Personal injury news update for week of 23 May 2013:
Much has been said already about how new Legal Aid rules have scaled back compensation amounts, but government inaction could be causing even more harm.
You may be unfamiliar with the concept, but when it comes to high-value personal injury compensation amounts made over several years, it’s routine to reduce the overall payment by any interest that could end up being earned over the course of the settlement amount. Well, the reality is that while the economic downturn saw interest rates plummet, the current interest rate on compensation awards hasn’t been adjusted in over ten years!
The Association of Personal Injury Lawyers brought this error to light during the week, with Matthew Stockwell, APIL president, warning that the severely injured could be left out in the cold when it comes to being able to afford absolutely essential medical care further down the line.
The last review of the interest rates in regards to payouts on personal injury claims occurred back in 2001 and, thanks to government inaction, has been languishing at that very same level up until today. Of course, the government has since decided to look at the current discount rate and how to update it, but APIL feels that governmental preoccupation with taking the bull by the horns when it comes to the so-called ‘compensation culture’ in the UK is only going to make matters worse.
The government actually wants to increase the discount rate, based on the fact that many permanently disabled successful claimants have been investing their compensation awards in high-risk schemes and reaping greater rewards. The problem with this is that these same disabled individuals have had to make use of such high-risk scenarios because the discount rate is so high as it is, as otherwise they run the risk of running out of funds before they die; taking even more money from these people will only make matters that much worse for them.