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Discount rate to change again

7 September 2017

The Government's response to the recent consultation on the discount rate has been published today. The Government accepts that it is appropriate to set the rate based on low risk (as opposed to very low risk) investments, having regard to actual investment practices of claimants receiving damages awards. An increase in the rate can be expected, with estimates currently suggesting a final rate between 0% and 1%.

However, a change from the current minus 0.75% rate will not be immediate. Draft legislation has been published for scrutiny prior to its introduction. A review will be implemented within 90 days of the passage of legislation, and may take up to 180 days.

Defendants will welcome the prospect of an improved rate, which will reduce the cost of personal injury claims resolved after implementation.

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