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New discount rate for personal injury claims

Article by: Makbool Javaid | Published: 15 March 2017

The Lord Chancellor has announced changes to personal injury compensation payments which will lead to a rise in the awards made in courts and tribunal cases, and the calculation of settlements. When compensation payments for personal injury claims are calculated, the actual amount is adjusted according to the interest the individual can expect to earn by investing it. In finalising the compensation amount, courts apply a calculation called the Discount Rate, with the percentage linked in law to returns on the lowest risk investments. The Discount Rate has been lowered from 2.5% to minus 0.75%, meaning that compensation payments will rise. In employment tribunals, the change will impact on awards for personal injury in discrimination claims and personal injury arising from a detriment in whistleblowing claims, where appropriate.


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