Personal injury rule changes to be reviewed

CHANGES to personal injury payouts which would see insurance premiums rise sharply are to be “urgently” reviewed after a backlash from consumers and industry bodies.

Philip Hammond, the Chancellor, last night said the Government is to consult on the changes to the way personal injury compensation is calculated.

The consultation comes after it was warned that the NHS could face a £1 billion bill and car insurance premiums could jump by £1,000 a year for young drivers.

Justice Secretary Liz Truss announced the changes on Monday, admitting both the public and private sector would suffer a “significant” financial hit. But following a meeting with insurance sector leaders to discuss the personal injury discount rate yesterday, Mr Hammond said the system must be fair.

A joint statement from the Chancel- lor and the director general of the Association of British Insurers, Huw Evans, said: “Claimants must get the money they’re entitled to following an injury in order to support their future needs.

“It is important that going forward, personal injury discount rates are set at a level that is fair to both claimants and consumers

“The Government will progress urgently with a consultation on the framework for setting future rates and bring forward any necessary legislation at an early stage.”

Ms Truss surprised the insurance market on Monday by putting forward changes to the discount rate calculation.

Ms Truss said that from March 20, the rate would be cut from 2.5per cent to minus 0.75 per cent.

The Treasury said the changes announced by Ms Truss would still go ahead.