The discount rate - out of (our) control

In the coming days, weeks and even months there will undoubtedly be a lot said about the further delayed discount rate review announcement. But while the debate continues, the reality for anyone handling claims that will be impacted by a decision, is that there is not much we can do about it.

Reflecting the British spirit of ‘keep calm and carry on’ my mind quickly turned to the things that perhaps we can influence, or at the very least, we should at least concentrate more of our efforts on trying to influence. Namely…..the multiplicands.

Here are some thoughts and questions to throw out for debate concerning aspects of high value claims that perhaps warrant scrutiny, (they will certainly be addressed by Keoghs over the coming months):

1. On one level, is it the case that everyone who is injured spends (or carries out work to the value of) £1500/£2000 per annum or more on their garden and DIY. Is everyone equally brilliant at such tasks? Do people really have the time to do that?
   
   
2. Further, is it right that the same figure applies wherever you are in the country? So do gardeners really charge the same in say Hull (notwithstanding its status as the City of Culture of course) as they do in Sandbanks? Has a lazy and easy practice been adopted of simply using a flat, and ever rising, figure?
   
   
3. Moving into an area where the figures become greater, but still on the same theme, what about care and case management? Are the rates being quoted really justified? Should case manager hourly rates be the same wherever in the country and keep rising? Are both parties, and most importantly the Claimant, getting value for money?
   
   
4. That perhaps moves us into the related subject of rehabilitation. Is that really working effectively in the claims arena? Is there proper analysis of what is provided, at what cost and to what overall benefit? Or is that another part that is out of control?
   
   
5. Changing tack slightly, with the advancements for example in prosthetics, are we really seeing the stated benefits in function, independence and quality of life being reflected in reduced care and other aids and equipment, or are the same figures still being trotted out irrespective?

Those are just some quick thoughts on the annual figures - there are of course more.

We do naturally need to be careful that any savings to be found in damages are not eaten up by the costs of both sides investigating these issues. Costs budgeting could be even more important. But with the amounts potentially at stake, further investigations are surely worth pursuing, a point echoed by my colleague Matthew Perkins in his briefing on the discount rate from a large loss perspective - see here for details.

One last thought. Will the coming months see the dynamic change in terms of the desire for PPOs in the most serious of cases?

You may have an idea what my own thoughts are on the above issues, but now is a good time to focus, or refocus, our efforts as claims handlers on those aspects of a claim where we can try and exercise more control.