Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Review of rate to calculate compensation for personal injuries to start on March 19

Published 19/03/2019, 08:39
Updated 19/03/2019, 08:39
© Reuters. A man enters The Ministry of Justice in London

© Reuters. A man enters The Ministry of Justice in London

(Reuters) - The first review of the rate used to calculate compensation for personal injuries will start on March 19, Britain's Ministry of Justice said on Tuesday, following an outcry from auto insurers over a drop in rates due to a change in rule.

The review, under the Damages Act 1996 as amended by the Civil Liability Act 2018, requires that the Lord Chancellor conduct the review and determine whether the rate should be changed or kept unchanged before Aug. 5.

Motor insurance prices in 2018 were pushed down by changes in the Ogden rate, used to calculate compensation for personal injuries, and the Civil Liability Bill, which includes reforms likely to reduce claims for whiplash injuries.

Vehicle insurers' profits were dented when Britain in 2017 unexpectedly cut https://uk.reuters.com/article/uk-britain-insurance-discount-rate/uk-to-change-personal-injury-payment-rate-in-boost-for-insurers-idUKKCN1BI15H the so-called Ogden discount rate to minus 0.75 percent from 2.5 percent previously.

A lower rate requires insurers to make larger lump sum payments on personal injury claims, as it assumes lower annual investment returns for that amount. The rate is currently linked to the yield on index-linked gilts.

An outcry from insurers led to a government consultation on how the rate is calculated.

The Ministry of Justice said in March last year that it would change the Ogden discount rate to lower costs for insurers and motor premiums for drivers.

© Reuters. A man enters The Ministry of Justice in London

Companies such as Admiral, Direct Line and esure and Hastings provide motor insurance in Britain's insurance sector.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.