Specialist clinical negligence solicitor Helen Hillson examines and explains the significance of a forthcoming announcement which will have potentially positive significant consequences for Claimants.
Have you ever wondered how lawyers and judges calculate future losses?
What they do not do is simply work out the number of years and the annual loss and multiply the two together. Therefore, if a 50 year old who would nave retired at 70 has lost earning capacity of £25,000 per annum the figure would not be 20 x £25,000.
The reason for this is “accelerated receipt”. A victim receiving damages now can make a lump sum generate a return on investment. However, with rates of interest at effectively zero how can a victim generate a return?
The government set a notional return rate of 2.5% some years ago and there have been Claimant howls of protests in recent years due to the fact that future damages awards have suffered the reduction to reflect a 2.5% anticipated return rate, whereas, in reality, nothing like 2.5% is achievable.
At long last this inequity appears to be heading for the bin and the results of a governmental review of discount rates to calculate future losses is awaited imminently.
23rd February 2017