The House of Lords decision in the cases of Page v Sheerness, Wells v Wells and Thomas v Brighton Health Authority is a momentous advance for the victims of personal injury.Evidence to the Law Commission suggested that personal injury (PI) victims were averse to risk, many of them preferring the security of bank or building society deposits to the vagaries of the markets, despite the lower returns on the investment.

Government index linked stocks (ILGS) offer an alternative to equities of a risk-free investment -- albeit at a lower rate of return.The Lords accepted that PI victims should not be treated as 'ordinary prudent investors' who might invest in a mix of 70% equities and 30% ILGS.

They are not investing a windfall or spare cash and able to take risk of loss or diminishing returns, taking a long-term view of investment.

Personal injury victims are instead investing a lump sum, carefully calculated by the judge to meet their likely future needs which will have been assessed after detailed expert evidence as to the incidence of those needs.

They may need to draw on the fund to meet care needs at the very moment when the stock market has fallen.

The court found that their position was more analogous to that of a closed pension fund with a specific sum left to meet defined future liabilities.

Evidence was given that in these circumstances an investment manager was likely to choose ILGS as the prudent method of investment.The court decided that the appropriate rate for all but the most exceptional cases should be 3%.

Damages awards in cases with serious injuries and substantial future loss will rise considerably as a result of this decision.In Thomas, the court also considered the question of how to deal with the costs of new or specially adapted accommodation.

The court approved the approach adopted in Roberts v Johnstone but decided that the 3% rate was appropriate rather than the conventional 2%.

This is a welcome step forward, although it does not deal with the issue of where the capital is to come from.

Furthermore, Judges have traditionally further discounted multipliers for 'contingencies'.

Actuaries have been scathing about this, arguing that this was tantamount to double discounting.

The court agreed, at least in the case of 'whole-life' multipliers (there is still room however, for discounts for contingencies for multipliers for future loss of earnings).

However, PI victims can be reassured that in future much of their compensation for future loss will be objectively calculated and safe from additional discounting through a judge's subjective guess as to future eventualities.Where does this leave actuaries? They must be pleased to have persuaded the court that their tables have more validity than the predictions of astrologers.

The third edition of the Ogden Tables (including data from the more up-to-date English Life Tables with higher life expectancies) has recently been published and a fourth edition is expected to follow this judgment.

Although the court warned that judges must not become 'slaves to the tables', there was a clear indication that the court expected there to be need for actuarial evidence in most cases.

There will now be an end to the absurd need for actuarial evidence to be called 'to prove the Ogden Tables'.

But it will be appropriate in exceptional cases where the Ogden Tables do not suffice.Predictably, many press reports concentrated on the inevitable increase in insurance premiums to fund the increased damages.

However, if the tort-based compensation is to command respect, damages must mean full and proper compensation for the harm inflicted.

The Lords should be congratulated on a principled decision that leaves those seriously injured through someone else's fault with a secure future.

The Lord Chancellor should now accept the implicit invitation of the Lords to set 3% as the prescribed rate under The Damages Act 1996.