This is a really critical issue for seriously injured claimants to ensure that their damages awards are sufficient to last for their lifetimes. A careful review is needed before the new rate is fixed to ensure this happens. Regular reviews are to be welcomed.
Further research into claimants' attitudes to investment risk is needed before the personal injury discount rate is changed, the Law Society has said. Last week, the Ministry of Justice (MoJ) said it would recalculate the rate after its consultation found serious injury claimants take more risks with investment than the law assumes. Ministers proposed setting the rate by reference to 'low risk' investments, rather than the current assumption that claimants make 'very low risk' investments. They proposed regular reviews, at least every three years, and creating an independent expert panel to help the Lord Chancellor carry out the review. The rate is used to predict investment return in order to calculate how much compensation is awarded to serious injury victims. It was reduced from 2.5% to -0.75% in February this year by the previous Lord Chancellor, Liz Truss.