PERIODICS: Court of Appeal rules that payments for seriously injured people should not always be linked to retail prices index


Claimant personal injury solicitors scored a major victory in the assessment of damages last week, in a ruling that could cost the NHS £1.6 billion.



National firm Irwin Mitchell, Manchester firm Linder Myers, Barcan Woodward in Bristol and Lees & Partners in the north-west have successfully fought off an appeal in four linked cases that will have a significant impact on the value of periodical payments.



The Court of Appeal ruled that damages for seriously injured people dependent on care staff should not always be linked to the retail prices index (RPI). It upheld the firms' argument that indexing payments to RPI, which measures the cost of living, means clients can lose out because RPI has been lower than the annual rise in earnings in the care sector. Claimants can now opt for payments to be linked to the Annual Survey of Hours and Earnings (ASHE) instead.



Irwin Mitchell's head of personal injury, John Pickering, said the ruling was 'the most important decision for decades on the assessment of damages for future care'.



He said: 'It ensures those who require long-term care can afford to provide for themselves a good quality of life and as much independence as can be achieved within the limits of their injuries.'



Linder Myers' head of clinical negligence, Trevor Wood, added: 'It is still the function of the court to look at whether periodical payments or a lump sum benefits the claimant. I think where someone is catastrophically injured and requires a substantial amount of care for the future... insurers and liable authorities will find it difficult to get out of ASHE.'



Christopher Malla, a partner at City firm Kennedys, who acted for the NHSLA (NHS Litigation Authority) in two of the four appeal cases, warned that the decision could cost the NHS an additional £1.6 billion in payouts on cases to date. He suggested insurers should assess whether they could be liable for potentially higher awards.



'This judgment will have far-reaching effects on all catastrophic personal injury and clinical negligence claims,' he said. 'Once insurers have reviewed the potential additional cost to existing and future claims, a decision may be taken to pass on this liability to [policyholders].'



NHSLA chief executive Steve Walker said the authority may appeal to the House of Lords because public funds are at stake. He stressed any action would not cause any significant financial loss to claimants.



Anita Rice