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Personal Injury Solicitors

LMS v East Lancashire Hospitals NHS Trust – New discount rate applied in first personal injury settlement (23 March 2017)

Date: 23/03/2017
Duncan Lewis, Personal Injury Solicitors, LMS v East Lancashire Hospitals NHS Trust – New discount rate applied in first personal injury settlement

Schoolgirl is first reported recipient of damages under new discount rate following key changes made by Justice Secretary, Liz Truss.

In late February, Liz Truss, the Lord Chancellor, announced that the government would be cutting the “Ogden” discount rate from 2.5% to -0.75%, which was argued to likely result in a significant increase in the value of compensation claims awarded to successful personal injury claimants.

The Ogden rate is the assumed rate of return on investing a lump sum that may be received by a personal injury client, should their claim be successful. This rate therefore underpins the compensation formula, and will only apply to those clients who have suffered serious or life changing injuries including a claim for future loss of earnings, pension or care. The discount rate is applied to claims for future loss of earnings, pension or care and it is therefore crucial in determining the amount to be awarded in a successful personal injury claim – that is, the amount to be paid by insurance companies or public sector bodies, such as the NHS or Government.

We have now seen the changes in practice, with the first claimant, a 10-year-old schoolgirl who has cerebral palsy following complications at birth, being awarded a £9.3m settlement. This is an increase from what would have been a £3.8m settlement prior to the changes made by the Ministry of Justice.

The claimant’s solicitor welcomed the settlement, describing the benefit as “immense” and vastly improving the “long-term financial ability to meet her needs for the rest of her life”. Michael Redfern QC, the claimant’s counsel, stated the new discount rate “addresses the actual lack of meaningful return on safe lump-sum investment opportunities”. Importantly, he also points out that the new discount rate only benefits the claimant and “has no impact on legal costs”, addressing arguments that lawyers were only in favour of the Ministry of Justice’s changes so to line their own pockets.

Some parties, such as the Guardian and the Association of British Insurers (ABI), have argued that this will be heavily to the detriment of the health service and to insurance companies. The ABI reports some of its members have already increased premiums as a result.

The Association of Personal Injury Lawyers (APIL), however, argued that the change was “long overdue”, and gives reassurance to victims of life-changing injuries. Therefore, personal injury claimants are now well-positioned to receive the compensation they deserve for life-altering injuries, and Duncan Lewis Solicitors urges all those who may have suffered such injuries to get in touch.

Rebecca Thomas, Director of Clinical Negligence and Personal Injury at Duncan Lewis Solicitors comments:

“The review of the discount rate is long overdue and means that seriously injured clients will be able to afford the care and support that they need. The insurers and Government have been under compensating seriously injured Claimant’s for many years and this has finally been recognised and redressed”.

Rebecca Thomas is a Director of Clinical Negligence at Duncan Lewis. Rebecca has over 20 years’ experience in her field and represents clients in a wide range of cases including claims involving cosmetic and dental negligence, surgical and orthopaedic injuries arising from delay, misdiagnosis or negligent spinal surgery, gastrointestinal and ophthalmic surgery.

Duncan Lewis Person Injury Solicitors

Duncan Lewis Personal Injury Solicitors have extensive experience representing clients who have sustained injuries as a result of accidents. Duncan Lewis’ no win no fee personal injury solicitors are proud of their reputation for being caring and considerate and for working tirelessly to achieve the best possible outcome for their clients. Personal injury claimants usually have three years from the date of the injury to make a claim for accident compensation. Because of the limitation period for personal injury claims, it is important to seek legal advice from Duncan Lewis personal injury solicitors as soon as possible if you are injured in an accident. Family members can call Duncan Lewis for advice on making a claim if someone close to you has been injured and is still recovering in hospital.

For expert legal advice call Duncan Lewis Personal Injury solicitors on 0333 772 0409.


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