The new Discount Rate for compensation payments awarded to claimants who suffer severe life-changing injuries is what they need and deserve, says the Association of Personal Injury Lawyers (APIL).
The rate change – from 2.5% to minus 0.75% – has shocked the insurance industry, but APIL said that the Lord Chancellor’s decision was long overdue.
In a statement, APIL said: “People already coping with the most severe injuries have been deprived of the help and care they need for years. We hope this decision marks a long overdue turning point towards treating injured people fairly and with understanding. It is not only the right thing to do, it takes the cost of caring for people away from the taxpayer and puts it squarely where it should be – with the person who caused the needless injury.”
APIL also attacked insurers for expressing outrage at the change in the rate.
“[They have] saved millions of pounds in unpaid compensation, [and]have been aware that a decision to change the discount rate has been on the cards for six years, since APIL first began judicial review proceedings on the issue.
“They have had plenty of time to prepare for this change and the fact that many are now saying premiums will have to rise to cover the cost simply beggars belief.”
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Bill Braithwaite QC, a specialist in medical negligence and personal injury claims, said that the decision could double some damages awards.
“For someone in their twenties, lump sum damages would change from £4.8 million to £11 million. For someone in their sixties, where it impacts less, lump sum damages would change from £3.8 million to £6.5 million,” he said.
Meanwhile, Daniel Frieze, a barrister and head of personal injury at St. John’s Buildings, said that the rise in damages could eventually act as a benefit to insurers to argue for the implementation of fixed costs, which the Government had already heavily championed in recent weeks.