FOIL (Forum of Insurance Lawyers) welcomes the announcement today from David Gauke, the Lord Chancellor, that the first review of the Discount Rate under the Civil Liability Act will start immediately and a decision will be made by 5 August 2019 at the latest.
FOIL has provided evidence in respect of the setting of the Discount Rate to the Ministry of Justice and all parties agree that 100% compensation needs to be paid to severely injured Claimants. However, the current Discount Rate of -0.75% is, in FOIL’s view, unduly harsh on the NHS, public purse, motorists generally and insurers. FOIL considers that low risk Claimant investors will still achieve capital growth on their compensation sums by instructing Wealth Managers and IFA’s to manage a wide spectrum of portfolio investments. These investment strategies need to be taken into account by the Lord Chancellor and the Government Actuary when setting the Discount Rate.
FOIL hopes that the outcome of the Discount Rate review delivers a fair and just outcome for all parties without any over or under compensation.