Following a public consultation process, the Damages (Return on Investment) Act (Northern Ireland) 2022 received Royal Assent on 2nd February 2022. This provided for the methodology to be used when setting the rate and gave responsibility for doing so to the Government Actuary.
The Government Actuary has now confirmed that the Northern Ireland Personal Injury Discount Rate will be set at -1.5% which, whilst providing some certainty for insurers and other stakeholders, will bring with it significant implications with the spectre of increased premiums and rising cost of claims .
The NI Discount Rate differs significantly from those discount rates applicable in England & Wales (-0.25%) and Scotland (-0.75%) and is set at a much lower rate than had been envisaged. Observers had previously anticipated a rate of around -0.75% however current economic conditions and increased inflation have presumably featured in the considerations of the Government Actuary.
The Northern Ireland Discount Rate of minus 1.5% will come into effect from today, 22nd March 2022, and will not be reviewed again until July 2024.
Further updates will follow – the link to the Government Actuary’s report can be accessed here .
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.
