The Lord Chancellor should announce a decision this summer on the level of discount rates.
The Lord Chancellor should announce a decision this summer on the level of discount rates (the rates of return on investments used in calculating damages awards), following the closing of the review consultation period at the end of May.
Although the current rate is three per cent (set under Wells v Wells), in the case of Barry v Ablerex Construction, earlier this year, Mr Justice Latham lowered this to two per cent on the basis of reduced returns on index-linked gilts.
A general lowering of the discount rate would have the effect of increasing personal injury awards: the lower the discount rate, the higher the initial capital sum needs to be, and the higher the costs for insurers.
