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General Damages Uplift: Beware

11 July 2023. Published by Genevieve Isherwood, Senior Associate

A recent decision in Coventry Combined County Court will have far -reaching impact on the valuation of all personal injury claims.

The decision of Recorder Jack gives the green light for Claimants to seek higher general damages awards. In clinical negligence claims, where general damages can already be as high as £400,000, this will have significant implications for Defendants and their insurers.

The facts of Blair v Jaber (where two passengers sought compensation from a taxi driver following a sudden brake), are not relevant to the clinical negligence sphere. However, the outcome of the decision undoubtedly is. The Claimants successfully argued that the general damages awarded should be increased due to "the unexpected and massive increase in inflation"; resulting in a hefty 12% uplift.

Recorder Jack accepted the Claimants' argument that he was entitled to consider whether a change in circumstances between the publication of the Judicial College Guidelines for the Assessment of General Damages in Personal Injury Cases ("the Guidelines") and the date of the compensation award meant the valuation should be departed from. He also accepted that "the very substantial drop in the value of money which has taken place since [the publication of the Guidelines]" was such a circumstance. In this case the increase was not significant (£8,000 increased to £8,960 for the First Claimant and £3,000 to £3,200 for the Second Claimant). In clinical negligence claims however, such an uplift could result in an increase of tens of thousands of pounds in other cases.

Defendants should now expect other claimants to follow suit and push for higher settlement figures. The practical impact of this should therefore be considered and steps taken.

Firstly, Insurers or their advisors should review any significant general damages reserves they are holding, and consider whether adjustments are necessary.

Secondly, existing settlement offers from Claimants which do not reflect the uplift but which remain open for acceptance should be revisited. Subject to the value of the offer and the likely uplift, a previously unattractive offer might now appear more reasonable.

Finally, all defendants and their insurers should be alive to the current fluctuations in the interest rate; a sudden decrease may give grounds for a successful defence to the uplift.

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