A Tynwald motion from Treasury is ‘massively devastating for victims of personal injury’.

That is according to one individual who would be impacted by the move, which would see a reduction in the amount of money that some personal injury victims would receive in compensation.

Individuals are entitled to compensation if they have been injured in an accident that wasn’t their fault.

The move only impacts those with a significant injury, where it has a large impact and is likely to persist for a long time.

For those eligible, a court can award personal injury damages in the form of a one off lump sum payment or as a Periodic Payment Order.

This money is paid out by either insurance companies, or the Isle of Man Government in some cases.

For those who receive the damages as a lump sum, a personal injury discount rate can apply.

A spokesperson for Treasury explained: ‘The final figure awarded to victims of life-changing injuries can be adjusted by the courts through the personal injury discount rate (PIDR).

‘This is designed to reflect the interest that is expected to be earned by investing the award, as well as the effect expenses may have on returns, such as taxation and inflation.’

The discount rate is currently –0.25% which is in line with England and Wales.

But Treasury Minister Alex Allinson is looking to change this to 1%.

The proposal would see a significant change in the amount of money claimants receive.

To calculate how much would be needed over the claimant’s likely lifetime, a multiplier is applied to the claimant’s financial needs, for instance the earnings they will miss out on, the cost of care needed.

The multiplier takes into account age, gender and mortality risks to arrive at the figure.

To work out how much to deduct to account for interest on the sum provided, the discount rate is applied.

The Ogden Tables list the multipliers which apply at each various discount rate, meaning that the percentage discount applied is more than 1%.

The lower the rate, the higher the settlement of a claim is likely to be.

One claimant said: ‘The proposed change to 1% will leave victims of personal injury in the Isle of Man being severely less compensated than they would be today.

‘This amount is ranging from around 13% to over 25% less than today’s rate at -0.25%.

‘The younger a person is, the less they will receive in compensation to live the rest of their life with, and this proposal will make them struggle and run out of funds that much earlier, while allowing those who are responsible for the horrific injuries they have suffered a further discount of the above said amounts.’

In the explanatory memorandum for the proposal, Treasury said: ‘The Order has the possibility of reducing costs incurred by Government in relation to current ongoing (unsettled) and future personal injury damages claims brought against the IoM Government.’

A spokesperson for Treasury said: ‘This figure is set through legislation by the Isle of Man Government as a guide which may be applied by the courts. The Treasury has responsibility for setting the PIDR in the Isle of Man and any change is subject to the approval of Tynwald.

‘It’s important to note that legislation allows any other discount rate as considered appropriate by the court in question to be applied.

‘The Treasury first prescribed a PIDR in the Island in 2013 and the rate is subject to periodic review in consultation with the UK Government Actuary Department. A full review took place in 2019 but its findings were immediately affected by the impact of the pandemic on world investment markets.’

They added that an interim review was recently completed with a discount rate of +1% determined as suitable.

‘Those who have already suffered from devastating life changing injuries through no fault of their own, will feel they are being punished again.’

The motion is set to go to Tynwald next week for approval.

The treasury is also looking to introduce periodic reviews for the personal injury assumed rate of return.