Oonagh McClure

The review, which has been welcomed by personal injury lawyers, was carried out by the government actuary under the methodology provided for by the Damages (Return on Investment) Act (Northern Ireland) 2022.

“The situation for injured people is fairer here in Northern Ireland now than anywhere else in the UK, where they must take bigger risks when investing their compensation,” Oonagh McClure of the Association of Personal Injury Lawyers (APIL) said.

The Department of Justice previously set the discount rate to -1.75 per cent in March 2021 as an interim measure – a dramatic change from the previous rate of 2.5 per cent.

It remains low as a result of high expected inflation in the short to medium term, low expected interest rates in the longer term and the anticipated returns on bonds and equities remaining low.

Commenting on the new rate, justice minister Naomi Long said: “It is important that those members of our society who have sustained serious injuries through no fault of their own are fully compensated for their future financial loss, whilst also ensuring that the way this is calculated is fair to defendants.

“Having provided for this through the Damages (Return on Investment) Act (Northern Ireland) 2022, I am pleased to see this provision applied, which will end the uncertainty about the rate.

“I welcome the government actuary’s first review and determination of the personal injury discount rate in Northern Ireland under the new legislative framework.”

Under the new framework, the rate will be reviewed on a regular basis to make sure it reflects any changes in market conditions and the next planned review will commence in July 2024.

South of the border, the discount rate, also known as the real rate of return, is currently determined by case law.