Discount Rate Announcement

News

28/02/2017

The Lord Chancellor, Liz Truss yesterday (27 February) announced the change to the discount rate. The previous rate of 2.5% was set in 2001 in a very different economy. The conclusion of a review that started in 2010 is a reduction to -0.75%.

The Lord Chancellor’s reasons can be found here and the statement announcing the review includes a promise that the government is committed to ensuring that the NHSLA will have “appropriate funding to cover changes to hospitals’ clinical negligence costs” . Given the reduction in investment yields since 2001, it seems difficult to argue against the principle that there should be some reduction. However, the precise figure chosen has been branded “crazy” by the ABI in a statement predicting increased motor and liability insurance premiums and a £1billion increase in compensation payable by the NHS. The move has also prompted the CEOs of 15 insurers to meet the Chancellor asking him to intervene. Will the new discount rate wipe out the insurance premium savings promised after the MOJ’s whiplash reforms announced last week (and addressed by Ian Miller’s post on this blog)?

The announcement also includes a promise that a consultation will be brought forward by Easter to consider “whether the rate should in future be set by an independent body; whether more frequent reviews would improve predictability and certainty for all parties; and whether the methodology – which in effect assumes that claimants would invest only in index-linked gilts – is appropriate for the future.”

Latest News & Events

Post-placement order contact: necessary or desirable? Re S (Placement Order Contact) [2025] EWCA Civ 823

Bethany Hutchison considers a judgment handed down on 1 July 2025, by the Court of Appeal in Re S (Placement Order Contact) [2015] EWCA Civ 823 (“Re S”), giving detailed consideration to the issue of inter-sibling contact post-placement order. The guidance is much welcomed by…

The Dekagram: 8th July 2025

In the week the Hague Convention came into force, whilst the domestic courts heard an important appeal on Covid refund claims, Anirudh Mandagere and Tom Collins bring us all the latest news both internationally and nationally. And as always, members of Deka Chambers are at…

Tom Little KC and James Thacker KC provide training to the CPS Homicide Unit

On 1 July, chambers was delighted to welcome leaders and members of the CPS Homicide Unit for a training and social evening. First Senior Treasury Counsel and Joint Head of Chambers Tom Little KC, was able to draw upon his experience of prosecuting some of…

© Deka Chambers 2025

Search

Portfolio Builder

Select the expertise that you would like to download or add to the portfolio

Download    Add to portfolio   
Portfolio
Title Type CV Email

Remove All

Download


Click here to share this shortlist.
(It will expire after 30 days.)