U.K.: Increased Damages for Personal Injury
Steamship Mutual
Published: August 09, 2010
August 2000
(Sea Venture Volume 19)
Recently, the English Court of Appeal gave its much-anticipated judgement on whether damages for pain and suffering in personal injury cases should be increased. The decision in the case of Heil v. Rankin1 comes as a welcome relief to P&I clubs and their members.
Prior to this decision, it was anticipated that the court would increase general damages significantly following a detailed report by the Law Commission which had highlighted public dissatisfaction with the amounts awarded for typical personal injuries. The Law Commission had proposed that damages should be increased for almost all injuries by between 50 and 100 per cent. This would have led to greatly increased costs for all insurers. Estimates suggested that the cost of such an uplift to the UK insurance industry as a whole would have been as much as an additional £1 billion a year. Moreover, and perhaps more importantly, those claims currently awaiting settlement could have cost several billion pounds more to settle.
The Court of Appeal has rejected the Law Commission's proposals2 and held that increases should be modest. Essentially, the court decided:
- no increases for injuries previously worth less than £10,000, i.e. the vast majority of claims;
- maximum increase of one third for maximum severity cases previously worth £150,000 and above (i.e. now worth £200,000 and above). This would include cases where the injured party has suffered severe brain damage or quadriplegia;
- sliding scale of increases for cases between £10,000 and £150,000. This will mean modest increases for cases previously worth less than £25,000;
- it is not correct to assume that one can extrapolate from a 0 per cent increase at £10,000 to a 33.33 per cent increase at £150,000 that awards in between can be ascertained on a straight line basis. The court's judgment includes a graph which shows that the higher the damages were prior to this judgment, the higher the increase.
The following table and graph illustrates the typical increases in awards
Pre-judgment value
Post-judgment value
Percentage increase
10,000
10,000
0.00
20,000
20,800
4.00
30,000
32,000
6.66
40,000
44,000
10.00
50,000
56,250
12.50
60,000
68,625
14.38
70,000
81,594
16.56
80,000
95,000
18.75
90,000
108,855
20.95
100,000
123,216
23.26
110,000
138,000
25.00
120,000
151,800
27.00
130,000
166,000
28.00
140,000
182,770
30.55
150,000
200,000
33.33
It seems that the Court of Appeal were unwilling to accept the Law Commission's findings. The court did not appear to like the idea of the general public deciding what awards were appropriate. Rather, the court had to weigh up the costs to the insurance industry, hospital trusts (increases in general damages would have applied equally to medical negligence cases) and ultimately, society as a whole.
Had the Law Commission's recommendations been followed, the cost to clubs and their members would have been staggering. By contrast, the increases that have been approved by the court will affect clubs in just a handful of cases.
There is just one note of caution. The claimants in Heil v. Rankin are seeking leave to appeal to the House of Lords (England's highest court). We may therefore not have heard the end of the matter just yet.
With thanks to Andrew Baker of Eversheds, Bristol, for preparing this article.
1[2000] 2 W.L.R. 1173
2The Court of Appeal was asked by the Lord Chancellor to hear test cases in light of the Law Commission's report on general damages. The cases were specifically chosen in order to obtain a cross-section of cases from small claims to the catastrophic
