We are pleased that the Lord Chancellor has announced the discount rate for personal injury lump sum compensation payments.
The discount rate governs the amount of money a client should receive when they are paid compensation now for expenditure that will happen in the future. That could be to purchase an adapted vehicle or equipment for example.
Under the Damages Act 1996, the Lord Chancellor needs to consider certain factors when deciding what the rate should be.
- actual returns available to investors;
- actual investments made by investors of relevant damages;
- such allowances for tax, inflation and investment management costs as thought appropriate; and
- wider economic factors.
The rate is now minus 0.25%.
We are very pleased that there is now clarity about this after a long period of uncertainty. We are also hopeful that clients whose cases have been in limbo during the discount rate consultation and decision will be able to see their cases settled and move on with the next chapter of their lives.
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