Norwich Union has welcomed the setting up of a reviewable periodic payment structure linked to the retail price index (RPI) and the certainty this brings.
NU head of claims legal Dominic Clayden said: "The issue has always been about how damages are paid, not what is paid. The issue, now, is to provide certainty going forward, which is in the interest of all parties."
The breakthrough led by Lord Hunt of Wirral in the House of Lords on Monday succeeded in setting the fairest way to fix reviewable periodic payment structures.
In the final Lords reading a late government amendment to the Courts Bill has enabled all sides to clarify how periodical payments in personal injury cases will be protected against inflation.
The Lord Chancellor Department Minister Baroness Scotland said the RPI would be the normal method of indexation.
But, although courts do have the right to modify the RPI, the right will be exercised only rarely.
This brings the provisions of periodical payments in line with lump sum awards under the existing system.
Currently, the discount rate set by the Lord Chancellor in 2001 at 2.5% applies in all but exceptional cases.
Beachcroft Wansbroughs senior partner Lord Hunt said: "This government amendment has brought to a halt attempts to use the Courts Bill as a way to argue for increased lump sum awards.
"As I said in the debate on Monday, the minister has now firmly closed the door on those attempts and this will no doubt be a great relief to those facing such arguments including the NHS as well as the insurance industry."
In previous debates, the Lords agreed that the Courts Bill, when it became law, would not be retrospective.
However, Baroness Scotland is still opposing applying reviewable periodic payments to existing cases not yet settled.
The Bill will be debated in the House of Commons this week.
