Discount rate review will affect claimant damages
Melanie Lidstone-Land, personal injury and medical negligence lawyer, comments on the discount rate review:
“Yesterday (15 July 2019) the Lord Chancellor announced that the Discount Rate would be amended to -0.25% from it’s previous figure of -0.75%.
The Lord Chancellor is also The Secretary of State for Justice and has oversight of all Ministry of Justice (MoJ) business. The current holder of the post is The Rt Hon David Gauke MP. His specific responsibilities include:
- Oversight of all portfolios and MoJ strategy
- Resourcing of the department
- Functions of the Lord Chancellor
- EU exit and international business
- Judicial policy including pay, pensions and diversity
- Corporate Services
The Discount Rate is the way in which the final lump sum compensation payment to a Claimant is adjusted to reflect the interest that they would expect to earn when investing their damages. It also reflects the effects of tax, expenses and inflation on invested damages.
Previously when the rate was -0.75% there were concerns that Claimants were being overcompensated, effectively people thought that the Discount Rate was too favourable to Claimants and needed to be reviewed. This came after years of the Discount Rate being very heavily favourable to the Defendant.
A piece of legislation known as the Civil Liability Bill 2018, amongst other things, sought to review the Discount Rate and is said to provide a more balanced approach giving Claimant’s a fair amount of compensation.
The reality is that Claimant’s will feel a little “short changed” because their awards will not, now, be as high as they have been since 2017 when the rate was reviewed to -0.75%.
However, it is still very much in the Claimants’ favour and it is with huge relief that we are not back to the “bad old days” where it was virtually impossible to fairly and justly invest monies on behalf of Claimant’s to ensure a fair return.
You may see all over the popular press this week that Defendant’s feel Claimant’s are still over compensated and that the review of the Discount Rate does not go far enough.
My answer to that ………."Tough!"
Claimant’s get a rough ride with compensation claims, the damages are still lower than they should be and the system is still, in my opinion, unfairly favourable to defendants’.
I’ll take the -0.25 and go into battle….once again”
Melanie fights for her clients to ensure their voices are heard about the impact of injuries, both physical and psychological, from accidents that were not their fault and medical mistakes.
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