*/
The Lord Chancellor announced that the discount rate applied to personal injury compensation payments will fall from 2.5% to 0.75%.
The rate determines how much payments are adjusted by to reflect the interest claimants can expect to earn by investing them. The percentage is linked in law to returns on the lowest risk investments, typically index-linked gilts.
Liz Truss said the change reflected the significant fall in interest rates since the rate was last set in 2001.
The Ministry of Justice said the law makes clear claimants must be treated as risk averse investors, reflecting the fact that they are financially dependent on this lump sum, often for long periods or their life.
Compensation awards using the rate should put the claimant in the same financial position had they not been injured, including loss of future earnings and care costs.
Truss said: ‘The law is absolutely clear – as Lord Chancellor, I must make sure the right rate is set to compensate claimants. I am clear that this is the only legally acceptable rate I can set.’
Claimant lawyers welcomed the move that will give victims greater sums. But Truss warned it will have a significant impact on the insurance industry and a knock-on effect on public services with large personal injury liabilities – particularly the NHS.
Insurers reacted by seeking an urgent meeting with the Chancellor of the Exchequer, Philip Hammond, to ask him to intervene and reverse the change.
The Lord Chancellor announced that the discount rate applied to personal injury compensation payments will fall from 2.5% to 0.75%.
The rate determines how much payments are adjusted by to reflect the interest claimants can expect to earn by investing them. The percentage is linked in law to returns on the lowest risk investments, typically index-linked gilts.
Liz Truss said the change reflected the significant fall in interest rates since the rate was last set in 2001.
The Ministry of Justice said the law makes clear claimants must be treated as risk averse investors, reflecting the fact that they are financially dependent on this lump sum, often for long periods or their life.
Compensation awards using the rate should put the claimant in the same financial position had they not been injured, including loss of future earnings and care costs.
Truss said: ‘The law is absolutely clear – as Lord Chancellor, I must make sure the right rate is set to compensate claimants. I am clear that this is the only legally acceptable rate I can set.’
Claimant lawyers welcomed the move that will give victims greater sums. But Truss warned it will have a significant impact on the insurance industry and a knock-on effect on public services with large personal injury liabilities – particularly the NHS.
Insurers reacted by seeking an urgent meeting with the Chancellor of the Exchequer, Philip Hammond, to ask him to intervene and reverse the change.
The new Bar Council earnings report presents a collective challenge for the self-employed Bar, remote hearings are changing and Bar Conference is back next month
Launch of the Institute of Neurotechnology and Law
Paul Magrath of ICLR recalls the chequered history of law reporting prior to the 1865 establishment of a Council of Law Reporting
Leading drug, alcohol and DNA testing laboratory, AlphaBiolabs, has made a £500 donation to North West charity Child Concern as part of its Giving Back campaign
Gail Evans, Technical Trainer at AlphaBiolabs, examines the latest trends in illicit drug use as seen in the laboratory, from designer drugs to ‘unexpected’ substances in a donor’s sample
Louise Crush explores the value you can measure in monetary terms alongside the many non-tangible benefits to working with a financial adviser
By Professor Jo Delahunty KC, Kate Brunner KC and Dr Ann Olivarius KC (Hon) OBE
The ‘non-party political’ employment silk advising Labour talks to Stephanie Hayward about employer failure to tackle workplace sexual harassment and the urgent need to reinvent whistleblowing culture
From Parliamentary standards to barrister standards – Kathryn Stone OBE, Chair of the Bar’s regulator, talks to Anthony Inglese CB about roots, respect and reviews
Jessica Foster reviews State Trials and Error – fundraising and showcasing the musical and theatrical talent within the legal profession
Alex Goodman KC on why our electoral laws need an urgent upgrade – they were not designed to address the corruption of popular opinion by AI and deepfakes