Discount rate change in Scotland will further increase legal costs

THE Scottish Government has announced its intention to follow the decision made in England by the Lord Chancellor to cut the discount rate applied to personal injury claims from 2.5 to -0.75 per cent. This will result in an increase in the size of compensation payments, leading to significant new costs for the NHS in Scotland and medical defence organisations (MDOs), such as MDDUS.

MDDUS chief executive Chris Kenny commented: "Today’s reduction in the discount rate is good news for lawyers, but bad news for the NHS. It adds avoidable pressure on NHS resources and doctors’ and dentists’ subscriptions to medical defence organisations.

"It is disappointing that Scottish ministers have chosen to follow their English counterparts in this potentially legally flawed decision, particularly when consultation on an improved system in England is expected in a matter of days. We will be seeking urgent assurances from Scottish ministers about their plans for improvement, and how they plan to tackle the funding consequences for the NHS in Scotland and our members."

Commenting further on the impact on the NHS and individual clinicians in England following the Lord Chancellor’s decision, Chris Kenny said: "As the UK's second-largest provider of indemnity for GPs, the Chancellor’s confirmation of the £6billion cost of the discount rate change increases our concern for our medical and dental members. It makes no sense to proceed with a decision on this scale when Government itself has clearly indicated that the system needs to change – and change urgently.

"For that reason, honouring our pledge to explore all necessary action to protect our members, we have today (10 March) written to the Lord Chancellor. Advice from Leading Counsel indicates that her decision may be legally flawed, both in its process and its reasoning.

"We are therefore seeking as a matter of urgency the disclosure of a number of documents to enable this to be explored further and are urging her to stay implementation of the rate change until the further work promised by the Chancellor of the Exchequer and the Department of Health has concluded."

MDDUS believes that this is a constructive approach to lessen current uncertainty. Said Kenny: "We do, of course, reserve the right to take any necessary further action if we conclude that is necessary having studied the Lord Chancellor's response."

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