The Ministry of Justice is to re-examine the discount rate used to calculate the amount deducted from an injured person’s compensation to account for income received from investing the damages, the Gazette has learned. The personal injury discount rate of 2.5% has not changed since 2001.

Last year the Association of Personal Injury Lawyers (APIL) threatened a judicial review over the issue and has now been promised a consultation by the MoJ in the light of historically low interest rates.

A spokesman for the association said: ‘The discount rate is a matter of historic concern for APIL and, although we have been assured that a consultation will take place in the near future, we are still disappointed that it has taken the government this long to get this far.’ He explained a new rate was a ‘matter of urgency’ for some injured people under-compensated by hundreds of thousands of pounds. A consultation is expected to open in April.

Meanwhile, claimant firms enjoyed a victory in the High Court last week as master of the rolls Lord Neuberger ordered that interest on costs should run from the date of the order (the incipitur date). The case, Simcoe v Jacuzzi UK Group, was an appeal by the claimant’s firm Irwin Mitchell after a previous judgment that interest of 8% should be added from the date the costs were assessed or agreed.

Neuberger said the fact a claimant’s solicitors were acting under a conditional fee arrangement ‘does not justify’ departing from the general rule of interest from the incipitur date.

Neuberger also criticised the £75,000 costs bill in a case with agreed damages of £12,750, describing the civil justice system as ‘out of kilter’.