Heather Baucher reports on the Court of Appeal's decision to review non-pecuniary damages in personal injury cases. Heather Baucher is a partner at Hill Dickinson.

In a unanimous judgment the Court of Appeal has reviewed general damages for pain, suffering and loss of amenity.

Included in the Law Commission report number 257 was a recommendation that the level of damages for non-pecuniary loss in personal injury cases should be increased. The commission had recommended that there be an increase of a factor of at least 1.5 but no more than 2 for damages over £3,000 and a sliding scale from £2,001 to £3,000.

Having determined that the Court of Appeal was the appropriate forum to consider the Law Commission report and that the principal was that compensation must remain fair, reasonable and just, the court ruled that a modest increase was required to bring some awards up to standard. It determined that there was no need for an increase in awards below £10,000 and that the awards at the highest level will require an uplift adjustment of one third.

For those awards between £10,000 and the highest level there would be an adjustment working downwards from the highest level as per the guidance given in the individual cases considered by the court.

The court stated that it would be desirable for the judicial studies board to prepare a new edition of its guidelines. Appropriate guideline cases updated by the RPI should be used to find the appropriate level of award. The decision will take effect from judgment and will have an immediate effect in cases already before the court.

Evidence was presented before the court on the impact of the Law Commission's recommendations if they had been adopted. It was submitted that the cost of a 100 per cent uplift on awards on the insurance industry would run to approximately £100m a year. The effect of the retrospective nature of the increase would be in excess of £2bn. The decision will minimise the impact of the changes not least because of the threshold upon which any increase will now take effect. The decision was undoubtedly influenced by the defendant's submission that the defendant's insurers would have been adversely affected by an increase at the lower end of damages.

The court left open the door in respect of psychiatric injuries, saying that where we can see the possibility that the court might in the future be persuaded in an appropriate case or cases that the existing guideline (psychiatric injury) requires expanding, we are not of the view that our present consideration of this appeal enables us to consider that question.