Injury lawyers have welcomed a judge’s rejection of a callous attempt by the insurance industry to continue to avoid paying full compensation to seriously injured people.
“For far too long, people with life-long and life-altering injuries have faced running out of compensation, or had to risk their compensation on uncertain investments to try to make up the shortfall because insurers do not have to pay the full amount needed,” said Neil Sugarman, president of the Association of Personal Injury Lawyers (APIL).
A discount is applied to compensation payments to offset the accumulation of interest (net of income tax and inflation) from the investment of the compensation, such as in a bank or building society. The rate has not been reviewed or altered since 2001 when interest rates were much higher than in recent years. Under the current rate, too much is deducted from compensation payments meaning severely injured people have lost millions of pounds.