A new law which came into being in April 2005 requires that insurance companies should pay regular payments of compensation to seriously injured victims over the whole of their lifetime. 

Up until now, most claims are settled on the basis of a large lump sum payment which the claimant then has the responsibility of managing in order to ensure that they have enough money to cope with their disabilities throughout their life.  The added burden of making complicated investment decisions is often too much for many claimants who simply do not have the financial expertise to cope with the problem.

This results in many claimants with severe disabilities running out of money during their lifetime.  This puts them back into state provision.  Not only is this added cost to the tax payer but it reduces choice and quality of life for the injured victim. 

The new law seeks to get around this dilemma by reducing the amount of the lump sum and ensuring that regular payments are made throughout the claimant’s lifetime which will be index linked.