General damages increase ruling published

The Court of Appeal in England this week amended a ruling that would have led to an increase in general damages in most civil cases from 1st April 2013.

The general background to the case is the balanced package of measures recommended in the final report of the Review of Civil Litigation Costs produced by Lord Justice Jackson in January 2010, and due to be implemented in large part in April 2013.

Many of the Review’s recommendations have been enacted by Parliament in the Legal Aid Sentencing and Punishment of Offenders Act 2012.

However, an integral part of the new overall costs regime is that general damages in most actions should rise by 10%, and that was not included in the 2012 Act, because, as Lord Diplock observed in a judgment in a personal injury appeal in 1983, the Court of Appeal is ‘generally speaking the tribunal best qualified to set guidelines for judges trying such actions’.

In July the Court of Appeal ruled that the 10% increase should apply to all cases where judgment is given after 1st April 2013.

The Association of British Insurers appealed the ruling on the grounds that it would upset the carefully balanced package of Government reforms by introducing the 10% increase in general damages ahead of other measures.

The Court has now confirmed that the increase is to be more aligned with the Government’s reforms and will not be introduced on cases where the claimant has entered a conditional fee arrangement before 1st April 2013. For any cases started after this date, the 10% increase will be balanced by reductions in legal costs.

The rulings will only apply in England and Wales.