10% uplift revisited
The Court of Appeal has amended its decision in Simmons v Castle by deciding that the 10% increase in general damages due to come into effect on 1 April 2013 should not apply to those claimants whose cases are funded by conditional fee agreements where the CFA was entered into before 1 April 2013.
The Court accepted the ABI’s main argument that it would be unfair for such claimants to be able to recover success fee and ATE premiums after that date but to also benefit from the increase in general damages that was designed to compensate claimants for not being able to recover success fees and ATE premiums. As the court put it “it is hard to challenge that contention: such claimants would have the penny and the bun” (I’m going to have to start using that expression).
On the other hand, the Court decided that those claimants whose claims are funded on a conventional should benefit from the increase regardless of when the claim began (which still seems to be very much the case of somebody getting a free bun).
The Court noted:
“If the amendment is rejected, there could be cases where a Part 36 offer was sufficient at the time it was made but was insufficient after the 1 April; no such difficulties would arise if ABI’s proposal was accepted. Similarly, if ABI’s proposal is rejected, there could be cases where defendants try to accelerate the trial and claimants try and delay it. We do not think that these problems are considerable, but they tend to favour ABI’s case.”
If this is true of CFA funded claimants would it not equally apply to “conventionally” funded claimants? Hasn’t the decision to allow “conventionally” funded claimants the uplift, regardless of when the claim began, left open considerable scope for satellite litigation over whether Part 36 offers have been successful or unsuccessful? Given this potentially includes a very large number of claims funded by BTE insurance this is likely to come back to haunt the Court of Appeal.
Bizarrely, APIL’s submissions to the Court included the argument that the ABI’s proposals would “lead to satellite litigation”. It has not been reported as to whether the advocate making that submission managed to keep a straight face at the time.
Although this has been a broadly successful outcome for defendants, the downside is that the Court took the opportunity to extend the 10% increase to claims other than those in tort, such as claims in contract. This will therefore cover holiday claims.
Therefore, a decision was made to delete paragraph 19 from the earlier judgment and replace paragraph 20 with the following:
“Accordingly, we take this opportunity to declare 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, (v) mental distress, or (vi) loss of society of relatives, will be 10% higher than previously, unless the claimant falls within section 44(6) of LASPO. It therefore follows that, if the action now under appeal had been the subject of a judgment after 1 April 2013, then (unless the claimant had entered into a CFA before that date) the proper award of general damages would be 10% higher than that agreed in this case, namely £22,000 rather than £20,000.”