Changes to compensation rates may become costly

03 Apr 2017

BLM's Rachel Rough has authored an article for today's The Scotsman examining the recently adjusted discount rate in Scotland.

She said: "Compensation is an essential part of the insurance system – if an individual is injured and can no longer work or needs care then a compensation payment can quite rightly support them for the rest of their life. Yet changes to compensation rates in England and Wales unveiled by Lord Chancellor Liz Truss in February – which changes have been adopted by Scottish Ministers for Scotland in March – have the potential to turn the whole system on its head – and force up the cost of cover for policyholders.

"When a claimant is receiving compensation to cover future loss of earnings or lifelong care, they receive a lump sum, which is discounted to factor in the investment income that the compensation payment will generate so that the claimant isn’t overcompensated."

To read Rachel's full article and be redirected to The Scotsman website please click here.

 

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Disclaimer: This document does not present a complete or comprehensive statement of the law, nor does it constitute legal advice. It is intended only to highlight issues that may be of interest to customers of BLM. Specialist legal advice should always be sought in any particular case.

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