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Increase in damages by 10%
In Simmons v Castle  EWCA Civ 1039, the Court of Appeal has added to the general splashing about which precedes the enactment of the Legal Aid, Sentencing and Punishment of Offenders Act 2012. In an effort to provide ‘proper, prospective warning’, it has jumped in ahead of the implementation of the Jackson reforms by advising that the 10% increase in general damages for pain, suffering and loss of amenity will be added to all judgments given after 1 April 2013.
The judgment of the lord chief justice is rather odd. He and the other two senior judges have piggy-backed their demonstration of real support for their colleague, Jackson LJ, on the back of agreed terms of settlement between the parties in the action. The judgment provides a rather simplistic snapshot of the history of the valuation of general damages. What it fails to do is to express any true understanding of the rationale behind the proposed 10% increase.
Jackson LJ sees the increase as a counter to the loss of recoverability of success fees and after-the-event insurance in personal injury cases and the inevitable prospect that, unlike at present, claimant solicitors will charge their clients an element of their damages to make up for the resultant non-recoverability of these elements. The history set out makes repeated reference to the level of general damages reflecting the value of money and keeping ‘the tariffs up to date’. At no point is there mention of the algebra of the relationship between the 10% increase and the contribution to costs.
There is, however, much said about Heil v Rankin  EWCA Civ 84, the last occasion on which the Court of Appeal attempted to ‘update’ general damages. For those old enough, it will be recalled that the lengthy examination of data on the value of money resulted in a graph which, on the face of it, could have been drawn by a five-year-old and which purported to describe an increase in damages starting with 0% for all cases valued below £10,000 and topping out at 33.3% for tetraplegics. Even when Heil was concluded, its impact did not reflect the effect of inflationary increases, or venture very far towards the recommendations of Law Commission Report 257, Damages for Personal Injury: Non-Pecuniary Loss, of April 1999.
By example, in Kemp & Kemp it is reported that a paraplegic received £25,000 in 1967. In the 12th edition of the Judicial Studies Board Guidelines the bracket of awards for such injury ranges from £144,000-£186,500. Applying retail price index, the value of that £25,000 as at August 2012 is now £366,750. It can, therefore, be seen in depressingly stark terms that a 10% increase on £186,000 leaves a potential claimant significantly short of recompense for serious and life-changing injuries. Notably, the gap between the true value of damages and what the courts award has widened in the past 12 years.
In conclusion, the Court of Appeal has raised no whirlwinds in this judgment, which lacks revolutionary energy. The 10% figure is arbitrary. It is not there to reflect the result of inflation on the value of money. It is a balance to the loss of the success fee. However, perhaps the most frustrating aspect of this judgment is that the court thinks it has provided ‘simplicity and clarity’.
The reality is that less than 1% of personal injury cases reach judgment and the rest of those that are successful settle out of court. The 10% increase in damages will therefore be ‘lost’ in negotiations, and most claimants will see no increase in damages but will be asked to meet some of their legal costs. Furthermore, the practical consequences in respect of the procedural aspects such as the timing of part 36 offers have been ignored. One could be forgiven for thinking that there are elements of Larkin’s ‘thin, continuous dreaming’ at play. There is certainly a hint of a bleak Orwellian deception in the announcement of a simple solution when, paradoxically, the judgment will be seen to create anything but.
Simon Allen, Russell Jones & Walker, Sheffield
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