Call Us Free  Phone 0800 988 3674  or Mobile  Mobile 0333 200 4465 Call Us Free  Phone 0800 988 3674  or Mobile  Mobile 0333 200 4465

Government Introduces New Discount Rate For Personal Injury Compensation Claims

The Lord Chancellor recently announced changes to the way personal injury compensation payments are made for victims of serious and life-changing injuries, by reducing the Discount Rate from 2.5 percent to minus 0.75 percent.

Lump sum personal injury compensation payments for the most serious of injuries are adjusted according to the interest victims can expect to receive by investing the amount in low risk investments – the reason for this is to ensure victims are supported in their current and future situations and can continue to live independently.

Why The Rate Change?

The rate hasn’t been changed since 2001 when the economy was in a stronger position. Nowadays, investments rarely achieve a 2.5 percent level of return, leaving victims struggling to make ends meet and finding it even harder to live an independent life.

Commenting on the announcement made by Elizabeth Truss on 27 February, Trevor Morris, Personal Injury Solicitor from Bartletts Solicitors, says: “A review of the rate is long overdue and one of the failures of the system is that rates are not reviewed frequently, say on an annual basis, so when they are reviewed the effects can appear quite stark on the face of it.

“The change to the Discount Rate is welcomed and it means that people who suffer severe life-changing injuries can now be assured that the compensation needed to look after them is calculated correctly and is sufficient to provide care for the rest of their lives. They are the most serious injuries which are life-changing and normally mean the injured person requires a 24-hour care regime, requires specialist accommodation and is no longer able to work.

“Such injuries do not occur solely from road traffic accidents (RTAs) as is portrayed in some media reports but also result from accidents at work, accidents in public places, and clinical negligence following inadequate medical treatment. There are only a few thousand of these cases every year but they have a catastrophic effect on the individuals and their families so it is quite right that they are properly compensated.”

The Fairest Way To Compensate?

There is likely to be an increase in compensation payments as a result of this new Discount Rate, as well as a big impact on the insurance industry and the NHS – however, because the compensation calculated by this rate is only for those suffering from severe personal injuries, the effects should be manageable.

At the time of making the announcement, the government promised the following:

  • A commitment to making sure the NHS Litigation Authority has the necessary funding to cover any increase to hospitals’ medical negligence costs
  • The Department of Health will work alongside GPs and medical defence organisations to ensure the right funding is available to meet any additional costs to doctors
  • There will be a consultation to consider if the current approach is fair for both claimants and defendants, and to consider options for reform such as an independent body setting the Discount Rate in future

The Chancellor of the Exchequer, Philip Hammond, has met with representatives from the insurance industry to assess the impact of the rate change.

The new rate came into effect on 20 March.

Making A Serious Injury Claim

If you or a loved one is seriously injured in an accident that wasn’t your or their fault, you deserve to be fairly compensated – and that includes receiving compensation for your situation today as well as in the future.

“We want to always ensure individuals who suffer personal injuries are awarded the right level of compensation, one that provides the financial support necessary for ongoing care and loss of earnings – and this rate change promises to do just that, to look after victims of serious and life-changing injuries,” adds Trevor Morris.

For free and impartial legal advice regarding your personal injury, or to discuss the likely implications of the Discount Rate change, please contact Bartletts Solicitors on Freephone 0800 988 3674 or email