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In the recent judgment of Simmons v Castle, the Court of Appeal
has confirmed that in all cases where a judgment is given on or
after 1 April 2013, the proper level of general damages to be
awarded for personal injury, nuisance, defamation and all other
tort claims that cause suffering, inconvenience or distress to
individuals will be increased by 10%.
Lord Justice Jackson's Review of Civil Litigation Costs:
Final Report in December 2009 included recommendations that general
damages for pain, suffering and loss of amenity should rise by 10%
to redress the potential claimant-defendant imbalance where CFA
success fees and ATE insurance premiums would no longer being
recoverable from defendants in civil litigation. This was
ostensibly designed by Lord Justice Jackson to leave claimants
"no worse off than they are under the current regime".
Provisions regarding recoverability of CFA success fees and ATE
premiums, along with other recommendations from the Final Report,
are brought into law by the Legal Aid, Sentencing and Punishment of
Offenders Act 2012, which comes into force on 1 April 2013
(see our previous
Law-Now on the Act). However, the recommendation for a 10%
increase in damages in tort claims is not set out in the Act (or
elsewhere).
In Simmons v Castle, the Lord Chief Justice provided clarity on
when and how the 10% increase would come into effect. While
approving the quantum of a personal injury settlement in the
instant case, he took the opportunity to state that, with effect
from 1 April 2013, the proper level of general damages to be
awarded in judgments for: (1) pain, suffering and loss of amenity
in respect of personal injury; (2) nuisance; (3) defamation and
breach of privacy; and (4) and all other torts which cause
suffering, distress or inconvenience to individuals will be 10%
higher than previously.
Now that the date that the increase on damages will come into
effect has been confirmed, defendants have an additional incentive
to settle meritorious claims in advance of 1 April 2013 to avoid
additional liability. Claimants (on the other hand) may attempt to
prolong or delay proceedings to leverage either a higher settlement
amount or a higher amount in damages awarded at trial.
Further, claimants who enter into CFAs and ATE insurance before
1 April 2013, and whose cases are not settled or decided before
this date, will also be able to claim 10% more in damages whilst
also being able to recover their success fees and ATE premiums.
During this interim period, defendants will risk the combined
effect of CFA success fees, ATE insurance premiums and an increase
in damages. The courts may, of course, take steps to avoid
this potential additional recovery.
The 10% increase on tort damages may also have an unforeseen
impact on Part 36 offers. It is uncertain whether the date on which
a Part 36 offer has been made, and therefore whether the sum
offered should attract an increase of 10% or not, will now have to
be taken into account by a court when determining whether an offer
was beaten.
This article was written for Law-Now, CMS Cameron
McKenna's free online information service. To register for
Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance
only. The information and opinions expressed in all Law-Now
articles are not necessarily comprehensive and do not purport to
give professional or legal advice. All Law-Now information relates
to circumstances prevailing at the date of its original publication
and may not have been updated to reflect subsequent
developments.
The original publication date for this article was
07/08/2012.
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