Personal injury solicitor Marc Folgate reviews the latest news and today’s welcome announcement on discount rates. Welcome for Claimants but not the insurance industry which has been quick to warn of increased premiums.
Last week my colleague Helen Hillson wrote a piece about the review of discount rates when calculating future damages awards.
Well, the news has now emerged that Courts will be required to review discount rates from a notional rate of 2.5% significantly downwards, to reflect the reality that an investment return on damages will never achieve anything like 2.5% for the foreseeable future.
The reaction form insurers is predictable. They say they will increase premiums, as the BBC reports.
No surprise there then.
For what it is worth I believe that this is a decision which puts right a historical injustice for Claimants. The insurance industry would do well to remember that the very purpose of a compensation award is to place the victim in the position they would have been financially, so far as money can allow a righting of the wrong. For many years a failure to address realistic return rates has allowed it a windfall.
Marc Folgate 27 February 2017