10% Damages uplift a headline with no substance?

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As the dust settles around the Governments proposed attempts to restrict access to justice, scorn has been pouring on one of their headline ‘good news’ elements of the plans – the plan to introduce a 10% uplift on general damages.

Experts are now calling this proposed 10% uplift into question, as the implementation of the uplift relies fully on the voluntary co-operation of insurers. From our perspective, it is highly unlikely that Insurers are going to freely increase settlement values by 10% if there is no legal obligation for them to do so. Ever tried getting a settlement from an Insurer? Makes getting blood from a stone seem like a walk in the park doesn’t it?!

The 10% uplift was recommended by Lord Justice Jackson in his recent and much publicised review of civil litigation costs. The reason for the proposed uplift came about as Lord Justice Jackson wanted to ensure that successful claimants would not lose out too much as a result of the planned banning re recoverability of success fees. Experts worry that as the uplift plan was not included in the Legal Aid, Sentencing and Punishment of Offenders Bill, it is unlikely that all claimants will get the uplift as the Government is relying purely on judges to impose the uplift when hearing cases in court.

As we all know, the vast majority of No Win No Fee Personal Injury claims never reach court (some statistics estimate it is around 90% of civil litigation cases never reaching court). This is worrying and further worry, if needed came about when the government admitted that there was no way to force the imposition of a 10% uplift to be included in out-of-court offers or settlements.

Some quotes on this matter:

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.’

So there we have it… it seems that the Government have been well and truly found out as being in the pocket of the Insurance sector on this one. An ill thought out law could see a real reduction in access to justice and decreased settlements to innocent claimants. We will fight this as far as we can, let’s just hope we win. If not, what’s the alternative? Refuse any out of court settlement to ensure that a claim is heard by a Judge who can then impose the 10% uplift? That will simply cost the insurance sector and legal system more money – the exact opposite of the stated Government aim! Still, this is the British Political system we are talking about, so why should we be surprised?!

If you need to discuss a potential claim or wish to talk about the No Win No Fee Personal Injury claims process, please call us for free on 08009177456

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