Introduction

 The Seventeenth Edition of the Judicial College Guidelines, published 5th April 2024, provides the long anticipated update on figures for general damages. Also included in this most recent edition is a Note on Inflation. The issue of inflation has attracted much interest from both Claimants and Defendants alike as to how, if at all, changes in inflation should be reflected when assessing general damages months (or even years) after the guidelines have been published. The Note provides a summary of how the impact of inflation should be implemented with the published figures.

What’s the difference between the figures?

The Sixteenth Edition was published in April 2022 meaning that there has been a two year gap between publications of the Guidelines. The updated Guidelines are calculated in accordance with the Retail Price Index (RPI), the inflationary index which is judicially approved and has been adopted by the courts when assessing personal injury claims. Whether RPI should be the appropriate inflationary measure is a separate issue and was explored in an article by Tim Grace of Atlantic Chambers, but for all intents and purposes RPI remains the favoured index.

The figures contained within the Sixteenth Edition were based on the RPI from September 2021. It will not have escaped anyone’s attention that there has been a significant increase in inflation over the recent years, so much so that that the most recent edition of the Guidelines works on the basis of increasing figures by approximately 22% (based on the RPI as of August 2023) from those contained within the previous edition.

However, things do not stop there…

How should you approach inflation?

Previously, practitioners have had limited guidance from the courts, with no specific method or figure endorsed by the courts for calculating any uplift to reflect inflation. The case of Blair v Jaber [2023] EW Misc 3 (CC), which considered the issue of whether the court should take into account inflation when looking at the Judicial College Guidelines, found that inflation should be considered. In that instance, a 12% uplift was applied to Judicial College Guidelines figures.

In the case of CCC v Sheffield Teaching Hospitals NHS Foundation Trust (2023) EWHC 1770 (at §142), when making an award, Ritchie J updated the Judicial College Guidelines for inflation from April 2022, however the learned Judge did not obviously apply any particular figure but did comment that general inflation was at 10% from April 2022.

Thankfully, the Judicial College’s Note on Inflation provides courts and practitioners with assistance on when it is appropriate to consider inflationary uplift, and how such an increase should be calculated. There are two important points raised in the Note.

Firstly, inflationary increases should continue to be applied to the values published within the Guidelines ‘to ensure that figures remain up to date’. This means that, until the Eighteenth Edition is published sometime in 2026, practitioners will need to continually monitor RPI and apply any increases to the figures between editions. Readers must also consider the impact of any significant increase on the potential award for general damages, to ensure that they are operating as accurately as possible in a legal sphere where views on quantum already vary greatly.

Secondly, any inflationary increase should be calculated in accordance with the date that the edition was finalised, specified within the Introduction to the Guidelines, and not the date of publication. Whilst this may seem obvious, the difference of a few months can have a significant impact on any applicable inflation to be considered, and may have a significant impact on offers and settlement. As mentioned, the Seventeenth Edition figures are based on the RPI as of August 2023.

With that said, the figures contained within the Seventeenth Edition are already out of date. At the time of writing there has been 1.7% increase between the RPI in August 2023 (the date on which the most recent edition is based) and the latest figures available for RPI (as at March 2024).

When considering the best way to account for inflationary increase, readers will no doubt have their own preferred methods for calculating this. One such method is to calculate an award based on the figures as published, and then using an online inflation calculator to provide the most up to date final figure when providing an advice on quantum, or considering offers/settlement.

What does this mean in practice?

Legal representatives, whether acting on behalf of a Claimant or Defendant, should ensure they remain up to date with the RPI, and consider how increasing inflation may impact any offers they may have made or received, including those made pursuant to Part 36. From the perspective of a Defendant, offers previously rejected or ignored, on the basis that the proposed settlement figure was too high, may now be considered to be reasonable and, if appropriate, capable of acceptance.

Conversely, parties should not attempt to predict the future and make (unrealistic) offers based on what the RPI may or may be in the future.

In particular, now that the courts have received some guidance as to how inflationary increase is to be implemented, it is incredibly likely that the court will keep inflation in mind when being asked to approve settlement at infant approval hearings. It may be wise for Defendants to review any offers and update them as necessary prior to settlement hearings, particularly if those offers are based on the previous edition of the Guidelines. Claimants should remind themselves that, whilst they may be entitled to an inflationary uplift on an old but agreed figure, the purpose of settlement is not only to save time and cost, but also to come to a sensible figure which may (correctly) fall within a wide yet reasonable bracket; insisting on a strict uplift in line with inflation may not always be the most appropriate step to take. In certain cases it may be practical, or indeed necessary, for Claimants to obtain an updated advice on quantum, for the purposes of settlement approval.

The whiplash tariff

One of the few things that has not changed between editions is the tariff for whiplash injuries contained within the Whiplash Injury Regulations 2021. The figures within the tariff have not been changed for the time being, as the result of being embedded in statute.

Even though the tariff figures remain the same, and the Guideline figures have increased, there should be no complication in dealing with ‘mixed injury’ cases, with the two amounts being considered separately before any adjustment is made. In Hassam v Rabot [2024] UKSC 11, the Supreme Court provided step by step instructions where the claimant is seeking damages for pain, suffering and loss of amenity (PSLA) in respect of both whiplash injuries covered by the 2018 Act and non-whiplash injuries (i.e. mixed injury cases). A summary of that approach can be found here.

It is worth noting that the tariff figures are due to be reviewed in 2024 and it is likely that they will be revised, although by how much the figures may increase is less predictable.

Conclusion

It is now clear that an adjustment for inflation should be considered when making an award using the Judicial College Guidelines. Whilst the guidance provided within the Note assists with the appropriate period of inflation to be considered, and the relevant inflationary index to be applied, judges, practitioners and parties alike must remind themselves that the Guidelines are precisely that, guidelines; not a prescriptive and specific set of instructions which must be followed.

Whilst updated Judicial College Guidelines are appreciated by those tasked with assessing general damages in personal injury cases, and in this particular edition the commentary on the applicability of inflation between editions, it should not be forgotten that the Guidelines are only a composite analysis of previous case law, and that specific case analysis, where relevant decisions are available, can assist in narrowing relevant brackets and identifying a reasonable award.

Should you require an up to date advice on quantum for any personal injury matter, please contact the Atlantic Chambers clerks on 0151 236 4421.

SAMUEL WATSON

ATLANTIC CHAMBERS

Monday 29th April 2024

Atlantic Chambers will be hosting a seminar touching upon such matters in the summer – please the booking details here.