The Scottish Government has launched a consultation on potential changes to the way inflation is accounted for when calculating the Personal Injury Discount Rate (PIDR) in Scotland, as well as seeking views on whether the judicial rate of interest remains appropriate. The consultation closes on 23 January 2026.
The current Scottish PIDR is +0.5%, set in September 2024. Scotland’s methodology is contained in Schedule B1 to the Damages Act 1996 and is broadly aligned with Northern Ireland’s Schedule C1 approach.
In its 2024 review, the Scottish Government concluded that it did not have flexibility within the legislation to prescribe an adjusted inflation index. Regulations may only prescribe a single, unadjusted index, meaning that while an injured person’s inflationary pressures may lie between price-based and earnings-based measures, the Government can only select an existing index as is.
Depending on which unadjusted index is selected, this can lead to systematic under- or over-compensation.
The new consultation seeks views on whether legislative flexibility should be expanded to allow the use of adjusted indices, similar to the position in England & Wales.
The Scottish Government is seeking feedback on whether future discount rate reviews should take inflation into account using:
This reflects concerns that unadjusted indices may not appropriately track the underlying inflation experienced by seriously injured claimants over the lifetime of an award.
Granting the Scottish Ministers power to prescribe adjusted indices would offer significantly greater flexibility to ensure “full compensation, no more and no less”.
The consultation also seeks views on the judicial rate of interest, currently set at 8% for post-decree awards, a level widely viewed as misaligned with the economic environment and prevailing interest rates.
Stakeholders - including compensators - have routinely highlighted that:
The Scottish Government is now inviting evidence-based submissions on whether the rate should be revised.
Keoghs will be responding to this consultation alongside the similar consultation in Northern Ireland. We will issue a draft response in early January.
For more information please contact:
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