Personal Injury Discount Rate Announcement

The Department of Justice in Northern Ireland recently concluded a consultation process on the Personal Injury Discount Rate following an announcement in February 2020 that consideration was being given to adjusting the Rate to   –1.75%. A discount rate of 2.5% has been in place since 2001 so this would have represented a very significant shift in the approach in NI compared with the rates adopted in England & Wales and Scotland. The consultation process invited submissions on the methodology for setting the discount rate in the future.


An update was provided by the Department of Justice to the Committee for Justice of the NI Executive on 22nd October 2020 confirming that the current Discount Rate of 2.5% will remain unchanged at present. This was surprising news  in light of previous indications that the rate may be set at -1.75% .  The Department of Justice (NI) has recommended that legislation be fast tracked  to deal with how the rate should be set in the future with a view to introducing the relevant legislation next year. There was a debate on the mechanics of the process for bringing forward the legislation and this remains a live issue for consideration.


It was also indicated that the preferred methodology for determining the rate is the Scottish model (where the rate has been set at -0.75%) even though the majority of responses to the consultation expressed a preference for the England & Wales approach (where the discount rate is -0.25%). The big takeaway from this briefing is that the discount rate of 2.5% remains for the time being.  It will be interesting to consider the rationale for the preference stated when the consultation summary is published and we will provide another update then.


The full meeting of the Committee for Justice of the NI Executive can be viewed here.


Kathy McGillie is a partner in the Dispute Resolution Department and leads the insurance disputes team, you can contact Kathy via email


Pauline Walker is an Associate Solicitor in the insurance disputes team, you can contact Pauline via email

While great care has been taken in the preparation of the content of this article, it does not purport to be a comprehensive statement of the relevant law and full professional advice should be taken before any action is taken in reliance on any item covered.