the Damages Act in Scotland, where we understand the Scottish government is due to confirm a -0.25% rate, ensuring there is a level playing field across the UK.
In 2017, when Liz Truss MP, then Lord Chancellor, re-set the discount rate at -0.75%, she stated: ‘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.’
Striking the appropriate balance is of course a difficult task but, on balance we have always believed the system should support the injured person first and foremost, as that, in the end, is what we pay our insurance for.”
For more information please contact Ben Welsh 07568 382040