The Isle of Man is set to follow the UK when setting framework rates for awarding personal injury compensation payments.

The UK Government has just completed its review, which was instigated after controversial changes to the system over there - specifically how a ’discount’ was deducted to take into account interest accrued on a lump sum payment - led to fears that the financial implications could cripple the National Health Service with multi-million-pound additional costs.

The new discount rate was actually a negative discount - moving from 2.5% to minus 0.75% - effectively increasing the amounts awarded.

But the Isle of Man kept the previous rate at 2.5% and decided to maintain a watching brief before making any changes.

The UK now looks set to scrap the negative discount and introduce a new framework, with an independent body advising on rates that would be reviewed every three years.

Treasury Minister Alfred Cannan said: ’The Treasury believes that the revised framework and methodology for setting future personal injury discount rates (PIDRs) in the UK is based upon sound analysis and consideration of input from all relevant stakeholders.

’As such, it is proposed that future IoM PIDRs should be set after consideration of rates that follow under the new UK proposals.’

As yet no timetable has been set to bring in a revised rate in the UK.

Mr Cannan (pictured) added: ’Following enactment of the new framework, a review of the UK PIDR will be initiated within 90 days and thereafter completed within a further 180 days, with a new rate then brought forward if considered appropriate.

’The Treasury does not believe that setting a new IoM PIDR independently before the revised UK proposals can be implemented would be appropriate.’

Mr Cannan said that any changes in the Isle of Man would be brought forward within 60 days of an announcement in the UK, subject to approval within 60 days of any announcement in the UK.

He was responding to a written Tynwald question from Clare Bettison (Douglas East).