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Association of Personal Injury Lawyers

Insurers attempt to deny full compensation to severely injured people

20 Dec 2016
APIL news

Lawyers have branded the insurance industry’s legal attack on catastrophically injured people’s compensation “worthy of Scrooge himself”.

The Association of British Insurers (ABI) is challenging the Lord Chancellor’s decision to review the discount rate for personal injury claims.

The discount rate is a deduction made from large compensation payments made to people with severe, often life-long and life-limiting injuries. It is designed to offset any interest made from the investment of compensation payments and to ensure the amount received is no more, or less, than the injured person needs. The rate was last reviewed and set in 2001, when interest rates were much higher, which means that for years, too much compensation has been deducted from seriously injured people, to the tune of millions of pounds. The review is, therefore, long-overdue.

“The ABI is literally saying that it does not want to give catastrophically injured people the full support and funding they need, deserve and to which they are entitled,” said APIL’s president Neil Sugarman.

“A severely disabled child, for example, injured in a car crash caused by an insurer’s client will currently have his or her compensation reduced by so much that there is a real risk  the money will run out and his life-long needs will not be met. The money will remain instead in the pocket of the insurer who has already reaped the premiums while refusing to pay what is due,” he explained.

“Need I remind anybody that compensation paid to an injured person who may never walk, work, or be able to feed themselves again, is not a windfall? They absolutely should not have to make risky investments to eke out their compensation.

“The ABI’s legal challenge is a tactic to stall the result of the review so that the industry can continue to squeeze whatever it can from injured people for as long as possible,” said Mr Sugarman.

“To suggest that the Lord Chancellor has not been thorough in the review is beyond ludicrous. It has taken three years, two major public consultations, a hefty research paper, and a panel of specially selected experts to make this decision and the only right decision is for the rate to be substantially reduced,” he said.

The current discount rate is set at 2.5 per cent. Calculations by APIL put the correct rate at between -0.5 per cent and -1.0 per cent, based on gilt markets on 31 October.


Notes to editors:

  • APIL (Association of Personal Injury Lawyers) is a not-for-profit organisation whose members are dedicated to campaigning for improvements in the law to help people who are injured or become ill through no fault of their own.
  • For more information contact APIL's press and communications officers Jane Hartwell on t: 0115 943 5416, m: 07808 768623, e:, or Lizzy Freeman t: 0115 943 5431, e: 
  • Visit the association's website at
  • • Follow @APIL on Twitter:

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More past press releases

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0115 943 5416

Press & Communications Officer
Lizzy Freeman
0115 943 5431