ACSO comment on the Discount Rate decision

15 July 2019

ACSO comment on the Discount Rate decision

Commenting on the decision by the Lord Chancellor to raise the discount rate to -0.25% (from its current level of -0.75%, Matthew Maxwell Scott, executive director of ACSO (Association of Consumer Support Organisations), said:

“We welcome the change in policy that ensures levels of compensation for catastrophically injured people are now subject to proper review. Since the financial crash, the discount rate for many years hugely favoured insurers at the expense of injured people.

The Chancellor’s decision to set a -0.25% rate is a sober assessment of the facts, and regular reviews will ensure that the rate can be amended every five years to take account of interest rates, investment returns and other economic data.

It is of course vital that badly injured people get what the courts decide is due, and their funds are sufficient to enable them and their loved ones to get the best available care. In making his decision, The Lord Chancellor perhaps had in mind the risk of undersettlement bringing significant future problems, including the potential risk that the state has to step in after the compensation runs out.

The insurance industry is contracted to protect the public in the event of a serious injury, in return for which motor and many other insurances are compulsory. The discount rate must always reflect that contract, and meet the obligations of insurers to look after injured people, whatever the cost.”

For more information, please contact Ben Welsh 07568 382040

About ACSO

ACSO is a not-for-profit trade association which is supported by more than 30 leading claimant sector organisations. It was established in January 2019 to represent the interests of consumers in the civil justice system and the reputable, diverse range of organisations who are united in providing the highest standards of service in support of those consumers. Its role is to engage with policymakers, regulators, industry and the media to ensure there is a properly functioning, competitive and sustainable justice system for honest consumers.