Call for end to disparity in Northern Ireland accident victim payouts
People in Northern Ireland are still receiving far less in compensation awards for personal injury claims than those in the rest of the UK.
The Ministry of Justice (MoJ) this week confirmed that the personal injury 'discount rate', which is used to assess compensation for serious personal injury claims, has been raised from -0.75% to -0.25%.
Also known as the Ogden rate, it calculates payments for people who are seriously injured in car crashes, industrial accidents or botched operations.
The new rate comes into effect in England and Wales from August 5.
Although it will cut the amount insurers have to pay, severely injured people in Northern Ireland have been stuck on 2.5% for years, as no changes can be implemented in the absence of the power-sharing government.
It means claimants in Northern Ireland will be subject to far greater deductions on compensation until Stormont is restored.
Described by the MoJ as an adjustment calculation, the new discount rate is intended to reflect the interest claimants can earn from investing their lump sums, as well as the effects of tax, expenses and inflation.
The deduction, or discount, is made by the courts to large lump sum compensation payments to offset the expected return injured people could make from investing the money.
The higher the Ogden rate, the less insurers have to pay out as a lump sum.
The idea is that the rate ensures claimants are in the same financial position as they would be had they not been injured. The MoJ has said the current rate "has led to concerns" that claimants were being "substantially over-compensated".
Back in 2017, the discount rate was lowered from 2.5%, where it remains in Northern Ireland, to its present level of -0.75%.
Gordon Dalyell, president of the Association of Personal Injury Lawyers, has called on the Department of Justice (DoJ) here to bring Northern Ireland in line with the rest of the UK.
He said: "Injured people in Northern Ireland must take greater risks to make their money stretch to meet their needs for life. But risk does not always mean reward, as their compensation could run out.
"It is wholly unfair for vulnerable people and their families to have to live with this terrifying uncertainty.
"The disparity needs to be addressed immediately and the power to change that rests with Stormont.
"It cannot be right that people with life-long, life-changing injuries in Northern Ireland are subject to a discount rate which is deemed no longer appropriate elsewhere in the UK.
"We want to see injured people in all jurisdictions treated in the same way and I will be urging Northern Ireland's Department of Justice to bring the region in line with the rest of the UK."
A DoJ spokesperson said yesterday: "The department has been keeping the discount rate in Northern Ireland under review, awaiting the settled position regarding the discount rates in the rest of the UK.
"While we are aware of the Lord Chancellor's written statement of July 15, we have also been awaiting the settled position in Scotland.
"In that regard, the rate-assessor (the Government Actuary) started his statutory review on July 1. This must be completed within 90 days. Following that, we will consider this matter further.
"In the interim, it is worth noting the power in section 1 (2) of the Damages Act 1996 for a court to take a different discount rate into account, where a party can show that it is more appropriate."