In March of 2017, The Lord Chancellor Elizabeth Truss changed the way in which asbestos compensation is to calculated when she lowered the compensation discount rate.
When the amount a person receives from a compensation payment is calculated, it is adjusted according to the interest they can expect to earn by investing the lump sum payment. This is called the Discount Rate.
Craig Howell, asbestos specialist and a partner at Birchall Blackburn Law, says: “The change to the Discount Rate is welcome but overdue. We’ve felt that industrial disease and asbestos compensation claimants who have had future loss claims have been undercompensated. The people we work for face devastating and debilitating lung conditions and deserve a fair financial settlement.”
The Compensation Discount Rate was last changed in 2001, then it was based on a three-year average on Index Linked Gilts. The interest rate in 2001 was far higher than it is currently, especially since the Credit Crunch in the mid noughties, the implications are that the Discount Rate should have been far, far lower for some years. The Association of Personal Injury Lawyers (APIL) made a judicial review application in 2011 to attempt to promote a change in the rate but it has taken another six years to see that change.
From today (March 20, 2017) the Discount Rate will be lowered from 2.5% to minus 0.75%.
Craig says: “We’re pleased that the change will benefit our asbestos compensation clients with much higher future loss claims. It’s long overdue. It is good news for their future care and can make a real difference to their quality of life. Asbestos-related diseases have a serious impact on a person’s life and their families. Proper compensation is vital to pay for care workers, aids and equipment, changes to the home and car, cleaners, gardeners and other everyday tasks we take for granted.”