The current discount rate for personal injury cases in Northern Ireland was set at -1.5% in March 2022 and under the new framework, the rate will be reviewed on a regular basis to make sure it reflects any changes in market conditions.
By comparison, the applicable discount rate for England & Wales is currently -0.25% and in Scotland -0.75%.
The Government Actuary is to begin a review of the personal injury discount rate for Northern Ireland on 1 July 2024. As such, a consultation on the parameters for the 2024 review has recently opened wherein the Department of Justice is calling for views and evidence for consideration in whether any adjustment to the factors which are used to set the discount rate are required. It has also requested views on whether a single or multiple rates should apply in future. The consultation is due to close on 11 July 2023.
The concept of multiple rates has previously been explored but at that time, the government decided that there was insufficient evidence to conclude whether a dual rate would be more appropriate than a single rate.
It will be important for insurers and compensators to consider what impact different rates and approaches to setting the discount rate may have on current and future claims reserves.
Reviews will take place concurrently for England & Wales as well as Scotland in July 2024 so watch this space for future changes…
For further information on the consultation, please click here.
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