ABI sues over personal injury judgment that changes damages policy

The Association of British Insurers (ABI) is preparing to go into battle with the claimant lobby after the Court of Appeal (CoA) said damages should be raised by 10 per cent from April next year.

Tim Dutton QC
Tim Dutton QC

The move will be perceived as an indirect challenge to the judiciary, which, critics say, hijacked a standard personal injury claim to announce a major policy shift.

The Lord Chief Justice Lord Judge, the Master of the Rolls Lord Neuberger and the vice president of the CoA Sir Anthony May together made the announcement in a ruling handed down in July in Simmons v Castle (26 July 2012).

An increase in damages was expected as it was included in Lord Justice Jackson’s package of proposals aimed at cutting the costs of litigation. The move was aimed at redressing the balance for claimants once the recoverability rule for conditional fee agreements is scrapped from April 2013.

However, the ABI is concerned there could be months or years where defendants are facing a double whammy of costs thanks to the damages increase and the fact that successful claims launched pre-April on a CFA will be entitled to the 100 per cent uplift.

The ABI has instructed DAC Beachcroft partner Andrew Parker, a key advisor to the Jackson LJ review, to challenge the ruling. In a highly unusual move the CoA has agreed to reopen the case, requesting that the ABI contact the Association of Personal Injury Lawyers (Apil) and the Personal Injury Bar Association (Piba) to add them to the list of parties as defendants.

Papers were lodged at the High Court last week with Fountain Court’s Tim Dutton QC, a regular advisor to the SRA on disciplinary issues, instructed.

An ABI spokesman said: “It’s upsetting that the careful balance which has been carefully put into place will be distorted by this.”

The case will pitch the defendant insurance market squarely against the claimant legal sector, bringing to a head a decade of wrangling between the opposing sides.

Jackson LJ’s proposals were seen to be a victory for the insurance market, which has long lobbied to have litigation funding fundamentally reformed to reduce the burden on defendants.

Claimant lawyers, however, contend that the Ministry of Justice went too far in endorsing all the proposals while also dramatically reducing the legal aid budget, a move that it says will block access to justice.

It is not yet clear which judges will be appointed to hear the case. A pre-trial hearing has been set down for 25 September to discuss how the matter should proceed.