The recent agreement of the Lord Chancellor to review the discount rate of the personal injury lawyers has been welcomed by the Association of Personal Injury Lawyers (APIL).
The discount rate is nothing but a method that is used to calculate how much portion of money should be deducted after they receive the claim amount. The claim amount is for the damages that have happened to the injured person. As per the standard discount rate method, the percentage of amount deducted in the year 2001 was 2.5%. This discount percentage was taken into consideration after taking into consideration the index-linked government stock (ILGS). Ever since this was done the yields on ILGS have declined. As per APIL president Muiris Lyons the past 3 years have seen the yields being less than 1%.
Since long the injured people have been paid lesser compensation amount than they actually deserve. The major reason for this is because the government has failed to review and implement new discount rates taking into consideration the changes that have happened in the economy. In the past 10 years since when the discount rate has been stable at 2.5%. During this period the economy of UK has witnessed major economic slump and is continuing to recover from it. All this needs to be taken into consideration and new rates have to be implemented for the benefit of the injured people.
The Lord Chancellor has agreed to APIL’s appeal to review the discount rates and implement the revised ones soon.
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