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<p>On 27 February the Lord Chancellor reduced the personal injury discount rate set
under section 1 of the Damages Act 1996 to minus 0.75%.</p><p> </p><p>It would have
been unlawful for the Lord Chancellor not to have taken action once the consultation
and review process in relation to the discount rate was complete. Under the law it
is clear that the Lord Chancellor may not be influenced by the impact on defendants
in setting the rate.</p><p> </p><p>In setting the rate the Lord Chancellor complied
with the legal principles relevant to the setting of the discount rate and the Public
Sector Equality Duty under section 149 of the Equality Act 2010.</p><p> </p><p>The
Government acknowledges that the change in the rate will have significant implications
across the public and private sectors and has committed to review the legal framework
for the setting of the rate to ensure it remains fit for purpose in the future. A
consultation paper will be published before Easter.</p><p> </p><p>Following the consultation,
the government will consider whether there is a better or fairer framework for claimants
and defendants, and bring forward any necessary legislation at an early stage.</p>
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