Personal Injury Discount Rates In Scotland & Northern Ireland

26th September 2024

Personal injury discount rates (PIDR) in Scotland and Northern Ireland have been updated. PIDR determines damages awards to people with long-term injuries.

The personal injury discount rates (PIDR) in Scotland and Northern Ireland have been updated following the determination by the Government Actuary, completed on 24 September.

The PIDR is used to determine lump sum damages awards to people who suffer serious and long-term personal injury.

Purpose and use
Damages are awarded to people who have endured life-changing events which have led to serious and long-term injuries. The lump sum payments are intended to provide people with full and fair financial compensation for all expected losses and costs caused by their injuries.

Where part of a claim for future losses is settled as a cash amount, the lump sum is calculated allowing for the:

period over which losses and costs are expected to be met
assumed investment return that the individual is expected to earn on the lump sum award after allowing for investment expenses, tax and damages inflation,

The assumed investment return is referred to as the Personal Injury Discount Rate (PIDR).

GAD's involvement
The Government Actuary's reports cover the determination of the PIDR for both Scotland and for Northern Ireland. Following the Government Actuary’s review, the PIDR is set to change:

Scotland: from -0.75% to +0.50%
Northern Ireland: from -1.5% to +0.50%
The Damages Act 1996 and later amendments, set out how the PIDR is to be set by the Government Actuary in her role as the ‘rate-assessor’ as defined in the Act.

This legislation sets out various parameters that should be used to calculate the rate of return used to determine the PIDR such as the:

investment period
allowance for tax and investment expenses
damages inflation assumption
notional investment portfolio