Damages

Personal injuries - multiplier for future loss - court not entitled to reduce guideline net discount rate to overcome effect of falling interest ratesBarry v Ablerex Construction (Midlands) Ltd: CA (Lords Justice Henry, Judge and Hale): 21 March 2001The claimant brought an action for damages in respect of multiple injuries suffered while working for the defendant.

On the question of appropriate net discount rate to be given for the assessment of relevant multiplier for future loss, the trial judge, to counteract the effect of falling interest rates, gave a net discount rate of 2% on the multiplier instead of 3% as laid down by the House of Lords in Wells v Wells [1998] Gazette, 16 September 35; [1999] 1 AC 345.

The defendant appealed.Jeremy Cousins QC and Graham Cliff (instructed by Moran & Co, Tamworth) for the claimant.

Benjamin Browne QC and Roger Harris (instructed by Buller Jeffries, Birmingham) for the defendant.

Held, allowing the appeal and increasing the discount rate to 3%, that the objective of the guidelines provided by the House of Lords in Wells v Wells was to provide certainty to assist litigants to achieve realistic and fair settlements in order to avoid protracted and expensive trials, and such an object would be undermined unless the guidelines were implemented by the lower courts.

Accordingly, the guideline rate of 3% retained the force of the law with flexibility for exceptional cases for a significant period of time until the rate was replaced by the Lord Chancellor.