Justice for seriously injured people may be improved
The Lord Chancellor has agreed to review something called the “discount rate”, after increasing pressure from personal injury and clinical negligence lawyers.
The discount rate is used to calculate the amount deducted from an injured person’s compensation to account for any income he may receive from investing his damages. The discount rate set by the (then) Lord Chancellor in 2001 was based on yields generated by index-linked government stock (ILGS) and was calculated at 2.5 per cent.
Since that decision was made, yields on ILGS have gradually declined, along with the poorer performance of the financial markets and banks generally. Over the last three years the average gross yield on ILGS has been less than one per cent. This means that a seriously injured person cannot generate enough income from a lump sum invested in ILGS to meet their future losses and expenses.
Whilst the Lord Chancellor is considering the position, some trials due to be heard have been adjourned, joint settlement meetings have been postponed or cancelled, settlement approval hearings are delayed, and settlement offers have been withdrawn. This means that those who have suffered the most serious injuries are being denied final resolution of their claims until this review has been completed.
In order to ensure swift access to justice it is hoped that the Lord Chancellor can conclude his review very soon.
Sue Bowler says “This is a very important issue, particularly for seriously injured people who perhaps can never work again and will require care and support for the rest of their lives. At present the discount rate is set at a level which means that they simply cannot generate enough income to meet their future needs. I hope that the Lord Chancellor will appreciate the injustice of this situation and make a prompt decision to reduce the discount rate”.
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