Lawyers and insurers have just six weeks to plead their case for how to set the discount rate applied to personal injury settlements.
The Ministry of Justice last week announced a consultation on calculating the rate, just a month after changing it from 2.5% to minus 0.75%.
Insurers, who labelled the revised figure ‘absurdly low’, will be heartened by the speed in producing a review that considers how and when the rate should be changed.
But lord chancellor Liz Truss, who is also considering handing responsibility for setting the rate to an independent body, offered comfort to claimant lawyers by saying victims should be paid damages that compensate them ‘fully’. ‘The idea is to put them in the same position that they would have been had they not been injured, to the greatest extent possible,’ she said. ‘I remain absolutely committed to the principle of full compensation.’
Stuart Henderson, managing PI partner at Irwin Mitchell, said the rate should be set ‘to ensure compensation is adequate and not to satisfy shareholders’.
Huw Evans, director general of the Association of British Insurers, said the consultation document was an important step in achieving a ‘fair, modern way’ to set the discount rate which works for claimants, consumers, businesses and taxpayers.