“Not fit for purpose” discount rate law must change, says Medical Defence Union

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The Medical Defence Union (MDU) has said that the law governing the discount rate is “not fit for purpose” and that the next Government must change it.

The recent discount rate drop of 3.25% substantially increased the cost of clinical negligence claims overnight and the MDU has said that it has had a massive impact on the cost of public services like the NHS.

Responding to the Ministry of Justice’s consultation on how the personal injury discount rate should be calculated in the future, Dr Christine Tomkins, the MDU chief executive said that the Lord Chancellor’s decision to lower the discount rate had added billions of pounds to the cost of clinical negligence and other personal injury claims overnight.

“For example, a claim that we would have paid on behalf of a GP for £8.4 million, is now likely to settle for £17.5 million,” she said.

“The law must change to require whoever makes the decision to take into account the effect on public services like the NHS and on every citizen. There should also be an independent panel of experts to advise the decision maker, who should not set the rate in isolation.

“The financial and economic repercussions are profound and need to be fully understood as they should inform any decision about the discount rate.”

She argued that the benefit to the number of people who receive compensation awards must be balanced against the wider public interest, such as the impact on the NHS. Tomkins also pointed out that the MDU believed that the Treasury would need to find an additional £5.9 billion for the first three years of additional NHS costs alone.

“We have responded to the consultation on behalf of our members, pointing out what we think are the flaws in the current decision,” said Tomkins.

She added that GPs would need immediate assistance to help them with the increased cost of indemnity as a result of the rate drop.

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Marek Handzel

Marek Handzel is the editor of Claims Magazine. Marek welcomes articles, letters, or feedback from readers and can be reached by emailing marek.handzel@barkerbrooks.co.uk