Court of Appeal reopens its ruling on 10% damages uplift

Neuberger: gave ABI permission to intervene

The Court of Appeal has taken the highly unusual step of reopening its decision in the case it used to announce the 10% increase in general damages from next April, it has emerged.

It follows an application to intervene in Simmons v Castle by the Association of British Insurers (ABI), which has been critical of the ruling.

It was approved by Lord Neuberger, who is still Master of the Rolls ahead of being sworn in as president of the Supreme Court and who sat in Simmons, alongside the Lord Chief Justice, Lord Judge, and Lord Justice Maurice Kay, who is vice-president of the Court of Appeal.

The Simmons decision sought to implement the increase recommended by Lord Justice Jackson and which the government repeatedly said during passage of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 was a matter for the courts to deal with, rather than to implement it through legislation.

Nonetheless the decision came out of the blue in late July after the court hijacked a straightforward application to approve a settlement of an appeal in a personal injury (PI) action to make its pronouncement. There was no argument on the issue before the court.

The ABI’s primary concern is that conditional fee agreement cases which are begun before 1 April 2013 but conclude after that date will benefit from both the 10% uplift and the continued recoverability of any success fee and after-the-event insurance premium. Other issues, such as whether the uplift should apply to non-PI damages, are also likely to be addressed.

James Dalton, the ABI’s head of motor and liability insurance, said: “The 10% increase in general damages was always anticipated and it 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% increase a retrospective effect.

“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 resist this decision, which is why we are pleased that the court has agreed with the ABI’s submission to re-open the case.”

Andrew Parker, head of strategic litigation at DAC Beachcroft and one of Lord Justice Jackson’s assessors, is acting for the ABI.

The Court of Appeal ordered the ABI to notify both the Association of Personal Injury Lawyers (APIL) and Personal Injuries Bar Association (PIBA) about its application, and they have been given until 11 September to make submissions to the court. There will be a pre-trial hearing on 25 September.

An APIL spokeswoman said it was still considering the invitation, while Andrew Ritchie QC of 9 Gough Square, vice-chairman of PIBA, said the matter would be discussed at an upcoming executive committee meeting of the association.

Mr Ritchie said the court was right to reopen the case: “With any wide-ranging decision that has enormous financial implications, the Court of Appeal should listen to the interested parties.”

Well-known litigator David Greene, senior partner of London firm Edwin Coe, told Litigation Futures that it seemed the Court of Appeal had seen some sense in the ABI’s argument. Had the court given some warning and allowed submissions in the first place, it could have avoided this situation, he suggested: “It says something about the benefits of our adversarial system.”