There are hopes GP indemnity costs can come down in Scotland and Northern Ireland, following a decision to increase the personal injury discount rates (PIDR) in the two countries.
The discount rate determines the size of lump sum damages paid out to people who suffer serious and long-term personal injury, with the size of damages reducing when the discount rate increases.
Following a review by the Government Actuary, the discount rates were increased on 27 September to +0.50% in both countries, from a previous -0.75% in Scotland and -1.5% in Northern Ireland.
Responding to that announcement, David Pranklin, MDU head of claims said: ‘In recent years, reductions in the PIDR have led to a huge increase in the cost of clinical negligence claims.
‘This has had serious implications for the NHS and for MDU members who have been shouldered with the increased costs.
‘So, the determination by the Government Actuary to increase the rate in Scotland and Northern Ireland to +0.5% is welcome news. This will mean that more money can be retained in the NHS to be spent on patient care.’
The process of reviewing the PIDR in England and Wales is also underway and due to be completed by January 2025, with the MDU ‘hoping’ that their rates will also be increased from the current rate of -0.25%.
Mr Pranklin added: ‘Despite today’s good news, claims costs continue to rise. The MDU is calling for a package of reforms to tackle these rising costs including the introduction of fixed costs in lower value cases and change in the law that currently allows claims to be made for the cost of private care.’
GPs in Northern Ireland are not yet covered by a state-backed scheme although GP leaders have lobbied for years for it to be instated. Scotland also does not have a state-backed scheme covering independent contractors, although indemnity costs are lower.
In England and Wales, the system was changed in 2019 so that state-backed schemes automatically cover all GPs if they are providing NHS services, although it does not entirely remove the need to have their own indemnity cover.
What is the personal injury discount rate?
The personal injury discount rate (PIDR) is used to determine lump sum damages awards to people who suffer serious and long-term personal injury.
Damages are awarded to people who have endured life-changing events which have led to serious and long-term injuries. The lump sum payments are intended to provide people with full and fair financial compensation for all expected losses and costs caused by their injuries.
Where part of a claim for future losses is settled as a cash amount, the lump sum is calculated allowing for the:
- period over which losses and costs are expected to be met
- assumed investment return that the individual is expected to earn on the lump sum award after allowing for investment expenses, tax and damages inflation
The assumed investment return is referred to as the Personal Injury Discount Rate (PIDR).
Source: UK Government
