Damages uplift ‘will cost defendants £300m’
Insurers told the High Court today that defendants stand to lose more than £300m if claimants are given the ‘windfall’ of a risk-free rise in damages.
The Association of British Insurers (ABI) was arguing its case for an amendment to rules that will enforce a 10% uplift on general damages for all personal injury cases from 1 April 2013. The Court of Appeal used the case of Simmons v Castle in July to impose the uplift, but lord chief justice Lord Judge, the master of the rolls Lord Neuberger and the vice president of the CoA Sir Anthony May later agreed to hear arguments for an amendment.
The ABI said it accepted the uplift – a key element of Lord Justice Jackson’s review of civil litigation costs – in principle, but argued it should not apply to claimants already benefiting from conditional fee agreements.
Timothy Dutton QC, representing the ABI, said up to one million cases could be left in the pipeline by the end of March, costing organisations such as the NHS millions of pounds.
‘One would be in the position if these stand unchanged that there will be a very significant impact on these cases, where claimants will recover costs, success fees and after-the-event insurance as well as receive an extra 10% in damages.’
Describing the potential for a ‘misalignment’ in costs for defendants, Dutton also suggested the existing ruling could lead to ‘behavioural issues’ among some claimant solicitors.
When asked by Neuberger if this meant PI solicitors would advise clients to delay settlement until after 1 April, he agreed. Lord Judge had told a packed courtroom at the start of proceedings that the original judgment was ‘open to reconsideration’.
The Association of Personal Injury Lawyers told the panel of judges that damages were already too low, and that the uplift was intended to address this problem, rather than offset the changes to CFAs.
A decision is expected within days.
Comments
Utterly unbelievable! This is
Utterly unbelievable!
This is effectively a matter for primary legislation being decided by unelected judges.
Quite true - even the
Quite true - even the language used such as "amendment" points to that conclusion. I have never, ever heard of a judgment or ruling being clarified by an "amendment".
Indeed, this is not (as I understand it) even an appeal against the previous decision; it is a fresh claim made by the ABI intervening in a decision which is technically closed (as it was a consent to a settlement, so if the settlement has been reached the court is surely functus officio). Again, when I went to school, decision of the Court of Appeal were challenged in the House of Lords (or Supreme Court).
Simmons v Castle
If the Judges who provided the original decision in Simmons v Castle understood what the changes are going to be in April 2013, they would have made a more accurate job of preparing their Judgment in the first instance.
This is just another example showing that senior Judges do not understand anything about inter partes costs. Let the Costs Judges and Costs Lawyers deal with the costs issues, so that mistakes like this do not wreck a system of legal costs which already works well enough.
And, while they're at the Bench, why don't those senior Judges make the sensible decision to abandon the erroneous Jackson reforms as well!
I know everything Jackson related should be vilified but
I know everything Jackson related should be vilified but the comments made so far seem somewhat misguided.
Most of our law is made by "unelected judges". Always has been. That is generally considered one of its strengths.
The issue being decided is the level at which damages for pain suffering and loss of amenity should be assessed. The existing levels were determined by judges. I don't see anything improper with the re-assessment being carried out by judges.
A Court is only functus officio when its order has been sealed. Until then, it is free to reconsider its decision if it thinks proper. It has happened at least 3 times in my career - - not an every day occurrence but hardly unknown.
The issue which the ABI (who I am aware should also be vilified on all occasions) wishes to raise is a reasonable one. I have no firm opinion on whether it is correct or not, but it is not silly by any means.
This issue, dealing as it does with the level of damages, is not something that can be addressed by Costs Judges.
Most of our law is most
Most of our law is most certainly not made by judges-it is made by legislation with the judges merely applying that law. Regrettably "the common law" has long since been effectively dead.
Damages uplift ‘will cost defendants £300m’
As a committed Claimant lawyer and a member of APIL I hesitate to agree with anything that the ABI says, but I struggle to disagree with them on this occasion. The reality is that two seperate issues are being conflated here - the need for general damages to be updated, and the need to compensate victims for the unrecoverable cost of paying their lawyer's success fee. Insofar as the 10% increase was intended to deal with the latter, logically it should not be implemented until the loss that it compensates actually occurs. The Court of Appeal have made a mistake - and to pretend that the increase was (or should have been) intended to deal with the former is bordering upon the disingenuous. However, that is NOT to say that the shameful failure to increase general damages should not be addressed as well.