Severely injured people, forced to gamble with their compensation to cover the cost of future support, could face having their damages cut further under Government proposals.

High-value damages payments are subject to a reduction to offset any interest that may be earned over time. Despite the fall in interest rates during the recession, the current ‘discount rate’ has not been reviewed since 2001, which the Association of Personal Injury Lawyers (APIL) warns is costing critically injured people the money they need for their care in the future.

“If a man is paralysed, for example, he is likely to need specialist equipment and therapies for the rest of his life. His damages to pay for these things are very carefully calculated by the courts, but under the current discount rate that money is being reduced too far and there is a very real danger it could run out,” explained APIL’s president Matthew Stockwell.