Personal injury lawyers have criticised the government’s proposed changes to the way the discount rate is set as well as its clampdown on how whiplash claims are paid.
The changes are included in the Civil Liability Bill which will be introduced to the House of Lords today (20 March).
The insurance industry has welcomed the bill, with some industry experts predicting it will lead to a discount rate of between 0 and 1%.
James Bell, partner in the clinical negligence department of Hodge Jones & Allen, commented: “We need to remember that seriously injured people, many with long term care needs, were undercompensated between 2001 and 2017 when the discount rate was set at the insurer friendly figure of 2.5%.
“The insurers made hay while the sun shone for 16 years. So, it is very disappointing to see the government rush through this legislation after only one year of the rate being set at -0.75%.”
Bell added that the legislation will “severely impact the seriously injured”, noting that the government should not prioritise it over “the other pressing needs of our society”.
He further argued that claimants who have been seriously injured in accidents “should not have to take any risk at all with their finances”.
Bell continued: “The discount rate must be set to meet the needs of seriously injured people, not to boost insurers’ profits.
“A life changing injury such as brain damage or a spinal injury could happen to any one of us and bribing the motorists with the thought that they will be refunded £35 per year by their car insurer is nonsense.”
In addition, Access to Justice spokesperson Andrew Twambley, said: “Since 2008, insurers benefitted from a very high discount rate (2.5%) at the expense of very seriously injured people.
“The government re-balanced the rate in early 2017 to make compensation fairer, but fairness is evidently not something insurers subscribe to, especially if their record-breaking profits and dividends are threatened.”
He continued: “We await the detail within the bill and note that the government has taken account of the recommendations of the Justice Committee Report.
“It is essential that the rights of critically injured people are upheld, and that the government acknowledges that protection against serious injury is why we all pay our insurance premiums.”
Article is care of www.insuranceage.co.uk