Reduction to the Special Account Rate for calculating claims for future expenses
In light of the Covid-19 pandemic, the Bank of England has reduced interest rates...Back to News and Events
In light of the Covid-19 pandemic, the Bank of England has reduced interest rates as an emergency measure and in a response to this, the Lord Chancellor has now reviewed the Court Funds Office rates of interest and has announced that these rates will change as of 1st June 2020.
Claims for personal injury can include claims for interest. The Special Account rate of interest applies to claims for interest upon the financial expenses aspect of an individual’s claim for compensation.
The interest is claimed from the date of loss up until the eventual settlement of the claim.
For any ongoing financial expenses past the date of settlement, interest can still be claimed, however at a rate set at half the Special Account rate of interest.
Prior to the 1st June 2020 this Special Account rate had been set at 0.5%, however it has been reduced further to 0.1% as at the 1st June 2020.
As highlighted above, any future claims for interest on financial expenses continuing into the future will be at half this rate.
This reduction in interest rates will obviously impact upon the potential value of claims.
Further, where claims settle on behalf of children or protected parties via Court approval, this announcement now raises the question of identifying alternative investments to provide security outside of the Court Funds Office, however this will of course be subject to Court approval.
Please be aware that the Personal Injury team at Poole Alcock can assist you in considering whether or not to bring a claim for compensation. Your claim will be dealt with by a Solicitor of at least 14 years’ experience and therefore we can provide you with answers to any queries that you may have before you start your claim. We are happy to have a free initial telephone conversation with you with no obligation to instruct Poole Alcock.