In last month’s Health Legal Update, reference was made to the case of Simmons v Castle, where the Court of Appeal took the opportunity to confirm an increase in general damages of 10 per cent, effective from April 2013.
Following an application to intervene made by the Association of British Insurers (the ABI), the Court of Appeal has revised the guidance and its judgment confirms that although general damages in personal injury and clinical negligence cases will increase by 10 per cent for those cases decided after 1 April, in those cases where the claimant had the benefit of a conditional fee arrangement before 1 April 2013, they will not receive the increase in general damages.
The Review of Civil Litigation Costs (The Jackson Report) recommended that claimants should pay conditional fee arrangement (CFA) success fees themselves out of damages. This change will take effect for CFAs signed after 1 April 2013. The Jackson Report also recommended that general damages awards should be increased by 10 per cent to compensate claimants in part for having to pay the CFA success fees themselves. In Simmons v Castle the Court of Appeal initially held that the increase in general damages would apply to all cases where judgment is given after 1 April 2013, irrespective of whether there is a CFA in place and irrespective of when it was signed. The ABI was concerned that this meant that for the first year or so claimants would recover both the success fee and the increased general damages from the defendant (in effect double recovery) and that this would, in turn, mean that insurance premiums would need to be increased to cover the awards. The latest judgment has allayed those concerns.