Future payments for past accidents – options for the injury discount rate

Yesterday the Government issued its latest consultation paper about the discount rate to be used for calculating future loss payments in personal injury cases. It has requested views by 11 May which can be fed in via the consultation home page.

The current law on the rate is that the Lord Chancellor sets it and has to follow the return on Index-linked Gilts (ILGS), which is presumed to indicate a risk-free approach to the investment of compensation. If this is going to change it will need legislation to change or repeal the Damages Act 1996 – a point which is confirmed in the Lord Chancellor’s written statement which accompanied the consultation.

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