The Ministry of Justice has reportedly deferred the announcement of its proposed changes to the discount rate applied to personal injury compensation.
According to a report by the
Law Society Gazette, Lord Chancellor Liz Truss said in a statement to the London stock exchange on Friday that she was not in a position to make an announcement tomorrow, January 31.
Truss said that the review of the discount rate had taken “longer than anticipated.” The Lord Chancellor added that she “remains committed to making an announcement in February.”
Set by the Lord Chancellor, the discount rate is currently at 2.5% and has not been changed since 2001.
It adjusts personal injury damage awards to account for the expected return when a compensation lump sum is invested. It is designed to ensure that personal injury claimants are not under- or over-compensated.
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In December, the Association of British Insurers (ABI) launched a legal challenge to the Lord Chancellor’s decision to review the discount rate, calling on the government to change the methodology before proceeding. However, earlier this month, the High Court junked the industry body’s protest.
James Dalton, ABI director of general insurance policy, has criticised the Ministry of Justice for not sharing past findings and called its process “reckless and wrong.”
“Despite consulting over three years ago and not letting anyone know the outcome of that process, the Lord Chancellor seems to want to rush out a new discount rate at a time of significant global financial uncertainty,” Dalton said in a recent statement.
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