New Personal Injury Discount Rate for Northern Ireland

Friday 25 March 2022

The New Personal Injury Discount Rate set at -1.5% for Northern Ireland

A review of the Discount Rate in Northern Ireland has now taken place. The review was carried out by the Government Actuary using methodology laid out in the The Damages (Return on Investment) Act (Northern Ireland) 2022. Accordingly, the new personal injury discount rate was set at -1.5% and came into effect on 22nd March 2022.

The personal injury discount rate is a percentage which is applied to lump sum awards for future losses, typically loss of earnings or cost of care in cases involving serious, and often life-changing injuries. The percentage is used to reflect what would happen if the lump sum were to be invested.

It is a long-established principle that individuals should receive full compensation which aims to put them in the same financial position as they would be had they not been injured. Finding the balance between a claimant being fully compensated and not over or under-compensated has caused much debate over the last number of years.

Northern Ireland has lagged behind the rest of the UK with a discount rate of 2.5% up until recently, when in May 2021 an interim discount rate was set at -1.75%. This meant that, prior to the introduction of the interim rate, claimants arguably were undercompensated when compared with their counterparts in the rest of the UK. The formal introduction of the new discount rate of -1.5%, however, stands to rectify this and is set to provide a stable and fair rate for both claimants and defendants in Northern Ireland.

It is expected that the new discount rate will be reviewed at least every 5 years to ensure that the rate continues to provide fair and adequate compensation for claimants.

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