Recent Changes Mean Better Deal For Seriously Injured
Published: 11th August 2017
Earlier this year the law was changed with regards to how lump sums are calculated for victims who have suffered, serious life changing injuries.
In this update the Ministry of Justice have cut the discount rate from 2.5% to -.75%.
To properly understand this you need a basic understanding of how compensation for life changing injuries works.
Compensation for life changing injuries is calculated on the premise that it will, in part, make up for loss of earnings, or to balance out any future expense that the injury may force the victim to incur. The discount rate is applied to act as a balance to the assumption that the victim will invest their compensation.
The higher the discount rate, the more will be deducted from the total payout amount, ergo, the less the victim gets. Previous to this change the discount rate has remained the same since 2001. However, during this 16 year period the world economy has changed a dramatic amount. Many things changed with it, but the discount rate did not. Therefore this review is a welcome one.
It is worth noting that it has been reduced from 2.5% to minus .75%, therefore this means that more compensation should therefore be awarded to victims of personal injury.
Law Society president Robert Bourns said:
“This reduction in the rate means lump sum damages payments will increase, and will result in a better deal for those who have been very seriously injured with consequences that are long term – for example, babies who have suffered brain damage at birth and require compensation to cover the support and adaptations they need to help them live as normal a life as possible.
“We welcome the fact this will result in fairer compensation for those who’ve been seriously injured and we now await the consultation.”
If you feel you have been the victim of personal injury, and may have ground for a claim just call Liddy’s today on 01226 731 314 to see how we can help.