Jennifer Rowlinson | Associate

Damages (Investment Returns and Periodical Payments) (Scotland) Bill

The Damages (Investment Returns and Periodical Payments) (Scotland) Bill , which makes changes to the discount rate for damages for personal injury cases, was unanimously passed by the Scottish Parliament on 19th March.

The discount rate is used to calculate lump sum compensation for those who will have future financial losses as a result of personal injury, such as care costs or loss of earnings as a result of a lost or reduced capacity to work. It is applied to future losses as personal injury cases are only designed to compensate a wrongly injured person for the harm suffered, and where they are awarded damages for future losses they will be able to invest that money and generate a return. The discount rate is therefore intended to represent the return that will be generated by an appropriate investment to eliminate the advantage gained by personal injury victims who receive compensation for future losses over personal injury victims who do not.

The Bill gives Scottish courts the power to award periodical compensation payments as opposed to a lump sum, which can currently only happen when the parties agree on this.

New methodology has also been put in place for calculating the discount rate, and the discount rate will be reviewed by the government actuary every five years. It is hoped that this will make the system clearer and fairer by allowing the rate to be decided by an appropriate professional rather than by politicians.

MSPs have been positive about the changes and hope that they will improve the situation for personal injury victims who are entitled to damages for future losses, many of whom have suffered significant injuries which may be lifelong. However, the Association of British Insurers has been critical of the Bill, saying that it is likely to push up insurance costs.

For those who have experienced personal injury and are likely to have future care costs or loss of earnings as a result, it is important to seek advice from a solicitor to ensure that you are appropriately compensated. Our specialist team can be contacted on 0333 060 5725.


Jennifer Rowlinson

Jennifer Rowlinson

Personal Injury Team

“I particularly enjoy being involved in court hearings and helping my client’s feel supported through the court process from beginning to end”

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