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michelle beckett

Posted 30 June 2017
by Michelle Beckett

Settlement Achieved the day the discount rate change was announced!

Michelle Beckett, Solicitor, was instructed by a 12 year old girl, Gemma who suffered a Group II right-sided brachial plexus injury at the time of her birth. The Trust subsequently admitted that the injury was negligently caused.

The expert orthopaedic surgeon instructed in the case advised that Gemma’s condition was reasonably stable, and therefore Michelle took steps to assess the appropriate level of damages, and explore whether an out of court settlement was possible. Claims of this nature very often settle by way of “Joint Settlement Meeting”, a negotiation meeting with the Defendant and their legal team.  Such a meeting in this case had been arranged to take place on 27 February 2017.

What is the discount rate?

Damages are commonly paid by way of lump sum and are calculated to include all losses and expenditure expected in the future. Calculations are undertaken using a set of published actuarial tables (known as the Ogden tables) and using a prescribed rate – fixed by the Lord Chancellor, and known as the discount rate.  The discount rate was fixed at 2.5% in 2001 and was long overdue for review as it was and is not, reflective of the current economic climate.

What happened?

On the morning of Gemma’s settlement meeting on 27 February 2017, the Lord Chancellor issued a statement that the discount rate would drop to -0.75%, with effect from 20 March 2017, a drop much more significant than had been anticipated.

Michelle heard of the announcement on the train on the way to the settlement meeting and whilst travelling, and indeed waiting for the settlement meeting to commence, had to undertake a complete recalculation of the future loss claims. This involved a number of complex and lengthy calculations which had to be undertaken in not the most ideal of circumstances! Having completed this task, it was back to the drawing board, and due consideration and advice needed to be given to the Claimant by Michelle and the instructed Barrister in advance of starting negotiations with the Defendant.

Negotiations were commenced and settlement was achieved at a figure of over double that valued the preceding day, before the rate change. This settlement was subsequently approved by the Court.

What is not known, is how long the current rate will stay in force. Following the announcement the government was almost immediately petitioned for a change. The outcome of a consultation to review the legal framework is awaited.  But in the meantime for Gemma, the significant award for damages will provide security for her future.

Tozers Solicitors proudly support Erb’s Palsy Group. Erb’s Palsy Awareness Week runs from 26th June – 2nd July 2017.

For more information on Brachial Plexus Injury or Erb’s Palsy as it is otherwise known as please visit:


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About the author

michelle beckett

Michelle Beckett

Associate and Solicitor

Associate in the medical negligence team