Should Jackson's 10% uplift to general damages give Claimants the penny and the bun?
Published 1 April 2016
The Legal Aid, Sentencing and Punishment of Offenders Act 2012, as part of the reforms proposed by Lord Justice Jackson, prevents the recovery of success fees and after the event insurance premiums from Defendants in claims where no conditional fee agreement (CFA) was entered by the Claimant before 31 March 2013. In order to mitigate the need for Claimants to pay a success fee to their solicitors, which would be expected to come out of the damages awarded, the reforms of 2013 added a 10% uplift to general damages for pain, suffering and loss of amenity (in cases where no pre-31 March 2013 CFA had been entered).
But what is the position where the Claimant has not entered a CFA before 31 March 2013 and does not face a liability to pay a success fee out of the damages recovered, for example where the Claimant has the benefit of legal-aid funding? The question was considered by the Court of Appeal in Summers v Bundy, a clinical negligence claim in which the Claimant had the benefit of such funding.
Summers attended an accident and emergency department where he was seen by the Defendant, a GP who was not employed by the hospital but was offering support. The Defendant did not investigate whether the Claimant had a deep vein thrombosis. The Claimant did have one which progressed and he developed a pulmonary embolism. He then brought a claim against the Defendant for damages.
At trial, Judge Gargan considered whether the 10% uplift should be applied, deciding that "because the claimant in this case is in receipt of legal aid he does not have any uplift to pay to his solicitor from his general damages and it seems to me therefore that it would be wrong to penalise the defendant who is not getting the benefit of saving the uplift".
The question of pre-31 March 2013 CFAs, where the Claimant may recover the success fee from the Defendant, was considered by the Court of Appeal in 2012 in Simmons v Castle in two judgments. The first judgment concluded that the 10% uplift should apply to all cases where judgment was given after 1 April 2013 and the second one excluded cases where a pre-31 March 2013 CFA had been entered.
In Summers the Court of Appeal concluded that, following Simmons, the judge did not have discretion on whether or not to apply the 10% uplift – because there was no pre-31 March 2013 CFA this claim was not excluded and the 10% uplift applied.
Moving forward, the number of claims to which the exclusion applies will decrease and, whilst the decision should provide clarity to all parties and enable stronger Part 36 offers to be made, a number of Claimants will benefit from a windfall.
The fact that the 10% uplift is not discretionary in cases where legal aid funding is in place casts the conduct of some firms of solicitors in a poor light, where they persuaded their legally-aided clients to enter pre-31 March 2013 CFAs, enabling the solicitors to recover success fees on costs, but depriving their clients of the uplift on general damages.