Friday, 12 September 2014

Scottish Independence and the Ogden Tables

Do the people of Scotland not realise the full implications of their referendum on independence?

If there is a "Yes" vote then it will have a significant impact on damages for personal injury claims in the rest of the United Kingdom with corresponding adverse impacts on insurance premiums and taxes.

The multipliers for the Ogden Tables 7th Edition give multipliers based on the projected mortality rates underlying the 2008-based population projections for the United Kingdom by the Government Actuary. As is commonly known, life expectancy in Scotland is lower than it is in each of England, Wales and Northern Ireland (life expectancy for women is about two years lower in Scotland than England).  Following Scottish independence it would surely make no more sense to include life expectancy in Scotland than to include life expectancy in France, for the purpose of calculating multipliers for claimants in what remains of the United Kingdom. Thus the removal of Scotland from the projections will increase the multipliers and therefore increase compensation for future losses and expenses.

What about other data used to calculate personal injury claims? 

The Annual Survey of Hours and Earnings used to calculate annual changes in periodical payments is based on data from the United Kingdom. If Scotland leaves, then there will be a new data base for future calculations.

New Earnings Survey: Again, as I understand it, this is based on UK data. It is often used to assess project earnings in a loss of earnings claim. The data set will change following a "Yes" vote. 

The Discount rate - the financial implications of independence and the effect of government bonds will doubtless provide an additional reason to kick the discount rate review further into the long grass.

Whenever the courts rely on data and statistics from the Office of National Statistics or other bodies which are taken from the UK as a whole, there will be an impact if Scotland leaves the UK.

For the Scots, whose legal system has always had a high degree of independence, there may be corresponding changes to their PI calculations.

Finally, do the Scots realise that a "yes" vote will throw two members of the Supreme Court onto the dole queue?

Much to ponder.

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