Inflation, the Judicial College Guidelines and assessing general damages.
In a time of rampant inflation, we consider the approach of the court in the case of Blair v Jaber when assessing general damages in PI cases
The Judicial College Guidelines
The Judicial College publishes a set of guidelines at regular intervals which set out to assist judges, practitioners, and insurers in the valuation of general damages for personal injuries. The most recent guidelines are the sixteenth edition published in April 2022.
The guidelines separate injury types and give a monetary bracket as to how each should be valued depending upon the severity of the injuries sustained and prognosis. In terms of the brackets themselves, the Judicial College states that these are a distillation of awards of damages being made by the courts. However, the guidelines seek to bring a consistency to awards and are generally followed in personal injury litigation.
It should also be noted that the guidelines are reviewed before every new edition and adjusted to take into account the Retail Price Index.
The question of valuation of an injury, the current rate of inflation and the effect on the guidelines was considered by the court recently in Blair v Jaber.
Blair v Jaber
Mr Blair brought a claim for personal injuries sustained because of a road traffic accident in October 2020. The claim came before Recorder Jack in the Coventry Combined Court on 8 March 2023.
When it came to the question of valuation of Mr Blair’s injuries, the guidelines were utilised by the court, as is standard practice. However, the judge noted that the current guidelines had been published on 11 April 2022, nearly a year before, and “(s)ince then, we have had inflation such as has not been seen since the 1970s.”
The judge noted that the guidelines do not consider future inflation and gave consideration as to whether the figures within the guidelines needed to be increased to take the significant affects of inflation into account.
Counsel for the defendant argued that this was a matter for the Judicial College, but the judge disagreed. The judge pointed out that the guidelines are just that, guidelines, and that the guideline figures needed to be increased by about 12%.
The resulting increase in damages to reflect the effects of inflation has caused some controversy, particularly for those that view the guidelines as the definitive guide to valuations. Historically this has tended to be the case, particularly in recent years, where inflation has been relatively slow.
However, to take this view is to be lulled into a false sense of security. The Judicial College has made clear, in the introduction to the most recent edition, that these are indeed guidelines, not tramlines, and awards made are the prerogative of the court. The introduction sets out “For the avoidance of doubt, of course, the guideline figures should be increased by the appropriate index for inflation between editions.”
We consider the judge in Blair correctly directed himself in respect of adjusting for inflation.
There will be continuing debate as to what the percentage increase in the guidelines should be in respect of a particular case and whether the use of the Retail Price Index is the appropriate tool. Claimants are more likely to seek to increase the applicable brackets for an award of general damages with reference to inflation. Both reserves and offers of settlement should be carefully monitored as a result.