The Association of Personal Injury Lawyers (APIL) says it is taking legal action because the Lord Chancellor has failed to review the discount rate, despite announcing in November of last year that a review was taking place.
The discount rate is used to calculate the amount deducted from an injured person’s compensation to account for any income he or she may receive from investing their damages.
In 2001, the rate was set at 2.5%, based on yields generated by index-linked government stock (ILGS).
Since then, yields on ILGS have gradually declined and according to APIL, over the last three years the average gross yield has been less than 1%.
APIL has now issued proceedings for a judicial review, stating that the Lord Chancellor has failed to complete a review or provide a timetable for it.
The Association’s president, Muiris Lyons, says: “We are gravely disappointed that the Government has failed to carry out its review as injured people are continuing to be undercompensated, in some cases, by hundreds of thousands of pounds.”
He adds: “It has been nine months since we first brought this issue to the attention of the Lord Chancellor and we find it unacceptable that no meaningful progress has been made since then.”
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