By: 19 April 2024
Jonathan Scarsbrook stresses need for 100% compensation in catastrophic injuries cases

Assumptions about how individuals with catastrophic injuries invest their compensation do not reflect reality and must change ahead of the forthcoming discount rate review, APIL (the Association of Personal Injury Lawyers) has warned the MoJ (Ministry of Justice).


APIL has responded to the MoJ’s call for evidence “Setting of the Personal Injury Discount Rate.

In his statement, Jonathan Scarsbrook, the president of the Association of Personal Injury Lawyers (APIL), emphasised the crucial need for the UK government to uphold its commitment to ensuring 100 per cent compensation for victims of catastrophic injuries.

Scarsbrook’s remarks come in response to the government’s call for evidence regarding the setting of the discount rate, a decision with huge implications for the financial futures of those who have suffered life-altering injuries.

“The government said in this call for evidence it is committed to the principle of 100 per cent compensation and it must now deliver on that principle,” Scarsbrook stated.


Civil Liability Act

Central to the discussion is the Civil Liability Act, which outlines that damages awarded to victims of catastrophic injuries should be invested in a portfolio that is less risky than that of an ordinary investor. However, as Scarsbrook points out, the government failed to adhere to this requirement when setting the rate in 2019, leaving many claimants at risk of significant under-compensation.

Scarsbrook also highlighted the disparity between the government’s prescribed discount rate and the actual costs incurred by claimants. He noted that while the government’s current allowance of 0.75 per cent to account for tax and investment management falls short, a more accurate figure would be around 2.5 per cent annually. This discrepancy underscores the urgent need for recalibration to ensure that claimants receive the full and fair compensation they deserve.


Compensation for catastrophic injuries is not akin to the lottery

Moreover, Scarsbrook addressed misconceptions perpetuated by some within the insurance industry regarding the impact of the discount rate on insurance premiums. He emphasised that compensation is not akin to winning a lottery; rather, it is a vital lifeline for individuals who have endured devastating injuries. By prioritising the needs of these individuals, policymakers can ensure that the discount rate serves its intended purpose of allowing proper compensation for those most in need.


Image: Canva.
Emma Cockings
Emma is a content editor for Claims Media. Emma is a experienced writer with a background in client-centric personal injury for a major firm. She has attended and reported on multiple brokerage events throughout her career.