Immediate application of the 10 per cent damages uplift to be reviewed

Association of British Insurers secures application to have Simmons v Castle reopened

The Court of Appeal is to review the immediate application of the 10 per cent uplift in damages in personal injury cases it decided in July following an application by the Association of British Insurers.

The increase was due to come into effect with the rest of the Legal Aid, Sentencing and Punishment of Offenders (LASPO) Act in April 2013 to compensate for the scrapping of costs recovery in ‘no-win, no fee’ cases.

LASPO, however, does not include specific provisions in relation to Jackson LJ's recommendations to introduce a 10 per cent increase in damages.

Ruling in Simmons v Castle [2012] EWCA Civ 1039 on 26 July, Lord Judge (pictured) noted that the bulk of the Jackson policy recommendations had been adopted in full in LASPO, “on the clear understanding that the judges would implement the ten per cent increase”.

“It would therefore be little short of a breach of faith for the judiciary not to give effect to the ten per cent increase in damages recommended by Sir Rupert,” the Lord Chief Justice said.

A spokesperson for the ABI told Solicitors Journal the effect of the Simmons ruling would be to apply the 10 per cent increase retrospectively to ‘no-win, no-fee’ cases started before 1 April 2013.

This, she said, would likely lead to a rise in the cost of personal injury litigation which was not anticipated in the reforms.

James Dalton, head of motor and liability insurance at the ABI said the increase in general damages formed part of a carefully balanced package of measures introduced by the Legal Aid, Sentencing and Punishment of Offenders Act.

“The effect of the Simmons decision is to give the 10 per cent increase a retrospective effect,” he said before adding: “This represents a significant departure from government policy and, left unchallenged, is likely to lead to increases in car insurance premiums and employers’ liability premiums.

“The insurance industry is determined to reduce unnecessary costs and to resisting this decision, which is why we are pleased that the Court has agreed with the ABI’s submission to re-open the case.”