{"id":79281,"date":"2017-02-27T11:09:00","date_gmt":"2017-02-27T11:09:00","guid":{"rendered":"http:\/\/mostafa.openonline.co.uk\/?guid=513a58302a086505b2b4db38c2cf8dd5"},"modified":"2017-02-27T11:09:00","modified_gmt":"2017-02-27T11:09:00","slug":"statement-to-parliament-justice-update","status":"publish","type":"post","link":"https:\/\/mostafa.openonline.co.uk\/?p=79281","title":{"rendered":"Statement to Parliament: Change to personal injury discount rate"},"content":{"rendered":"<div class=\"govspeak\">\n<p>Earlier today, I notified the market via the London Stock Exchange group that I would today lay a<br \/>\nStatutory Instrument to change the discount rate applicable to personal injury lump sum<br \/>\ncompensation payments, to minus 0.75%.<\/p>\n<p>Under the Damages Act 1996, I, as Lord Chancellor, have the power to set a discount rate which<br \/>\ncourts must consider when awarding compensation for future financial losses in the form of a<br \/>\nlump sum in personal injury cases.<\/p>\n<p>The current legal framework makes clear that claimants must be treated as risk averse investors,<br \/>\nreflecting the fact that they may be financially dependent on this lump sum, often for long periods<br \/>\nor the duration of their life.<\/p>\n<p>The discount rate was last set in 2001, when the then-Lord Chancellor, Lord Irvine of Lairg, set<br \/>\nthe rate at 2.5%. This was based on a three year average of real yields on index-linked gilts.<\/p>\n<p>Since 2001, the real yields on index-linked gilts has fallen, so I have decided to take action.<\/p>\n<p>Having completed the process of statutory consultation, I am satisfied that the rate should be<br \/>\nbased on a three year average of real returns on index-linked gilts. Therefore I am setting it at<br \/>\nminus 0.75%. A full statement of reasons, explaining how I have decided upon this rate, will be<br \/>\nplaced in the Libraries of both Houses. The Statutory Instrument to effect this change has been<br \/>\nlaid today, and will become effective on 20 March 2017.<\/p>\n<p>There will clearly be significant implications across the public and private sector. The government<br \/>\nhas committed to ensuring that the NHS Litigation Authority has appropriate funding to cover<br \/>\nchanges to hospitals\u2019 clinical negligence costs. The Department of Health will also work closely<br \/>\nwith General Practitioners (GPs) and Medical Defence Organisations to ensure that appropriate<br \/>\nfunding is available to meet additional costs to GPs, recognising the crucial role they play in the<br \/>\ndelivery of NHS care.<\/p>\n<p>The government will review the framework under which I have set the rate today to ensure that it<br \/>\nremains fit for purpose in the future. I will bring forward a consultation before Easter that will<br \/>\nconsider options for reform including: whether the rate should in future be set by an independent<br \/>\nbody; whether more frequent reviews would improve predictability and certainty for all parties;<br \/>\nand whether the methodology \u2013 which in effect assumes that claimants would invest only in<br \/>\nindex-linked gilts \u2013 is appropriate for the future. Following the consultation, which will consider<br \/>\nwhether there is a better or fairer framework for claimants and defendants, the government will<br \/>\nbring forward any necessary legislation at an early stage.<\/p>\n<p>I recognise the impacts this decision will have on the insurance industry. My Rt. Hon. Friend the<br \/>\nChancellor will meet with insurance industry representatives to discuss the situation.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Update on changes to the discount rate.<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"_links":{"self":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/79281"}],"collection":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=79281"}],"version-history":[{"count":1,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/79281\/revisions"}],"predecessor-version":[{"id":79299,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/79281\/revisions\/79299"}],"wp:attachment":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=79281"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=79281"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=79281"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}