On 19 March 2019 the Lord Chancellor, David Gauke, advised the London Stock Exchange of the commencement of his long awaited review of the personal injury Discount Rate as required by the Civil Liability Act 2018.
Under the terms of the Act, the review can last a maximum of 140 days which means that this long awaited decision will be announced by 5 August 2019 at the latest.
The Government Actuary’s Department has until 7 April 2019 to commence its consultation and it must report to the Lord Chancellor by 26 June 2019.
The current Discount Rate is -0.75% and represented a significant departure from the historical rate of 2.5% which has resulted in insurers having to make disproportionately high awards.
Plexus have provided evidence to the Ministry of Justice in advance of the Lord Chancellor’s review and support the position of the Forum of Insurance Lawyers (FOIL), namely that the current Discount Rate of -0.75% is unduly harsh on the NHS, public purse, motorists generally and insurers.
Low risk Claimant investors will still achieve capital growth on their compensation sums by instructing sophisticated Wealth Managers and Independent Financial Advisors to manage a wide spectrum of portfolio investments. These investment strategies need to be taken into account by the Lord Chancellor and Government Actuary’s Department when setting the Discount Rate.
FOIL hopes that the outcome of the Discount Rate review delivers a fair and just outcome for all parties without any over or under compensation.
The Lord Chancellor’s decision will not impact on Scottish claim as a separate review is being made by the Scottish Government.
If you would like to know more about this matter, please speak to your contact at Plexus Law:
Anthony Baker, Partner & Vice President of FOIL
T: 0113 4681 702 | M: 07811 545 321 | E: firstname.lastname@example.org
Joseph’s Well | Hanover Walk | Leeds | LS3 1AB