2017 saw a number of decisions that highlight an appetite for
reform in the legal framework surrounding personal injury claims in
England and Wales. Although in most respects these have not yet
resulted in concrete changes which bind defendants, insurers will
want to consider the impact of them on strategy and quantum for
claims which are still at an early stage.
The changing discount rate
Where personal injury (including fatal accident) claims involve
an element of future loss, the amount of damages paid by a
defendant is adjusted to avoid overcompensating (or
undercompensating) a claimant who receives monies as a lump sum. A
discount rate is applied to adjust the award to take into account
the return expected over time when this lump sum is invested. As an
example, in a loss of earnings claim, a claimant might be entitled
to his or her lost salary (say £20,000 per annum) for a five
year period in which he or she is unable to work. If he or she
receives the full
