Appeal judges extend 10 per cent damages uplift to contract cases

The Court of Appeal has modified its ruling in Simmons v Castle on how the 10 per cent increase in general damages recommended by Lord Justice Jackson will be applied.

The court has decided to extend the uplift to contract cases as well as tort, wherever there is ‘pain and suffering, loss of amenity, physical inconvenience and discomfort, social discredit, mental distress or loss of society of relatives’.

In response to an application from the ABI, the court also modified its judgment so that claimants who entered into conditional fee agreements before 1 April 2013 will not benefit from the uplift.

The judges who made the updated judgment were the same as those who originally ruled in Simmons v Castle [2012] EWCA Civ 1288 in July – 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 since the start of this month president of the Supreme Court.

Giving judgment this morning on behalf of the 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.

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.”

The LCJ said there was “much overlap” between tort and contract cases, “both in the sense of parallel claims under each head, each based on essentially the same facts (e.g. many professional negligence claims), and in the sense of similar claims (e.g. disappointing holiday claims in contract).”

He went on: “Further, claims in tort and contract are and will be equally susceptible to being funded on a CFA basis (or, after 1 April 2013, under a damages based agreement). Indeed, while it is hard to think of many examples, we can see no good reason why the 10 per cent increase should be limited so as to exclude any type of claim.”

The court accepted the ABI’s “primary case”, that those entering into CFAs before 1 April 2013 should be excluded, but, to reduce the risk of satellite litigation, defined them as “claimants who fall within the ambit of Section 44(6) of LASPO”.

However Lord Judge 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.”