The Court of Appeal has today confirmed that, as part of the fundamental changes to costs in civil cases recommended by Sir Rupert Jackson, general damages for pain, suffering and loss of amenity in personal injury, nuisance, defamation and all other torts which cause suffering, inconvenience or distress to individuals (so including harassment cases) will increase by 10% from April 2013.
One of the key changes recommended by Sir Rupert Jackson which the government and the judiciary have agreed to implement is that from April 2013, the success fee payable under a conditional fee agreement (CFA) will no longer be recoverable from an opponent as is the case now.
At present, where a lawyer charges extra under a CFA to compensate for the risk of losing and not getting paid at all, when the case is won, the opponent has to pay that extra amount.
From April next year, that extra will have to be paid by the client and the increase in general damages was seen as being a (very blunt) tool to compensate for that liability.
If so, stated intention to increase damages by 10% in all (tort) cases where judgment is given after 1 April 2013 does not actually make sense. Applying a blanket increase from April 2013 in all cases means it will apply not only to new cases where the success fee is not recoverable but also to existing cases where Claimants can recover their success fees.
I’d have thought it would not have been too difficult to say that the increase would apply only to those cases started after April 2013 which would most probably have limited the application of the increase to those case which were intended to be affected.
That said, as the Court of Appeal recognise, there is no perfect solution to the issue and while “this conclusion does not achieve perfect justice in every case, the same thing can be said about any other answer to the question, particularly in the light of a number of the forthcoming changes being made to the costs regime”.
Meanwhile, presumably, most Claimants will want to defer settlement or trial until after April in order to get the increase. And for us lawyers, the question is whether it is now negligent to settle any case or permit it go to trial before April 2013?