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Katarina Morgan, Dispute Resolution in Chesham

Personal Injury Discount Rate Set At -0.25%

July 23rd, 2019

Katarina Morgan, Dispute Resolution Solicitor in our Chesham office, explains the Personal Injury Discount Rate and the changes made after the latest review.

What is the Personal Injury Discount Rate?

The Personal Injury Discount Rate is a figure that is used when paying damages where the injured party receives compensation in the form of a lump sum payment.

Certain multipliers may be used to produce a figure which represents the present value of the prospective loss over that injured party’s lifetime; those multipliers take into account interest that can be earned by investing the compensation monies.

The discount rate is then applied to factor in the risk that investing that money may bring. That is why is has historically been a positive figure, meaning that the damages awarded are reduced. With the figure being negative, the discount rate actually increases the level of damages that are paid out, resulting in more money for the injured party.


What is the Personal Injury Discount Rate set at?

The Lord Chancellor has announced that from 5th August 2019, the Personal Injury Discount Rate will be set at -0.25%. Whereas historically the figure has tended to be positive, the last revision to the rate was in early 2017, when it was set at -0.75%.

This slight increase will come as a surprise to Defendant insurers who were probably hoping for a more aggressive rise to counteract the jump from the original discount rate of 2.5% to -0.75% two years ago.


What do the changes to the Personal Injury Discount Rate mean for Claimants?

Whilst the setting of the rate to -0.75% was welcomed by personal injury practitioners, the new rate of -0.25% is still a pleasant surprise. It means that Claimants can still seek to claim uplifts on their damages where the discount rate would apply, whereas historically it would have reduced the sums. It is a welcomed compromise to Claimants for the impending personal injury legislative changes that are to come.

Lennons Solicitors is a Buckinghamshire-based law firm with offices in Chesham, Amersham and Beaconsfield. Our “amazing” Personal Injury Department is recognised by The Legal 500 for their “simply excellent, smooth and client-focussed services”. If you need legal advice, talk to one of our specialist personal injury lawyers in Buckinghamshire today on 01494 773377 or email us at


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