PLAINTIFF personal injury lawyers have hailed last week's landmark House of Lords ruling on the compensation of accident victims as a vindication of a 30-year campaign for a change in the law.
Five Law Lords overruled the Court of Appeal and unanimously ruled that lump sum payments to accident victims for future losses should be calculated assuming that the money would be invested in risk-free index-linked government bonds – rather than on the stock exchange, where returns are higher.
Awards for £1m-plus claims are now likely to increase by up to 30 per cent, according to Paul Kitson, litigation partner at Russell Jones & Walker which acted for two of the three plaintiffs in the test case.
Describing the ruling as “a huge victory” for accident victims, Kitson said: “They will no longer have to gamble their damages.” He said the House of Lords decision vindicated the recommendations of Sir Michael Ogden QC's working party on damages awards.
Defence lawyers predicted the ruling “would cost the insurance industry millions of pounds”.