So, your child has been injured and you’ve successfully sued for damages…
Published: 23rd May 2020
The court approves the settlement. What happens now? Normally the damages would be paid by the defendant into court, where it is managed until your child is 18. It would then be paid out to your child, having built up a bit of interest. Well, as of 1st June 2020, the interest rate that the money earns is a whopping 0.1% per annum. So £1,000 would earn £1 each year it was held. Annoying for your child, but the same will apply to people who have recovered damages where they no longer have capacity to make decisions. Often they will need the money to last them for their life time. With inflation currently running at 2.6% (RPI) any money invested in court will lose value in real terms.
In comparison, even a simple savings account will pay interest of between 1% and 1.05% depending on the amount invested. It makes a big difference. For every £1,000 invested you could earn £10 a year rather than £1.
Even at 1% any money invested reduces in purchasing power every year, but it is far better than leaving the money to be managed by the courts. In most cases now, your solicitor should make efforts to persuade the court to allow the money to be invested in something safe, but with better returns.
The courts know that their interest rate is dreadful and we are finding them willing to be persuaded to allow the money to be invested privately.
It is important that you get proper advice before any award is approved by the Court so that alternatives can be presented to the judge. We don’t advise on investments, but can present to the court safe alternatives which will be much better than leaving it with the court. Or you could get help from a financial adviser on a safe investment.
If you need more information and advice about your options telephone us on 01226 731 314.
Everyone at Liddy’s Solicitors treated our very distressing complaint with extreme sensitivity and we were helped at every stage with the decision making, which sometimes was very hard to make, but they were very reassuring and supportive when emotions were high. We thank them for their continued professionalism during this period of time dealing with our beloved mother/nanas medical negligence and are thankful for their continued persistence in highlighting this treatment on our behalf. We hope this final outcome will at least go towards any other families having to go through such heartbreaking loss.
Liddy’s Solicitors Client – March 2020