Pamela Bradshaw | Associate

Discount Rate remains at -0.75% in Scotland

As reported in the media, the discount rate for personal injury awards is remaining at -0.75% in Scotland. The rate is an important tool when quantifying future losses in personal injury and fatal accident claims. It is therefore highly important when considering cases of significant value.

The rate previously sat at 2.5%. It was changed in 2017 to -0.75%. The current discount rate in England and Wales is higher at -0.25%.

The discount rate relates to the return that injured persons should expect from investments. A lower rate requires insurers to make larger lump sum payments. The reason for this is that it assumes lower annual investment returns for those amounts. This means that Pursuers in Scotland will receive a higher payment of compensation compared with Claimants in England and Wales where the base award is the same.

Ultimately, the discount rate is an acknowledgement that an injured person investing for the future is likely to adopt a lower-risk investment strategy and that the returns for that investment-type have decreased since 2001.

The insurance industry remains concerned that the amount of damages payable as a result of the discount rate. Insurance companies and their representatives have suggested that the rate artificially boosts compensation payments beyond those being paid elsewhere in the UK. The overarching priority however appears to be that injured persons are adequately compensated for their losses.

At Jackson Boyd we have a wealth of experience of dealing with personal injury claims involving future losses. To discuss a potential case with us call us now on 0141 249 6165 to speak to a member of our specialist team.

Pamela Bradshaw

Pamela Bradshaw

Personal Injury Team

“Meeting people at a difficult time in their lives, getting to know them and helping them to get something positive out of the circumstances they find themselves in is the most rewarding part of my job.”

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