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Government plans to introduce a 10% uplift on general damages have again been called into question, amid concern that they are reliant on the co-operation of insurers.
The increase, recommended by Lord Justice Jackson in his review of civil litigation costs, was intended in part to compensate for abolishing recoverability of success fees. But it was not included in the Legal Aid, Sentencing and Punishment of Offenders Bill, with the government instead relying on judges to implement the uplift.
However, with around 90% of civil litigation cases never reaching court, the government admits it has no mechanism to force the 10% uplift to be included in out-of-court offers.
An MoJ spokeswoman said: ‘The judiciary are currently looking at how to implement the 10% uplift in damages as part of conditional fee agreements. We would expect insurers to comply with the rates set by the courts when making out-of-court settlements.’
Donna Scully, chairman of the Motor Accident Solicitors Society, said: ‘The reality is claimants won’t see this 10%. Are you telling me insurers are going to voluntarily hand it over? They must be sitting back and laughing.
‘This increase won’t make any difference and it’s patronising to suggest otherwise.’
Robert Khan, head of law reform at the Law Society, warned that without legislation, insurance companies will be tempted to ignore the 10% uplift in settlement offers.
He said: ‘It seems to be unworkable and unenforceable. The vast majority of cases will never come before a judge, so it’s left to the insurers to uphold.
‘It is interesting that every pro-defendant measure is in the bill but all the things that are supposed to offer balance for claimants are less certain.’
Medico Legal News Source: Law Society Gazette
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