The 14th edition of the Judicial College Guidelines shows that a further increased inflationary effect on damages is likely while the Civil Liability Bill is still awaited
The 14th edition of these guidelines, previously known as Judicial Studies Board Guidelines has now been published. What do they show us about future likely damages trends?
Continued use of the RPI rather than another potentially more suitable index of inflation measurement such as the CPIH leads to a standard increase of 4.8% in this 14th edition. There are fewer exceptions from the standard rate of increase causing unexpected surprises than we saw in the 13th edition.
The guidelines make no reference to the proposed new tariff expected to be introduced for minor whiplash claims through the Civil Liability Bill, but notes that legislation enacted during the life of this edition could cause the figures set out in the guidelines to change for the affected types of claim.
The purpose of the guidelines
We are used now to these guidelines appearing every other September, the 13th edition having been published in September 2015. The essential purpose is to "reflect and categorise" the level of appropriate PSLA for the defined types of injury taking into account any court decisions of relevance over the intervening period which might have suggested the former guidelines were wide of the mark.
"Guidelines not tramlines" is what the guidelines as published are said to be as always. Assisting the parties and the judge in court rather than dictating figures remains the philosophy.
The effect of inflation
The main function of each edition of the guidelines is to uprate the figures used in the previous edition for inflation. So the key issue is to consider is the broad level of increase which is being allowed for.
The answer is that in general terms a 4.8% increase is being allowed for. This percentage is to allow for the effects of inflation over 2 years.
In the 13th edition the general terms increase was 3.4%. In other words, the standard level of increase in the 14th edition is 40% more than it was in the 13th edition.
RPI or CPI or CPIH?
The group producing the guidelines have once again decided to use the Retail Prices Index as their guide to inflation, rather than the more commonly used Consumer Prices Index. It is use of the RPI which produces 4.8% as the increase.
While the RPI over 2 years indeed produces 4.8%, if the CPI were used it would result in an adjustment for inflation of 3.1%, 35% less than RPI.
In early 2017 a newer index the CPIH became the headline measure of inflation used by the Office for National Statistics and was available for use by the guidelines. Over 2 years, inflation on that index was 3.4%, 30% less than RPI, though higher than the CPI.
The inflation indices
In the 13th edition, it was said that a thorough review of the guidelines would be carried out including as to whether the RPI should still be used before the 14th edition was published. There is no reference to that exercise having been carried out in fact.
The 14th edition includes the comment that while in the 13th edition the idea was floated that another index might be more appropriate, it goes on to say that even if that time may come, the group has decided that it has not yet done so. No reason is given for the change of view in place of what was said in the 13th edition.
The RPI as the original measure of inflation has been declassified by the ONS as a national statistic. It is still though maintained by the ONS.
While, according to the ONS, the CPI is "the internationally comparable measure of inflation which employs methodologies and structures that follow international legislation and guidelines", it omitted housing costs. The CPIH adds housing costs into the CPI.
The increased significance placed by Government on the CPIH since the group met 2 years ago to produce the 13th edition might have suggested that the CPIH was the most suitable measure to adopt for the 14th edition. No reason is given for maintaining the link with RPI, though of course it links into marginally higher damages than use of either the CPI or the CPIH.
We continue to await publication of the Civil Liability Bill as the vehicle to be used to introduce the proposed reform of the level of damages in minor soft tissue injury claims. There is no mention in the guidelines of the proposed tariff figures for such a reform such as those seen in the last parliamentary session as part of the reform intended to be introduced through the Prisons and Courts Bill.
The 14th edition says that at one time (and presumably before the General Election was called) the group had considered delaying this edition to accommodate the new tariff. In the end due to events and lost time they predictably decided to proceed.
The 14th edition says that readers should be alert to the possibility that there might be changes in terms of the new tariff finding its way into the guidelines for cases falling within its remit.
It may be recalled that much higher increases than the standard 3.4% were provided for in the 13th edition for certain minor injuries, though the explanation of the reason for those increases remained unclear. What we saw then was that most minor injuries lasting up to 3 months saw an increase of 5%, while apparently for reasons of needing to be aligned with those injuries, the lowest brackets for neck as well as back injuries saw values rise no less than 20%.
There are no such significant changes in this edition. In fact, whether or not as a response to what happened last time, in this edition minor injuries lasting up to 3 months actually see figures increase less than the standard 4.8%, in most cases by 3.4%, ironically the standard increase in the 13th edition which was not then used for this type of low level injury.
And there is also a comment in the introduction which may be of assistance. The panel had had reported to them by certain district judges that claimants would argue that when it came to interpretation of the guidelines, that the continuance of any minor symptoms was sufficient to attract an award for the longer period into which low level symptoms continued.
Mr Justice Langstaff says in his introduction that intelligent application of the guidelines is needed, rather than "too casual a focus on the length of time for which it is said that the injury was suffered – perhaps in the light of a report saying that minor symptoms are ongoing". This ought to emphasise the need to concentrate on the period of significant symptoms in an assessment of PSLA.
2 bands of figures
The guidelines now concentrate on the post-LASPO figures incorporating the 10% uplift, but also show the same figures without that increase for the remaining cases where success fees are not recoverable. It is said the use of the old figures may not continue into the next edition.
In terms of mesothelioma claims and as an exception, Langstaff J notes in his introduction that few if any claims will attract the extra 10%, because CFAs with recoverable success fees are still being entered into and so depriving those claimants of the extra £6,000-£11,000 in damages that they would have anticipated otherwise.
Other tweaks this time
These are few. Scarring is now dealt with commonly for both men and women rather than continuing to have separate bands which was thought outdated; while higher percentage increases than the standard are suggested for one type of serious neck injury, for moderate hand injury and for a severe foot injury.
We should expect the 14th edition to lead to further inflation of damages in the period of the next 2 years before the 15th edition is expected to arrive. This will feed through into all types of injury claim but will be most marked in those cases where PSLA remains the largest element of the claim such as in the case of claims entering the RTA, EL or PL portals.
It will be up to parliament when it considers the Civil Liability Bill whether its proposed tariff is seen as an appropriate brake on current damages levels which are the result of judicial decision making.
This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.