What is the Discount Rate?
When a victim of a personal injury accepts a lump sum compensation payment, the final amount awarded is adjusted via the Discount Rate, to reflect the interest they can expect to earn from investments, tax, expenses and inflation.
Claimants should receive 100% compensation for any losses suffered as a result of a personal injury. The Discount Rate ensures they receive no more or no less than the full amount of compensation that they are entitled to.
What difference does it make to compensation in personal injury claims?
The reality of this in terms of personal injury compensation, is that if you need to pay for something in the future, following a personal injury claim, such as rehabilitation, you will have the funds available to pay for it.
APIL President, Gordol Dalyell said:
“We welcome the Lord Chancellor’s decision to set the discount rate at minus 0.25 per cent, after uncertainty about the impact of the Government’s new approach of setting the rate on the basis that injured people should be considered ‘low risk’ investors. The Government has faced sustained pressure from the insurance industry to set a rate which would not be appropriate for injured people, who should not be forced to take any risk with their investments. We must remain vigilant that this new rate does provide them with the fair compensation they need and deserve.”
When is the Discount Rate effective from?
The new discount rate will be effective for claims settled from the 5th August 2019 and applies only to England and Wales; Scotland sets its own rate. Under the Civil Liability Act 2018, it will be reviewed within 5 years.
Morgan Jones Pett and personal injury claims.
We have a national reputation for our expertise in personal injury and work hard to ensure we receive the highest amount of compensation for our clients.
We are accredited by APIL and listed in the Legal 500.
If you think you or a loved one has a personal injury, contact us on 01603 877000 for advice.