The Medical Defence Union (MDU) welcomed news that the personal injury discount rate (PIDR) in England and Wales has been increased, potentially saving millions of pounds in the costs of compensation payments.

Following a review, the Lord Chancellor Shabana Mahmood MP has determined that, with effect from 11 January 2025, the PIDR in England and Wales will be +0.5%, which is an increase from the current rate of -0.25%. This brings England and Wales into line with Northern Ireland and Scotland which increased the rate to the same figure earlier this year.

The PIDR is used to calculate personal injury awards for future losses such as care and loss of earnings: the lower the rate set, the higher the cost of compensation.

Responding to the announcement, David Pranklin, MDU head of claims, said:

"The Lord Chancellor’s decision to amend the discount rate to +0.5% is welcome. It will mean more money can be retained in the NHS to benefit patient care, which is more important than ever given the government’s reform agenda for the NHS.

"In recent years, changes in the PIDR have led to a huge increase in the cost of clinical negligence claims. This has had serious implications for the NHS, and for MDU members who have been shouldered with the increased costs. This change will provide some relief in the current difficult medico-legal climate.

"Despite today's good news, claims costs continue to rise and the plan to introduce fixed costs in lower value clinical negligence cases has stalled. The MDU has submitted written evidence to the House of Commons Public Accounts Committee into NHS financial sustainability, calling on the government to reform the current clinical negligence system to protect NHS finances. With the NHS under increasing pressure, now is the time to correct the flaws in the system."

MDU hopes claims costs will reduce following change to the PI discount rate

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