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The discount rate is the interest rate used by courts to calculate lump sum compensation payments to victims of clinical negligence incidents and other personal injury claims.
In March 2017, the then Lord Chancellor changed the discount rate from 2.5%, which had been the level since 2001, to -0.75%.
The impact was profound. For example, a claim that would have settled for £8.4 million on the previous discount rate would settle for £17.5 million.
The discount rate rose slightly to -0.25% in August 2019, but that still means that higher value claims remain massively inflated when compared to 2017 values.
The Lord Chancellor's statement included the following commitment:
The Department of Health will also work closely with general practitioners (GPs) and medical defence organisations to ensure that appropriate funding is available to meet additional costs to GPs, recognising the crucial role they play in the delivery of NHS care.
Following pressure from the MDU and others, state indemnity for general practice was launched on 1 April but only for future claims arising from incidents on or after that date. Regrettably it does not address liabilities arising from incidents before that date for the great majority of English GPs. See the MDU's update for members or find out more about state-backed GP indemnity.
What does this mean for you?