In July 2012, the Court of Appeal held that the amount of general damages in certain types of tort claims would be increased by 10%.
This was to be applicable in cases where judgment was given after 1 April 2013. It included general damages for:
- pain, suffering and loss of amenity in respect of personal injury
- all other torts which would cause suffering, inconvenience or distress to individuals
Following the judgment, there was concern that the decision would open the floodgates for certain claimants. The decision meant that those who entered into a conditional fee agreement (CFA) before 1 April 2013 - and were awarded damages after 1 April 2013 - would be entitled to both the 10% increase in damages and the continued recoverability of any success fee.
Application by Association of British Insurers
In August 2012, the Association of British Insurers (ABI) applied to the Court inviting it to reconsider the July judgment on the basis that the 10% increase in general damages should apply only to cases where the claimant's funding arrangements have been agreed after 1 April 2013.
The basis of the application was that:
- it was illogical and unfair on defendants if, after 1 April 2013, a claimant could benefit from not only an increased damages award, but also the recoverability of a success fee under a CFA entered into before 1 April 2013
- claimants who had not entered into a CFA and separately represented litigants, should be entitled to the 10% increase only if their letter of claim or claim form was served after 1 April 2013
The Personal Injuries Bar Association argued that there was no good reason to limit the 10% increase in damages to tort cases, and that it should be extended to claims based in contract.
Further, the heads of damage to which the increase applies should be widened to 'non-pecuniary loss for suffering, inconvenience or distress to individuals'.
Earlier this month, the Court handed down revised guidance (see Simmons v Castle  EWCA Civ 1288).
It confirmed that:
- general damages and personal injury and clinical negligence cases will increase by 10% for those cases decided after 1 April. However, where the claimant had the benefit of a CFA before 1 April 2013, they will not receive the increase in general damages
- the increase in damages will apply to both contract and tort cases
The revised judgment should give some comfort to insurers, as the Court of Appeal has clarified one of the Jackson Reforms that takes effect from 1 April 2013.
The case is interesting on a procedural level, because the Court of Appeal was satisfied that it had jurisdiction to reconsider its earlier judgment on an application by a non-party to the proceedings. The court was prepared to treat the application as being made by ABI through the defendant.
It is crucial to remember, however, that this decision does not create a precedent for disgruntled litigants to apply to the Court of Appeal to have their decisions reconsidered; the circumstances of this case were exceptional.
If you would like to discuss any of the issues arising out of this briefing, please get in touch.