Personal injury claims are often settled on a lump-sum basis, rather than a periodical payments order being made. When a lump sum is awarded, the court will discount the amount awarded to account for the claimant’s anticipated investment of the sum. The rate is set by the Lord Chancellor, but it has not been revised for over a decade. Many commentators have suggested that the discount rate needs be revised more regularly.  

Many investments are no longer the safe harbour they were once thought to be before the recent financial crisis. It is said that successful claimants should not be forced to bet on a risky portfolio of investments to pay for care and the overriding consideration must be a full award of compensation for the claimant.

It is becoming increasingly likely both that a review of the discount rate and a future system of more regular reviews is going to happen.  

The most recent newspaper coverage on this issue was an article in The Times by Paul Kitson. For more details, read the full article “Accident victims may be forced to gamble with compensation” at http://www.thetimes.co.uk/tto/law/article3584227.ece.