Guernsey sets statutory Personal Injury Discount Rates

On 21 July 2026, the States of Guernsey announced the adoption of Guernsey’s first statutory Personal Injury Discount Rates (PIDRs). The new rates, which came into force on 14 August 2026, largely reflect the recommendations of the independent expert panel whose proposals were the subject of consultation in 2025.

The announcement follows the reform process discussed in our previous article, Reforming Guernsey’s Personal Injury Discount Rate, published in October 2025, which examined the expert panel’s recommendations and the Policy & Resources Committee’s consultation on the future of the PIDR.

What has been decided?

The Policy & Resources Committee and Alderney’s Policy & Finance Committee have approved a three-rate system, adopting the approach recommended by the expert panel. The following rates now apply:

• -0.75% for damages linked to care cost inflation, including the future costs of carers and nursing care;
• -0.5% for damages linked to earnings-related inflation, including future loss of earnings and the costs of professional services; and
• +1.0% for damages linked to general price inflation, covering losses not falling within the other categories.

The approved rates are substantially consistent with those proposed during the consultation. The principal change is the earnings-related rate, which has moved from the consultation proposal of +0.5% to -0.5%.

A reform years in the making

As discussed in our earlier article, the introduction of a statutory discount rate in Guernsey can be traced to the Privy Council’s decision in Helmot v Simon. In that case, the Privy Council recognised that compensation assessments in Guernsey should be based on assumptions reflecting the Island’s own economic circumstances rather than relying on approaches adopted elsewhere.

Historically, Guernsey courts determined discount rates through litigation and expert evidence on a case-by-case basis. The States subsequently enacted the Damages (Assumed Rate of Return and Related Matters) (Enabling Provisions) (Guernsey and Alderney) Law, 2020, establishing a framework for setting statutory discount rates with input from expert advisers and through public consultation.

The adoption of the new rates follows a process involving legislation, consultation, expert analysis and stakeholder engagement.

Why the three-rate approach was adopted

A central issue during the 2025 consultation was whether Guernsey should adopt a single-rate, dual-rate or three-rate model. The expert panel concluded that different categories of future loss are affected by different inflationary pressures and recommended that they be treated separately.

For example, care costs may be influenced by wage inflation within the care sector, while future earnings losses are linked to broader labour market trends. Other forms of expenditure may be more closely associated with general consumer price inflation. The expert panel considered that these differences supported the use of separate rates for different categories of loss.

The adopted framework therefore applies distinct rates to different heads of future loss, reflecting the approach recommended by the panel.

Balancing different interests

In announcing the decision, Kevin Sockalingum, Chair of the Expert Panel, noted that the process of setting a PIDR involves balancing a range of considerations. These include the future needs of injured individuals as well as the wider effects on insurers, policyholders and the community.

The consultation process considered the implications of setting rates at different levels. Higher rates may affect the value of compensation awards, while lower rates may affect the cost of claims and insurance. The expert panel ultimately recommended a three-rate model, which has now been adopted by the States.

What does this mean in practice?

For parties involved in personal injury litigation, the introduction of statutory rates provides a defined framework for calculating future losses. Practitioners will have statutory rates available when valuing claims, rather than relying solely on case-specific evidence and argument regarding the appropriate discount rate.

The new framework is likely to be particularly relevant in claims involving substantial future losses, including long-term care costs, loss of earnings and ongoing professional support. The different rates will apply according to the category of loss being assessed.

Looking ahead

The States’ decision completes the implementation of Guernsey’s statutory framework for personal injury discount rates and confirms that the expert panel’s recommendations have largely been accepted.

The adoption of a three-rate model reflects the view that different categories of future loss should be subject to different discount rates. With the new rates now in force, their operation and impact will soon become clearer through their application in personal injury claims and litigation.