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Simmons v Castle, Court of Appeal, 10 October 2012

1 November 2012
The issues

Reconsideration of first judgment – Jackson reforms – uplift in general damages

The facts

In Simmons v Castle (No. 1), the Court of Appeal took the opportunity to announce 10% increase in general damages in tort cases as from 1 April 2013, the purpose of which was to give effect to the reforms proposed by Sir Rupert Jackson on his final report on civil litigation costs. On the 16 August 2012, after the Association of British Insurers (ABI) issued two applications, together with supporting evidence and written argument. One was submitted in its own name and the other in the name of the defendant. Effectively they were one application which invited the court to reconsider whether the 10% increase should only apply to cases where the claimants’ funding arrangement had been agreed after the 1 April 2013. The court accepted that it was open to the ABI to make its application and that there was jurisdiction to hear it in the light of the very exceptional nature of the exercise carried out by the Court of Appeal, namely giving general guidance as to future practice in a case where the parties had not been represented and no prior notice had been given to potentially interested parties. The court would treat the application as made by ABI through the defendant. The exceptional nature of the case meant that this aspect of the case could not be taken as any sort of precedent signalling to disappointed litigants that they could apply to a court to reconsider a decision.

Thirdly, it had become apparent in the course of argument that the court should have invited representations from ABI, Association of Personal Injury Lawyers (APIL) and Professional Insurance Brokers Association (PIBA) before giving its earlier judgment.

It was clear that Sir Rupert Jackson and the Ministry of Justice had envisaged and intended the primary purpose of the 10% increase in damages was to compensate successful claimants for being deprived of the right to which they had enjoyed since 2000 to recover success fees from defendants in cases where claimants were funding the legal costs of pursuing the claim by a Confidtional Fee Agreement (CFA).

The decision

The ABI had argued that the 10% increase in damages was intended as a quid pro quo for successful CFA claimants in return for depriving them of the right to recover the success fee as part of their costs. The court accepted that contention.

The second step in the argument was that it would be wrong therefore to permit CFA claimants who were entitled to recover the success fee to benefit from the 10% increase. That contention was hard to challenge. Such claimants would have the penny and the bun.

The third step was that this misalignment could be met by reversing the conclusion reached in the earlier judgment and adding a qualification, namely that it would not apply to claimants who had entered into a CFA before the 1 April 2013. The court would accept ABI’s proposals in respect of CFA claimants subject to one point. Rather than exclude from the 10% increase those claimants who entered into CFAs before 1st April 2013, the court would exclude those claimants who fell within Section 44(6) of Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO). This would guarantee the identity between those successful claimants statutorily entitled to recover their success fees from defendants and those successful claimants disentitled, from enjoying the 10% increase in general damages.

A further amendment to the earlier judgment, following submissions made by the Personal Injury Bar Association would be to extend the 10% increase to claims brought in contract for non-pecuniary damages. In respect of both contract and tort, the 10% increase would apply to the four categories of non-pecuniary damages included in McGregor on Damages 18th Edition, namely: “pain and suffering and loss of amenity”; “physical inconvenience and discomfort”; “social discredit”; and “mental distress”.

Comments

An interesting consequence of the Court of Appeal’s attempt at obtaining precision in the definition of damages is that it would appear now that Smith v Manchester awards will not attract a 10% uplift. Whereas Simmons (No.1) if it was unclear in the first judgment, it would appear to be manifest in the second in their usage of the term ‘non-pecuniary’ rather than general damages. McGregor is clear that Smith v Manchester awards are pecuniary loss, to be defined nonetheless as general damage.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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