The Ministry of Justice has confirmed it will not publish its plans for changes to the discount rate applied to personal injury compensation next week, as previously announced.
In a statement to the London Stock Exchange today, lord chancellor Liz Truss said the review of the rate had taken ‘longer than anticipated’ and she was not in a position to make an announcement by 31 January.
The statement added that Truss ‘remains committed to making an announcement in February’.
The result of the review is eagerly awaited by lawyers and insurers alike, as the government grapples with whether to change the current 2.5% rate discount on personal injury awards.
The figure is calculated to take account of interest on future investments, but claimant lawyers have long argued that successful litigants are short-changed by the existing formula.
The Association of British Insurers last week lost a High Court challenge to force the government to put off any decision on the discount rate. Yesterday it was confirmed permission to appeal that ruling had been refused.
Speaking before today’s delay was confirmed, ABI director James Dalton said: ‘We are disappointed to have lost our appeal today on the discount rate. We will, however, continue to make very strong representations to the government that a significant change in the discount rate now would be reckless and wrong, hurting consumers, business and the NHS.
‘While it is vital that claimants get the compensation they are entitled to, this has to be done on the right basis.’