Lawyers warn that people with the most serious, life-changing injuries have been significantly undercompensated while insurers have “quietly reaped the profits”.
A debate in the House of Lords tomorrow (18 July) will address a “motion to regret” the correction earlier this year of the ‘discount rate’ (sometimes referred to as the ‘Ogden rate’) for calculating personal injury claims.
“Since the correction of the discount rate the insurance industry has to pay full compensation to catastrophically injured people for the first time in years,” said Brett Dixon, president of the Association of Personal Injury Lawyers (APIL).
“The change was of no surprise to anyone. The very fact that it plummeted from 2.5 per cent to minus 0.75 per cent shows that the rate has been out-of-date for far too long. During this time insurers quietly reaped the financial benefits of not having to pay what they owe to people with life-long, life-changing injuries,” he said.
“Yet the insurance industry has been vociferous in blaming the correction for rising motor premiums. It is scandalous that the blame for the mismanagement of the discount rate is being put at the door of seriously injured people.
“This affects people with long-term financial losses, such as loss of earnings and the cost of round-the-clock care. When insurers don’t pay for these needs as they should taxpayers, through the State, must pick up the tab”.