Clarity on mixed injuries from the Supreme Court

This article originally appeared in Insurance Day, April 2024.

Almost three years since the implementation of the whiplash reforms, the recent UK Supreme Court decision in Hassam and another (Appellants) v Rabot and another (Respondents) marks a pivotal moment.

The court determined the approach to be taken to valuing damages for pain, suffering and loss of amenity (PSLA) where the claimant suffers a whiplash injury captured under the Civil Liability Act 2018 and the associated whiplash tariff, and any additional injury/injuries outside the scope of the Act.

With almost 50% of Official Injury Claim (OIC) portal cases having an element of non-tariff damages, the impact of the decision will be extensive for insurers. This is particularly so when coupled with the recently published 17th edition of the Judicial College Guidelines – with a significant increase made in the key area commonly seen in motor claims in the rumoured 22% bracket – further increasing inflationary pressure on general damages.

Having heard the appeals on February 20, 2024, the judgment was handed down five weeks later. The Supreme Court unanimously endorsed the decision of the Court of Appeal, dismissing the defendants’ appeals and the claimants’ cross-appeals. The claimants had cross-appealed there should be no deduction in general damages made where there is a whiplash and non-whiplash injury sustained.

The Supreme Court endorsed the approach adopted at first instance by District Judge Hennessy in Birken­head County Court and thereafter by Lady Justice Davies in the Court of Appeal who gave the leading judgment.

Separate valuations

The approach is to value separately the general damages for the whiplash injury by reference to the tariff and the non-whiplash injury following the established principles of common law, add them together, then “step back” (the “Sadler adjustment”) and exercise judicial discretion to apply a deduction for an overlap of PSLA.

The caveat, introduced by Davies LJ, that “the final award cannot be less than would be awarded for the non-tariff injuries if they had been the only injuries suffered by the claimant”, was also endorsed.

The Supreme Court dismissed the dissenting judgment from the Master of the Rolls, Sir Geoffrey Vos, in the Court of Appeal. Vos proposed the PSLA award is primarily covered by the tariff award and only anything over and above that award is considered using the common law. Vos averred parliament had legislated for not only the tariff but had also accepted and legislated for a decrease in general damages more generally in the non-tariff space where there is a whiplash injury.

Clarity and certainty

The prompt delivery of the judgment from the Supreme Court provides welcome clarity on the approach to non-tariff injuries. The unanimous decision provides absolute certainty on the approach to be adopted in future. The caveat, included by Davies LJ in the Court of Appeal, remains and will be welcomed by claimants. The approach also gives district judges sufficient leeway to deal with claims on a case-by-case level.

Three years into this regime it appears many of these injuries will now be valued at a level that necessitates an increase in the number of claims exiting the OIC process and entering the fast track. This will in turn increase cost and indemnity spend further for insurers.

There is no obvious plan to increase the small claims threshold for injury claims.

In terms of other areas of appeal, the definition of whiplash appears a likely area of focus. Guidance from the higher courts on oral evidence in OIC claims would also be welcomed. There is certainly merit for both claimants and defendants in having the claimant attend court.