General Insurance Article - ABI pressure influences decision on Simmons vs Castle

 The decision by the Court of Appeal this week to revise its original decision in the case of Simmons v Castle is good news for consumers, businesses and the taxpayer says the ABI.

 The ABI applied to re-open the judgment on the grounds that it would upset the carefully balanced package of government reforms to the civil litigation system by introducing the 10% increase in general damages ahead of other measures. Under the original decision, the 10% increase would have applied to all cases decided after 1st April 2013. Instead this will now be more aligned with the Government’s reforms and will not be introduced on cases where the claimant has entered a conditional fee arrangement before 1st April 2013. For any cases started after this date, the 10% increase will be balanced by reductions in legal costs.

 James Dalton, the ABI’s assistant director of Motor and Liability, said “The insurance industry took this action in our continuing fight to reduce unnecessary costs being passed onto honest motorists. Today’s decision by the Court of Appeal means that insurers will not be forced to pass on about £300m in increased costs to the premium paying public, which represents around £13 per motor insurance policy. We have won a battle against unnecessary costs but not the war. So the fight to bring about a speedier, more cost-efficient civil litigation system for the benefit of claimants and customers continues.

 “We are pleased that the Court recognised that the original judgment upset the package of measures which feature in the Legal Aid, Sentencing and Punishment of Offenders Act 2012 and which were originally intended by Lord Justice Jackson to maintain a careful balance between the interests of claimants and defendants. We are also pleased that the Court now acknowledges that it should have sought submissions from ABI and other interested parties before announcing the increase."

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