Earlier this year, UK Lord Chancellor Truss exercised her statutory power to change the multiplier for calculating damages for the victims of personal injuries from 2.5 percent to -0.75 percent. This caused a serious uproar in the UK, with insurance industry professionals claiming it was an unjustifiable change that will create a windfall for claimants. This multiplier is often referred to as the “discount rate” and it is used to calculate damages for future losses in personal injury claims.
A neutral rate would be a multiplier equal to the actual number of years of lost income whereas a negative percentage increases the number of years required to produce the same revenue stream. If the discount rate is not aligned with current economic data, damages for pecuniary loss will not reflect reality and claimants will either be over or under compensated.
The objective in both the UK and Hong Kong is to synchronize current economic data and pecuniary loss awards. With that in mind, the Tort Law feature examines the chequered history of the discount rate in the UK and Hong Kong and proposes a number of practical solutions that could be adopted in Hong Kong to ensure a better balance is struck on this front.
Elsewhere in the June issue, the Corporate article discusses strategies and tactics shareholder activists employ in the controlled and blockholder-influenced company universe in Hong Kong. It draws parallels between the strategies employed in the Hong Kong and German public company market structures, as the shareholder population concentration is more similar in these two markets than between Hong Kong and either the UK or US. The Technology piece analyses the current state of artificial intelligence technology and its presently available applications and limitations, dispelling exaggerated doomsday predictions of how it will impact the legal profession.
In the Practice Management section, the second installment of the two-part series exploring issues facing small and medium-sized firms in the context of the broader competitive market outlines four items that are critical for law firm leaders to continually monitor to ensure they are successful, given the changing competitive environment in Hong Kong and buying patterns of clients. Also included in the Practice Skills section is an article that provides a few tips on how to improve the processes of drafting client correspondence.