Decision on discount rate for personal injury damages to be announced in January
A long overdue decision on the discount rate applied to personal injury damages is due to be made by 31 January 2016.
The intention of the discount rate is that Claimants are not overcompensated by receiving compensation in advance of when the loss would have happened (e.g. future loss of earnings or future care requirements). The idea being that once damages for future loss are received, they can be invested and receive interest, potentially putting the Claimant in a better position than they would have been.
At present, the deduction made is 2.5%.
However, the reality of the situation for many years is that due to the record low interest rate levels, Claimants are in fact losing out as they cannot hope to achieve returns of 2.5% or higher.
It is more than 4 years since the Government closed its consultation into the issue without any decision being made. During that time, thousands of Claimants have been undercompensated, sometimes by hundreds of thousands of pounds. It is hoped that the new rate will be significantly reduced, leading to fairer compensation awards for Claimants.
At Coffin Mew we have many years experience of dealing with Claimants with some of the most complex and challenging injuries, whether it be personal injury or medical negligence and often recovering damages of hundreds of thousands or millions of pounds.
For further information, please contact Chris Unsworth, Solicitor in our Catastrophic Injury and Clinical Negligence team on 0800 834 627.