Parliamentary Under Secretary of State in the Ministry of
Justice (): I announce
today the publication of a Call for Evidence on exploring the
option of introducing a dual or multiple Personal Injury Discount
Rate (PIDR).
The PIDR is important in ensuring that claimants who suffer
serious, life-changing personal injuries receive full damages,
including for their future financial needs. It is the percentage
figure used to help calculate how much a compensator (usually an
insurer or body such as the NHS) pays to a claimant, in the form
of a lump sum.
It is assumed that claimants will invest this lump sum and accrue
a return on that investment and the PIDR represents what the real
rate of return on this investment is expected to be.
Historically, the PIDR has always been set as a single rate
however, it can be set as more than one rate if supported by the
evidence. It has been argued that applying a single rate can
result in unfairness to claimants and that moving to a dual or
multiple PIDR could potentially be more accurate than using the
current single averaged rate.
Moving to a dual rate means having more than one rate which can
be targeted more specifically at claimants with shorter- or
longer-term injury awards. For example, it would allow for short
and long-term rates to be set with claimants switching from one
to the other after an appropriate length of time. Other
approaches include separate rates for different losses, such as
care costs or future lost earnings.
The Government Actuary explored this issue during the last PIDR
review in 2019, noting that the implementation of dual rates
might be considered as a means of providing fairer compensation
for both short and long-term claimants.
However, the Government decided that there was a lack in the
quantity and depth of evidence available at that time to conclude
that a dual rate was more appropriate than a single rate. A
commitment was, therefore, made to seek additional data and
evidence on this issue to inform future PIDR reviews.
This Call for Evidence is being issued in response to that
commitment. Its purpose is not to decide whether there should be
a change from a single to a dual or multiple PIDR. Instead, the
aim is to evidence and expert opinion on the pros, cons, effects
and impacts of a change to a dual or multiple PIDR approach.
The Call for Evidence will be open for a period of 12 weeks and
will close on 11 April 2023. A copy has been placed in the
Libraries of the House and a response document summarising the
key submissions and evidence provided by stakeholders will be
published in due course.
Copies of the Call for Evidence can be found here:
https://www.gov.uk/government/consultations/personal-injury-discount-rate-exploring-the-option-of-a-dualmultiple-rate(opens
in a new tab).
