Lawyers: "MoJ Must Reinforce Current Discount Rate During Consultation Period"

The Ministry of Justice (MoJ) has today published a consultation on how the personal injury discount rate should be set when calculating the damages awarded to seriously injured people.

The consultation paper examines how the rate should be set, how often and who should set the rate. The MoJ also wants to consider whether sufficient use is being made of periodical payment orders.

The rate, which has to be taken into account by the court in assessing the size of a lump sum award of damages for future financial loss in a personal injury case, was recently reduced by the Lord Chancellor, acting in accordance with the present law, from 2.5% to minus 0.75%. This change was announced on 27 February and came into force on 20 March.

Previous reviews of the method of setting the discount rate in 2012 and 2013 concluded that the current system was appropriate. Before February this year, the previous rate of 2.5% had remained unchanged since 2001.