New discount rate for personal injury claims set
Date published:
A new personal injury discount rate has been set following a review.
The Government Actuary has determined that the rate should be +0.5%. The new rate comes into effect on 27 September 2024.
Justice Minister Naomi Long said: “It is important that those members of our society who have sustained serious injuries through no fault of their own are fully compensated for their future financial loss, whilst also ensuring that the way this is calculated is fair to defendants.
“Given changing economic conditions, it is a benefit to both claimants and defendants that the discount rate is reviewed on a regular basis to make sure this important calculation remains as accurate as possible, in order that the principle of 100% compensation – no more and no less – is maintained in Northern Ireland.”
The personal injury discount rate is a percentage adjustment to a lump-sum award of damages for future financial losses received as a result of a civil claim by a person who has suffered personal injuries, for example, after a car accident or an accident at work. It is applied to take account of the amount that would be expected to be earned from investing that lump sum. The award, as adjusted, should put the claimant in the same financial position that they would have been in had they not been injured, without under-or-over-compensating them.
The discount rate has increased from the previous rate of –1.5%, primarily due to an increase in projected investment returns since the last review in March 2022.
The Department of Justice has today laid the report before the Assembly.The next planned review of the discount rate will commence in July 2029.
Notes to editors:
- The previous discount rate for Northern Ireland, set in March 2022, was –1.5%.
- The methodology for setting the personal injury discount rate is provided for in the Damages Act 1996, as amended by the Damages (Return on Investment) Act (Northern Ireland) 2022 and modified by the Damages (Process for Setting Rate of Return) Regulations (Northern Ireland) 2024. The 1996 Act can be viewed at: www.legislation.gov.uk/ukpga/1996/48/contents and the Regulations at: www.legislation.gov.uk/nisr/2024/137/contents
- It is a long-established legal principle that individuals should receive full compensation – but no more and no less – for losses suffered as a result of personal injuries that are not their fault. The personal injury discount rate is a percentage adjustment to a lump-sum award of compensation for future financial losses (such as loss of earnings) and costs (such as care costs) to account for the amount a claimant can expect to earn by investing their award.
- The 2022 Act provided that the task of reviewing and setting the rate falls to the Government Actuary. The report can be viewed at: www.gov.uk/government/publications/review-of-the-personal-injury-discount-rate-in-northern-ireland
- Media enquiries should be directed to the Department of Justice Press Office via email to press.office@justice-ni.gov.uk.
- The Executive Information Service operates an out of hours service for media enquiries between 1800hrs and 0800hrs Monday to Friday and at weekends and public holidays. The duty press officer can be contacted out of hours on 028 9037 8110.