Court of Appeal judgment on valuing "mixed" Official Injury Claims (OIC)

The Court of Appeal has handed down judgment in [1] Rabot v Hassam [2] Briggs v Laditan [2023] EWCA Civ 19.

These test cases were intended to provide eagerly anticipated guidance on how so-called mixed injury claims should be compensated following the introduction of the whiplash reforms, which entered force on 31 May 2021 and apply to accidents on or after that date.

Despite these reforms being introduced over 18 months ago, it has remained unclear how personal injury claims should be valued where a claimant sustains a whiplash injury – now subject to fixed sums of compensation under the Whiplash Injury Regulations 2021 – and another injury or injuries assessed under the prior common law. In the case of the latter, compensation is generally subject to an adjustment to reflect the combined or overlapping effect of all injuries that may otherwise result in over-compensation, per Sadler v Filipiak [2011] EWCA Civ 1728. The question for the court was whether – and, if so, how – awards for compensation should be adjusted where one of the injuries is subject to a fixed statutory award.

The Court of Appeal’s judgment

In summary, the Court of Appeal – in a split decision – held at [38]:

• “… The approach of the court to an assessment of damages in respect of a tariff and non-tariff award where concurrently caused PSLA is present is that the court should:

(i) assess the tariff award by reference to the Regulations;

(ii) assess the award for non-tariff injuries on common law principles; [and carry out the first Sadler adjustment where multiple non-tariff injuries are sustained]; and

(iii) “step back” in order to carry out the [second] Sadler adjustment, recognising that the sum included in the tariff award for the whiplash component is unknown but is smaller than it would be if damages for the whiplash component had been assessed applying common law principles.

• There is one caveat, namely 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.”

In his dissenting judgment, the Master of the Rolls formed an opposing view at [57]:

• “… It was suggested in the course of oral argument that the case was really about whether, the damages allowed for pain and suffering and loss of amenity (PSLA) concurrently caused by both whiplash and other injuries are to be… only that part of the tariff amount allowed for PSLA…
• The effect of this conclusion [if it had comprised the majority view] is that Parliament has legislated for the reduction of general damages for non-whiplash personal injuries in cases where whiplash injuries have been sustained, even though the statute does not appear specifically to be directed at non-whiplash cases.”

What does this mean for you?

Despite the court being seemingly conscious of Parliament’s intention to “reduce insurance costs for ordinary motorists by tackling the continuing high number and cost of whiplash claims” [1], the consequence of the majority decision seems likely to result in yet further displacement.

Personal Injury claimants are incentivised to continue bringing claims for de minimis or trivial injuries – which, prior to the reforms, they would not have been inclined to advance – given that general damages awards for minor injuries concurrently caused by both whiplash and other injuries will not be solely compensated for by the tariff award. Simply put, non-tariff injuries become more valuable. Consequently, there is greater scope for a higher proportion of these claims to breach the £5,000 upper limit for personal injury under the (new) RTA Small Claims Protocol.

Whilst, to date, we have seen typical Saddler discounts ranging from of 25% – 80% – based on OIC judgments in the public domain – the caveat from the Court of Appeal that “the final [combined] award cannot be less than would be awarded for the non-tariff injuries if they had been the only injuries suffered by the claimant” suggests that the combined tariff and non-tariff awards cannot be reduced by applying a second Sadler adjustment that exceeds the tariff award. However, this caveat does not appear to be directed towards consolidation of multiple non-tariff injuries via the first Sadler adjustment, to which common law principles continue to apply.^[2]

Despite Parliament legislating for fixed sums of compensation for whiplash injuries (and minor psychological injuries) lasting up to two years, one imagines that a whiplash injury with a prognosis period of 18 months coupled with a similar prognosis for one or more minor non-tariff injuries is now likely to bring such a claim out of scope.

If more claims are likely to eventually fall out of scope, compensators may wish to consider whether to anticipate a greater proportion of liability disputes or non-contentious claims without complete medical evidence, possibly suggesting claims incubation. Naturally, compensators may wish to consider whether individual cases warrant a variation of existing offers, however, specific advice should be sought.

The Court of Appeal has refused leave to appeal, however, we anticipate the parties may consider requesting permission from the Supreme Court, given the limited guidance provided by the majority and persuasive dissenting judgment from the Master of the Rolls.

Please do not hesitate to contact our motor practice, or your usual contact, should you wish to explore any issues arising.