With a further shift expected to the discount rate, Julian Chamberlayne questions how much under compensation is considered full compensation?
- What percentage of injured people is it acceptable to leave undercompensated when claiming to have a justice system providing 100% compensation?
After 16 years of manifest under-compensation using the 2.5% discount rate, it would seem that the minus 0.75% rate, which came into effect in March 2017, will soon be replaced.
Setting the discount rate has prompted voluminous commentary over several years of an extended consultation process. What I will be focusing on in this article is what is full compensation and what proportion of seriously injured claimants should we as a society be prepared to accept will be under compensated, while still claiming to maintain a framework of laws that provide for full compensation. In Pt 2 I will discuss the factors beyond investment risk that ought to be considered by the Lord Chancellor when setting the new discount rate.
The Ministry of Justice’s (MoJ’s) papers accompanying the draft legislation (echoing a point made in the preceding consultation) said:
