10% Increase in Damages to Apply From 1st April 2013
16th August, 2012
As of the 1st April 2013 general damages are set to increase by 10% following the ruling in ‘Simmons v Castle EWCA Civ 1039’ in the court of appeal where it was stated “This appeal provides an appropriate opportunity for this court to announce an increase in general damages in most tort actions with effect from 1 April 2013.”
This increase in damages of 10% was first mooted in the Jackson Report to enable the Claimant to pay any success fee as these were no longer going to be recoverable from the Defendant where a CFA was entered into after the 1st April 2013.
The judgment was handed down by Lord Chief Justice, Lord Judge, Master of the Rolls Lord Neuberger and Lord Justice Maurice Kay, who is vice-president of the Court of Appeal. The judgment was made in order to provide simplicity and clarity however there are some obvious problems with the decision.
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Any Claimant settling damages after this date who has a CFA dated prior to this should benefit by receiving an additional 10% in damages but not having to pay any success fee from the same meaning the Claimant is receiving more than the value of the claim. This is clearly unfair to the Defendant.
Depending on the circumstances there are going to be costs implications as well. These centre around Part 36 offers and the effect the additional 10% in damages has in the Claimant beating a Defendant’s offer. The variations of what could occur are numerous and we expect to see plenty of problems occurring with cases going on at this time and plenty of cases going to court regarding the recoverability of costs especially where global offers are accepted regarding special and general damages.
As the 1st April approaches it will be interesting to see the movements by the defending solicitor and how many cases they try and push to settle before this date knowing how much it will cost the insurer overall as soon as the 1st of April has passed.