Personal injury discount rate proposal agitates authorities

The Association of British Insurers (ABI) and the NHS Litigation Authority (NHSLA) have distanced themselves from recommendations made in the latest edition of the tables used to calculate personal injury compensation.

The fifth edition of the Ogden Tables, released on 9 November, suggests alternative ways to calculate the “discount rate” – the adjustment made for inflation that guards against over-compensation. Currently, the Lord Chancellor sets this rate and does so by statute.

It is this aspect of the new edition to which the ABI and NHSLA object. In an appendix, they say the setting of the discount rate should remain under the Lord Chancellor’s control and that the Court of Appeal has confirmed this.

However, the Association of Personal Injury Lawyers (Apil) disagrees. Apil believes that either the Lord Chan- cellor should lower the current rate, or different rates should apply to different categories of damages.

Apil added: “We hope that the courts take the recommendations into account.”

The tables, first drawn up by Sir Michael Ogden QC and produced by the Government Actuary’s Department, are used by courts to assess damages due to victims of accidents in respect of future losses.

Factors that are taken into account include the length of time a victim will live – or might have lived, for fatal accidents – as well as their earning capacity and any assets they have.