Government struggling to define what full compensation means
A senior lawyer has called for the Lord Chancellor to be held to his commitments on the personal injury discount rate through an amendment to the Civil Liability Bill.
The discount rate, which is set by the Lord Chancellor, is used to calculate likely investment return on damages awarded to a claimant with serious injuries who may need lifelong care.
Writing in NLJ this week, Julian Chamberlayne, partner at Stewarts, welcomes the government’s commitment that the Lord Chancellor will explain the reasons for any new rate in future, including publishing the panel of experts’ report and impact assessments.
However, Chamberlayne warns: ‘To ensure these commitments are not forgotten Schedule A1 to the Civil Liability Bill requires careful scrutiny and amendment, as for instance, it only requires publication of such information as the Lord Chancellor thinks appropriate.’
In terms of numbers, Chamberlayne considers that ‘once tax and investment charges are factored in it is difficult to see now how that rate could exceed 0% and it may well remain negative’. He cites Government Actuary Department figures published in July 2017 that predict a 0% rate would leave about 26% of claimants undercompensated.
The Bill also provides for claimants to receive fixed amounts of compensation for whiplash injuries. Separately, the small claims limit for road traffic accident cases will be raised from £1,000 to £5,000, pushing most whiplash cases to the small claims track, where claimants cannot claim for their legal costs. Both proposals have alarmed lawyers.
Neille Ryan, partner at Furley Page, said: ‘Whiplash awards will be slashed to a few hundred pounds and almost no legal costs will be recoverable by most claimants, who will have to pay lawyers themselves out of their damages, or take on the insurer and their solicitors alone.’
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