Interest Remains at 2%

Lawrence v Chief Constable of Staffordshire (TLR 25 July CA)

Historically the guidelines for interest on general damages for pain, suffering and loss of amenity were different from those used for calculations of future loss. Accordingly although in Wells v Wells ([1999] 1 AC 345) the court had set the guideline rate at rate of interest at 3% in respect of future loss there was no reason depart from and increase the existing guideline rate of interest of 2% on general damages for pain, suffering and loss of amenity in personal injury and certainly no intrinsic reason why the guideline rate of return use for calculations for future loss should be the same as the guideline rate of interest on general damages. The court was also quite unpersuaded that it should set a guideline indicating that the rate of interest on general damages in personal injury cases should be whatever rate the Lord Chancellor might from time to time prescribe under s1 of the Damages Act 1996. The Lord Chancellor had not yet made any such order so that there was no basis for judging whether any rate he might prescribe for one purpose would be suitable for another.