Personal injury discount rate: inflation index and determining the judicial rate of interest

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Closes 28 Jan 2026

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The inflation index for the calculation of the personal injury discount rate

Currently, there is provision in the Damages (Investment Returns and Periodical Payments) (Scotland) Act 2019 for an adjustment to the rate of return to take account of inflation by reference to the Retail Prices Index (RPI) or to an alternative source of information as prescribed by Scottish Ministers in regulations subject to the affirmative procedure.  There is no provision to use a modified rate, whether that be an adjusted index or an average (or other percentage combination) of two or more indices.  As RPI no longer remains a suitable inflation index measure this section asks questions about the inflation index for the calculation of the personal injury discount rate.

 
1. Do you have a preference for the Consumer Price Index (CPI) or Consumer Price Index including owner occupiers' housing costs (CPIH) or another index as the appropriate inflation index to be referenced in the legislation?
2. Do you agree that the Damages Act 1996, schedule B1, should be amended to enable the possibility of a modified or adjusted inflation index to be used in the calculation of the discount rate?
3. Do you prefer Option A or Option B as a means of enabling the possibility of a modified or adjusted inflation index to be used in the calculation of the discount rate?
4. Do you have an alternative option for enabling the possibility of a modified or adjusted inflation index to be used in the calculation of the discount rate?
5. Do you agree that the mix of inflationary pressures affecting lump-sum awards of damages in Scotland is likely to be the same as that in England and Wales?