Personal Injury Discount Rate - Guernsey - A different path

Following an initial consultation process in 2022, the Policy & Resources Committee (the Committee) set up an Expert Panel to advise on PIDR for Guernsey. The Expert Panel's report was published alongside a further consultation paper in August 2025. On 21 July the Committee announced that with effect from 14 August 2026 the following PIDRs will apply:

• -0.75% for damages which are subject to care cost inflation, i.e. the cost of carers or nurses providing care for the injured person.
• -0.5% for damages that are subject to earnings-related inflation, i.e. the loss of earnings and also damages awarded for the costs for any professionals, including registered health care professionals, excluding the above category.
• 1% for damages that are subject to price inflation, i.e. all damages not included in either of the above categories.

In doing so, the Committee has adopted the Expert Panel's recommendations.

The approach adopted in Guernsey differs from the approach adopted in the 3 UK jurisdictions (England & Wales, Scotland and Northern Ireland) in several respects including the following:

1. The heads of loss approach follows the approach adopted in the Guernsey case of Helmot v Simon and also in the Republic of Ireland (albeit with three categories of damages instead of two) rather than a single rate approach which, through slightly different mechanisms, has resulted in a rate of +0.5% throughout the UK.
2. The rate of return on the damages is based on the real yield on UK ILGs (as at March 2025) rather than by reference to the return achieved by investing in a low risk mixed portfolio of investments.
3. The adjustment for damages inflation is based on the difference between the Guernsey rate for each category of damages and UK price inflation.
4. The adjustment for tax is based on the Guernsey tax regime.

The approach also differs from the one adopted in Jersey which introduced legislation in 2019 that provided for two separate rates which depend on the period of loss set at +0.5% for losses expected to last up to 20 years and +1.8% for losses expected to last longer than 20 years. The rate in Jersey cannot be set lower than 0%.

There will need to be a settling in period as the heads of loss approach will introduce another layer of complexity into the quantification of damages for future loss and also a level of uncertainty as to which category some of the heads of loss fall into with some parties no doubt seeking to include them in more financially advantageous categories. In the meantime, compensators will want to revisit their reserves and any open offers that have been made or received.

The Damages Law requires the PIDR to be reviewed every five years (i.e. within the same period as in the UK jurisdictions), but the Expert Panel has strongly recommended that it is reviewed every three years (i.e. distinctly sooner) or earlier if there is a shift of more than 1.5% in the real yields on UK ILGs. The Expert Panel's recommendations are already a year old.

It appears that Guernsey now holds the title for the lowest PIDR in the world, for care costs at least. A title previously held by Northern Ireland – but reversed by them on the most recent review.