Long welcomes changes to how personal injury discount rate is set

Date published: 07 December 2021

Justice Minister Naomi Long has welcomed the passing of legislation to change how the personal injury discount rate is set.

justice minister naomi long

The personal injury discount rate is a percentage applied to a lump-sum award for future financial loss, such as loss of earnings and cost of care, paid to a person who has suffered personal injuries.

The discount rate is applied to take account of the amount that would be expected to be earned from investing the lump sum. The award, as adjusted, should put the claimant in the same financial position they would have been in had they not been injured, without under, or over, compensating them.

Moving the Final Stage of the Damages (Return on Investment) Bill in the Assembly today, Justice Minister Naomi Long MLA said: “The passing of this Bill is a significant step towards providing for a stable discount rate in Northern Ireland that better delivers full compensation for claimants, whilst also ensuring fairness for defendants.

“The Bill is important to those members of our society who have sustained serious, perhaps life-changing, injuries through no fault of their own. For too long there has been uncertainty around the discount rate which has caused difficulties in settling claims for both claimants and compensators. I very much welcome bringing that uncertainty to an end through the passing of this Bill.”

The Bill has three main aims:

•        to introduce a new statutory methodology for calculating the discount rate that will better reflect how a claimant would be advised to invest their award;

•        to ensure that the rate is regularly reviewed, at least every five years; and

•        to transfer responsibility for setting the rate from the Department of Justice to the Government Actuary. 

The Bill, introduced to the Northern Ireland Assembly in March 2021, is expected to receive Royal Assent before the end of January 2022, following which a new discount rate will be set as soon as possible.

Notes to editors: 


  1. The Damages (Return on Investment) Bill was introduced to the Assembly on 1 March 2021 and completed Final Stage on 7 December 2021.
  2. It is a well-established principle of law that individuals should receive full compensation – but no more and no less - for losses suffered as a result of personal injuries that are not their fault. The personal injury discount rate is a percentage used to adjust lump-sum awards of compensation for future financial losses (such as loss of earnings) and costs (such as care costs) to account for the amount a claimant can expect to earn by investing their award.
  3. An interim discount rate of –1.75% was set in May 2021. At present, the rate has to be set with reference to returns on “very low-risk” investments. However, there are concerns that this approach results in overcompensation due to evidence that, in practice, claimants make “low-risk” investments. The discount rates in the rest of the UK are now set on that basis.
  4. The Government Actuary must review the discount rate under the new legislation as soon as it comes into operation. He is required complete his review within 90 days.
  5. Media enquiries should be directed to the Department of Justice Press Office via email to press.office@justice-ni.gov.uk.
  6. The Executive Information Service operates an out of hours service for media enquiries only between 1800hrs and 0800hrs Monday to Friday and at weekends and public holidays. The duty press officer can be contacted out of hours on 028 9037 8110.

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