We recently suggested that one of the consequences of the change in the personal injury discount rate would be the introduction of more regular reviews of the discount rate
While we cannot claim to predict the future, the Ministry of Justice and the Scottish Government have now (on 30 March) launched a consultation on how the personal injury discount rate should be set in the future. The consultation is open until 11th May.
The questions posed in the consultation include: –
What should determine how the rate is set?
Evidence is being sought as to how claimants who have suffered a serious personal injury because of an accident are advised to invest their compensation and how they actually invest that compensation. The possibility of different rates being set for different cases is raised.
When should the rate be set?
The options include introducing specific minimum review periods (1,3,5 or 10 years), linking reviews to movements in the yields of investments or some combination of the two. The possibility of more complex, continuous adjustment is raised.
Who should set the date?
The possibilities include a panel of independent experts, a panel subject to agreement of another person such as a Minister or the Lord Chancellor and her counterparts in Scotland or another nominated person, possibly following advice from an independent expert panel.
Is sufficient use being made of periodical payment orders?
The consultation raises a number of questions regarding the use of periodical payment orders which may ultimately affect the use of such orders as an alternative to lump sum payments for claimants who have suffered a serious personal injury because of an accident.
It is perhaps ironic that the discount rate is used to calculate compensation for losses in the future and it is only now that a consultation is being launched to consider how this will work in the future!
The change in the discount rate has significantly affected a number of the serious personal injury claims we are dealing with at Jackson Boyd Lawyers. The compensation figures for matters such as future loss of earnings and future loss of pension have substantially increased.
The consultation can be found at consult.justice.gov.uk/digital-communications/personal-injury-discount-rate/