New personal injury compensation law will deliver ‘transparency’

Lump sum compensation payments after some accidents may be replaced by regular instalments under the proposed law. Picture: contributed
Lump sum compensation payments after some accidents may be replaced by regular instalments under the proposed law. Picture: contributed
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A new law to reform compensation for personal injury victims will achieve “fairness and transparency” in payments, a Holyrood committee has found.

The Scottish Parliament’s Economy, Energy and Fair Work Committee report follows its inquiry into proposed legislation setting out changes to compensation.

In these cases, a person claims compensation after being injured through the wrongful behaviour of another person or organisation.

The Damages (Investment Returns and Periodical Payments) (Scotland) Bill proposes the methodology for calculating the discount rate for payments.

The discount rate is an adjustment made to a lump sum award for future financial loss, such as ongoing care or lost earnings, in personal injury cases.

It adjusts the compensation paid to account for the notional rate of return if the money were invested. Under the proposed legislation the UK government actuary would set the discount rate.

The Bill would also allow Scottish courts to impose periodical compensation payments, rather than this being given as a lump sum.

Currently, periodical compensation payments can only happen when the parties involved in the case agree.

In its report, the committee agrees with the principles of the proposed legislation.

Committee convener Gordon Lindhurst said: “Although the number of personal injury cases where the discount rate applies is small, the importance of the process to the individuals and families concerned is considerable.

“The committee welcomes the introduction of this legislation and are content that it will iachieve fairness and transparency across a range of cases and for both sides.

“We heard compelling evidence for payments which allow those that have suffered a personal injury to receive lifelong compensation instalments.

“We ask the Scottish Government how it will promote the use of these periodical payment orders.”

A Scottish Government spokeswoman said: “We welcome the committee’s support for this important legislation.

“The focus of the Damages Bill will be to amend the law on the personal injury discount rate – making it fairer, clearer and more credible – and also enabling courts to impose periodical payments orders as an alternative to single one-off payments for personal injury awards where this is considered more appropriate.”