Court of Appeal grants permission to appeal CICA Discount Rate

News | Tue 10th May, 2016

On 10th May 2016 Lord Justice Sales gave permission at an oral hearing in the case of LSX v CICA for a CICA Claimant to appeal against the Discount Rate used by the CICA in assessing future care costs in a pre-tariff case under the 1990 Scheme.

The CICA tribunal applied the 2.5% Discount Rate prescribed by the Lord Chancellor under the Damages Act 1996, even though the Damages Act does not apply to the CICA. The award was to a brain damaged young man who needs the award to provide life- long 24 hour care. The agreed evidence of the former government actuary before the tribunal was that in order to provide for full compensation the CICA needed to apply Discount Rates of 0% for RPI related losses and minus 1.5% for earnings related losses. This meant that the award that the CICA made was £5.6 million instead of the £16 million that was needed to provide full compensation under the scheme. The effect of the award is that it will run out by the time the 27 year old claimant is 48, only halfway through his expected life, and he and those caring for him will not be able to afford any care for the rest of his life.

In April 2015 Mr Justice Jay upheld the decision of the CICA on judicial review.

The argument going to the Court of Appeal is that in applying the Damages Act Discount Rate the CICA was not assessing the award on the basis of the common law as required by the 1990 CICA Scheme, and that the award needs to provide full compensation, not half full compensation.

Grahame Aldous QC and Laura Begley of 9 Gough Chambers are acting for the Claimant.

Grahame Aldous QC was instructed by Stuart Brazington of Withy King Solicitors.

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