Page 20 - PIC Magazine-Issue-27-Autumn-Winter

After the
Discount Rate
When Smaller Awards Need to Deliver More
When Smaller Awards Need to Deliver More
By Mark Holt, MD of Frenkel Topping Limited
20
What happens when
compensation has to work
harder than ever before?
Since the Personal Injury Discount Rate
increased to +0.5%, many claimants
are settling with less capital than they
may have received previously. Yet care
needs, accommodation requirements,
therapies and lost earnings have not
reduced. At Frenkel Topping, we are
increasingly seeing a common challenge
emerge ensuring smaller awards remain
capable of supporting long-term
needs over decades, not just years.
When compensation is expected to do
more with less, every aspect of a claim
matters, from robust evidence of future
losses to early fi nancial planning that
helps secure a claimant's future long
after settlement has been reached.
After the Discount Rate:
When Smaller Awards Need
to Deliver More
The change to the Personal Injury
Discount Rate (PIDR) from -0.25% to
+0.5%, eff ective from January 2025, has
understandably generated signifi cant
discussion across the serious injury and
clinical negligence sector. While much
of the immediate debate focused on
the mathematical impact on damages
calculations, the practical implications
for claimants are only now becoming
fully apparent.
Across the market, we are increasingly
seeing a common theme emerge: many
awards are now being settled at lower
levels than would previously have been
achieved, yet the underlying needs they
are intended to meet remain largely
unchanged. A claimant's requirement
for lifelong care, therapies, accessible
accommodation, specialist equipment,
case management or income
replacement does not reduce simply
because the discount rate has changed.
If anything, those pressures continue
to increase against a backdrop of rising
care costs, wage infl ation and ongoing
economic uncertainty.
www.pic.legal • Autumn/Winter 2026 At Frenkel Topping,
we are seeing a growing
challenge emerge: how
to ensure smaller awards
provide sustainable
fi nancial support
throughout a client's
lifetime, not just for the
short to medium term.
A Shift in Focus
Prior to the latest review of the Personal
Injury Discount Rate, much of the
industry's attention was understandably
centred on achieving the correct level
of compensation based on the available
evidence. While that remains the primary
objective, the conversation around
future losses appears to have evolved.
What we are seeing across the serious
injury and clinical negligence market is
a heightened focus on the relationship
between damages quantifi cation and
the long-term sustainability of an award.
The legal principle remains unchanged,
the importance of accurately identifying
and evidencing every aspect of
future loss has become even more
pronounced.
For claims involving substantial future
losses, relatively small variances
in earnings projections, pension
calculations, employment benefi ts
or other long-term costs can have a
signifi cant cumulative impact over the
lifetime of an award. In an environment
where compensation may have less
fl exibility than previously, the value of
detailed and robust expert evidence has
never been clearer.
Through Frenkel Topping's expert
witness services, solicitors are able to
access experts who can provide detailed
analysis of loss of earnings, pension
loss and wider fi nancial losses, helping
to ensure that the full fi nancial impact
of an injury is properly understood.
Modern remuneration packages are
rarely limited to basic salary alone and
can include bonuses, share options,
employer pension contributions,
healthcare benefi ts and other valuable
employment-related benefi ts that may
otherwise be overlooked.
The role of expert evidence is not
to increase a claim artifi cially but to
ensure that compensation refl ects the
claimant's true circumstances and
future needs.
Rather than changing the fundamentals
of litigation, the discount rate has
arguably reinforced the importance
of precision. For professionals across
the sector, the focus is increasingly on
ensuring that future losses are supported
by the strongest possible evidence,
enabling settlements to be based on a
clear and complete understanding of the
claimant's long-term fi nancial position.
The Growing Importance of the
Post-Settlement Conversation
Perhaps the most interesting
development since the discount rate
change has been what happens after
settlement.
This is particularly relevant in cases
involving younger claimants with
signifi cant life expectancy, where funds
may need to support future expenditure
over several decades.
A smaller award does not simply
represent a lower capital sum. It can also
mean that there is less fl exibility available
to absorb unexpected costs, infl ationary
pressures or changes in personal
circumstances.
The focus is on ensuring that investment
strategies, cashfl ow requirements and
future spending needs are fully aligned
from the outset.
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