- May 30, 2017
- debt recovery
Many people will be aware by now that the government is making changes to the way compensation claimants are paid. They have produced a new formula for calculating compensation to benefit those who receive long-term injuries. As always though the issue is very confusing and many will be wondering just how this will affect any ongoing or future claims.
Here at Concept Law, we are here to offer advice and support on this matter:
What Has Changed In Terms Of Compensation Pay?
Up to now the amount of compensation that an accident victim received could be at a level which, if invested wisely could actually increase and provide a good cash return.
The compensation payout would, therefore, be reduced in order to provide fairness to the insurance companies – this is referred to as the ‘discount rate’.
The discount rate has for 16 years or so been set at a rate of 2.5% but the new rules now state it should be set at 0.75% to bring it more into line with current interest rates.
This new rate of 0.75% is intended to provide a greater compensation figure for victims but the insurance companies are understandably up in arms about it as it will cost them much more.
How Will The New Rules Affect Your Claim?
A consequence of these changes is undoubtedly the knock-on rise in insurance premiums. It is anticipated that more claims for compensation will be brought against motor insurers and against the NHS, for example for negligence claims.
Changes are also afoot concerning the amount of compensation that victims of minor injuries like whiplash will get with this expected to reduce. The proposed new rules could also mean that claimants may have to pay their own legal costs.
The main benefit for accident victims and other claimants will, of course, come in the form of higher payouts particularly for those with the most severe and life-changing or life-limiting injuries. However, if the rules regarding legal costs and reduced minor injuries compensation come in – 2018 is the current expected date – claimants may find it more difficult to claim and achieve a viable compensation amount.
Contact Concept Law Today
If you have been injured through no fault of your own it is important that you do not delay any claim for compensation. Our expert Nelson solicitors can advise you through the minefield of legislation and advise you on the best way to proceed.