Insurers Delaying Lump Sum Payments?

We reported, in the 210th edition of BC Disease News (here), on the Justice Select Committee’s publication, discussing future reduction to the current discount rate, set at minus 0.75%. In a recent article, published by the Financial Times, it has been alleged that insurers are delaying, or reducing, payouts to claimants. The discount rate has caused much controversy over the last year, with reform initially introduced by former Lord Chancellor, Elizabeth Truss.


The assessment of damage reforms, proposed by the government, in September of 2017[i], have further delayed the passing of legislation which could have reduced the size of settlements. It was expected that a new discount rate of between 0% and 1% would be announced. However, in November, the Justice Select Committee stated that further research on how victims invest their money is necessary.

Indeed, claimant personal injury lawyers have alleged that insurers are delaying their cases, or offering low settlements, because they are awaiting the implementation of an increased discount rate.

Brett Dixon, President of the Association of Personal Injury Lawyers (APIL), has commented that:

‘You’ve seen behaviour that is an attempt to avoid having settlement meetings. [The defendants] don’t want to have the discussion if they think the discount rate could change to something more favourable’.[ii]

However, Charles Ashmore, of the Forum of Insurance Lawyers (FOIL), contends that this is not the reality of the current situation, stating:

‘Our personal experience is that there has been no delay. It is not in insurers’ interest to delay settlement generally, as the longer claims go on the more they cost in terms of damages inflation and increased legal costs… Insurers and solicitors have continued to engage in settlement negotiations.’[iii]

It is clear, from the opinions of claimant and defendant representatives, on issues of settlement that tension still exists in the Ogden discount rate debate. Until the Government publishes definitive news that the rate will be changed, the debate is unlikely to be settled.


[i] ‘The Personal Injury Discount Rate, How it should be set in future, Draft Legislation’ (September 2017 Ministry of Justice)> accessed 6 January 2018.

[ii] <> accessed 6 February 2018.

[iii] Ibid.