The Law Society has responded to the Ministry of Justice's (MoJ) consultation on the future of the personal injury discount rate, which opened on 30 March.
Key points asked by the consultation were:
- Should the methodology for calculating the discount rate be changed?
- Does the discount rate methodology accurately reflect claimant investment behaviour?
- Should there be a fixed period of review of the discount rate?
- Should periodical payment orders (PPOs) be used more widely? How could this be achieved?
- Who should review the discount rate?
In its response, the Law Society put forward a number of points including:
- The longstanding legal principle of 100 per cent compensation should not be undermined by any change to the methodology for setting the discount rate.
- The MoJ should commission further and more in-depth research into claimant investment behaviour before changing the methodology for setting the discount rate.
- The lord chancellor should no longer have a role in the setting of the discount rate.
- PPOs should not be forced upon claimants; claimants should always have a choice between a lump sum and a PPO.
- Regular review of the discount rate will be of benefit to both claimants and defendants.
The Law Society's full response can be downloaded here.