The government has begun its review into the Personal Injury Discount Rate, which is used to help calculate the amount of compensation people suffering life-changing injuries should receive. The PIDR was last set on 15th July 2019 at -0.25% in England and Wales. Scotland and Northern Ireland have their own rate.

Under the Civil Liability Act 2018, there is a statutory obligation to review the rate every five years. Once the review begins a decision must be made within 180 days.

Alistair Kinley, director of policy and government affairs at Clyde & Co, said: “The review could take up to 180 days - potentially into January 2025 - and during this period a realistic and informed approach to settlement negotiations will be essential. And very close attention will need to be given to the outcome, in early October, of the formula-based PIDR reviews in Scotland and Northern Ireland.

“We’ve always had a single PIDR in England & Wales and despite the Ministry of Justice exploring potential dual discount rate models in 2023, our current thinking is that a single PIDR model is likely to be retained. Dual rates could increase complexity, cost and delay, none of which seems to be in the interests of ensuring fair and timely compensation in severe injury claims.”