The Government Actuary has outlined that the personal injury discount rate in Scotland should remain unchanged at -0.75%.
The decision follows the completion of a review on September 27. The rate is used to determine lump sum damage awards to people who make legal claims after suffering personal injuries.
Reacting to the announcement, representatives from the Scottish arm of the Forum of Insurance Lawyers characterised the result as “very disappointing.”
“Today the Government Actuary submitted a report to the Scottish Ministers recommending that the Scottish personal injury discount rate be fixed at -0.75%,” representatives said. “Following review, the discount rate in England and Wales has been -0.25% since August 05, 2019. It is likely that we will now have different discount rates north and south of the border for several years to come.
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“The lower Scottish rate means that Scottish claimants will receive higher compensation payments. The differential is therefore likely to result in injured people raising claims in Scotland rather than England and Wales if they can. It is feared that this forum shopping will cause delays and higher costs.
“The new rate is very disappointing for the insurance industry which considers that the rate does not adhere to the principle of 100% compensation. This new rate artificially boosts compensation payments well beyond those being paid in the rest of the UK. As a result, it is likely to mean increased costs which will have to be borne by Scottish taxpayers and policyholders.”