For Claimants that have suffered a significant injury that impacts greatly on their lives and future, as well as receiving damages for their injury suffered, you also look at the financial losses which can be past, present and future.
To deal with past and present losses, it is a simple task of obtaining evidence i.e wage slips, receipts etc but in case of future loss of earnings and care claims, it is dealt with by a mathematical equation based specifically on the Claimants age, sex and education level and what is known as a discount rate. This discount rate is to reflect what the Claimant would have earned if it were not for the injury suffered.
Since 2001 the discount rate was at a level of 2.5%. On 27 February 2017, the Lord Chancellor and Justice Secretary Elizabeth Truss announced a new discount rate of minus 0.75%. In turn this announcement increased the value of claims by millions overnight and created dismay with Defendants and Insurers and therefore have challenged the Government to look at the rate and reduce it to one which is more reasonable.
On the other side of the coin, it would be argued that the rate hasn’t changed for 16 years and thus is wholly unjust to Claimants that have suffered significant injuries as a result of someone’s negligent act. A change was well overdue, but it can be highly expected that the rate will change again to something that is between the two to ensure happiness with the big insurance giants and a reflective and appropriate settlement for the Claimant.
It’s a waiting game.
Kerry Blomerus, Solicitor