View from the bench | The effect of the Simmons decisions

Soon, those plaintiff words of Oliver Twist will be ringing in the ears of district judges throughout Wales and England as claimants seek ten per cent additional damages following recent guidance from the Court of Appeal.

In the judgment and supplemental judgment delivered by the Lord Chief Justice in Simmons v Castle [2012] EWCA Civ 1039 on 26 July 2012 and [2012] EWCA Civ 1288 on 10 October 2012, Lord Judge declared 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, or (v) mental distress, will be ten per cent higher than previously, unless the claimant falls within section 44(6) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012' (the 2012 Act).

However, this apparent largesse by the court is not as generous as it first appears. In fact, the judiciary is simply keeping faith with the executive to facilitate the implementation of the reforms recommended by Sir Rupert Jackson in his Review of Civil Litigation Costs: Final report 2009. The government having essentially accepted Sir Rupert's recommendations, the declaration heralding the increase in the level of damages provides the final piece in the jigsaw necessary to introduce the costs reforms.

Success fee scrapped

The legislative counterpart to the declaration on damages is to be found in sections 44 to 48 of the 2012 Act. Section 44 amends sections 58 and 58A of the Courts and Legal Services Act 1990 governing the regulation of conditional fee agreements (CFAs) and the recovery of success fees.

The amendments will result in the losing party in litigation no longer being responsible to pay a success fee under a CFA. Section 44(6) is a saving transitional provision protecting those who have entered into a CFA containing a success fee clause before 1 April 2013, allowing the court to make a costs order including a success fee payable by the losing party. In those cases the declaration of increased damages will now not apply.

Care must be taken when reading the Simmons case, as the guidelines in the original judgment of 26 July was significantly revised by the supplemental judgment of 10 October following representations, on 25 September, by interested parties from the insurance industry and on behalf of personal injury practitioners.

The supplemental judgment provides that the court's declaration, that damages are to be increased, is not to apply in cases where there exists a CFA entered into before 1 April 2013. However, in another significant change from the initial judgment the declaration is now to apply to all civil claims and not those concerned only with general damages in tortious claims.

Disappointed litigants

The court expressed the view that, while it had jurisdiction to hear further representations after delivering its initial judgment, because of the very exceptional nature and reasons for the judgment, the supplemental judgment was delivered in the interests of justice. It emphasised, however, that 'this aspect of our decision cannot be taken as any sort of precedent signalling to disappointed litigants or ?others unhappy with a decision of this court that they may apply to a court to reconsider a decision'.

On analysis, though the damages declaration will cause awards of damages to increase by ten per cent from next April, the increase is likely to be illusory for many as it will be often more than off-set by their obligation to be responsible for payment of the success fee to their lawyers. Under the Jackson reforms success fees are to be capped at 25 per cent and in those cases in which the winning party is bound to pay a success fee, the increase in his damages will only provide him with the ability to meet part of that fee from his enhanced damages. It therefore represents a quid pro quo for losing the ability to recover success fees and after the event (ATE) insurance premiums. It incidentally provides an opportunity to increase the level of damages awarded in this jurisdiction making for them to be more in line with awards in other jurisdictions.

As to the types of damages covered ?by the ten per cent increase the court indicated that the best guide in that connection was by reference to chapter three in McGregor on Damages (18th Edition) which is concerned with 'Non-Pecuniary Damages'. It will be noted that the categorisation ?of the categories of damages employed by their Lordships are dealt with, in detail, in that text.

Of course, practitioners and judges alike will still, in personal injury cases, reach first for the guidance provided by the Guidelines for the Assessment of General Damages (11th Edition) recently published by the Judicial College, with a post-Simmons update at www.judiciary.gov.uk/judicialcollege/pisupplement in April 2013.

After 1 April next, in the absence of any further guidance, damages should be assessed, as was done in Simmons, as they would be today and then the ten per cent supplement added. That is the theory, at least. It remains to be seen how many Olivers will have the audacity to ask for still more and where it all will end.