On 26 July 2012 the Court of Appeal handed down judgment in the case of Simmons v Castle [2012] EWCA Civ 1039. In it they decided to increase general damages by 10% with effect from 1 April 2013. This change was intended to dovetail with the coming into effect of changes made to the CFA costs regime.  

The consequence of the changes to the CFA costs regime and Simmons v Castle is that, as from 1 April 2013:

  • ATE premiums and success fees will no longer be recoverable from defendants;
  • Contingency fee schemes will be allowed, by which a successful personal injury claimant agrees to pay his lawyers out of his damages;
  • A 10% uplift in general damages would make up for the contingency fee and the Court of Appeal considered this move to be something that the judiciary, rather than Parliament, should put in place.

However, the insurance industry announced its unhappiness with the decision of the judiciary and launched a challenge. The Court of Appeal took the highly unusual step of reopening its decision in the case and the court gave its ruling on 10 October 2012  

Partial victory for ABI

The court accepted the ABI’s “primary case”, that those entering into CFAs before 1 April 2013 should be excluded. However the court rejected the ABI’s demand that conventional claimants and litigants in person should not be allowed to benefit from the 10 per cent uplift.

The Court of Appeal deleted paragraph 19 from its earlier ruling and replaced paragraph 20 with the following:

“Accordingly, we take this opportunity to declare that, with effect from 1 April 2013, the proper level of general damages in all civil claims for (i) pain and suffering, (ii) loss of amenity, (iii) physical inconvenience and discomfort, (iv) social discredit, (v) mental distress, or (vi) loss of society of relatives, will be 10 per cent higher than previously, unless the claimant falls within section 44(6) of LASPO.

“It therefore follows that, if the action now under appeal had been the subject of a judgment after 1 April 2013, then (unless the claimant had entered into a CFA before that date) the proper award of general damages would be 10 per cent higher than that agreed in this case, namely £22,000 rather than £20,000.”

The judges who made this modified ruling were the same as those who originally ruled in Simmons v Castle – the Lord Chief Justice, Lord Judge, the vice president of the Court of Appeal, Lord Justice Maurice Kay and Lord Neuberger, formerly Master of the Rolls and from the beginning of this month president of the Supreme Court. Lord Judge said the court should have invited representations from the ABI, APIL and the Personal Injury Bar Association (PIBA) before giving its earlier judgment.

Extension of 10% uplift

The Court also ruled that the 10% increase in general damages should not be limited to actions founded in Tort. In response to representations from PIBA, Lord Judge said: “In our view, it would be inconsistent and unfair to limit the 10 per cent increase to claims in tort, so that it did not apply, for instance, to claims in contract.”

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