Could inflation help your personal injury claim?

What’s the current inflation rate?

Inflation, which is the rate at which the prices of goods and services increase, is currently at 6.7% for September this year, which has remained relatively unchanged from the month of June. Although, the rate is much lower than when inflation peaked at 10.4% in February, it still remains high compared to three years ago when it was only 0.5%. 

The Bank of England forecast inflation to fall to 2% by the end of 2025, though it’s important to bear in mind that this is the target rate set by the Government for the Bank of England to achieve. The forecast may not have considered further geopolitical instabilities, which have become a frequent occurrence over the past few years.

The decision in Blair v Jaber

Although inflation is causing a devastating impact on people’s livelihoods, it could be beneficial for people considering a personal injury claim. A recent decision by Recorder (a part-time judge in the Crown or County Court) Jack, in Blair v Jaber [2023] EW Misc 3 (CC), considered the impact of inflation when referring to the Judicial College Guidelines (“Guidelines”), which is regularly used by the Courts to assess the value of a personal injury claim based on the injuries sustained by the Claimant.

In this case, the claim was brought by two taxi passengers, who sustained injuries when the taxi driver, the Defendant in the case, abruptly braked at a roundabout. In the proceedings that followed, the Defendant denied liability, and the Recorder decided in favour of the Claimants albeit with a finding of contributory negligence as the Claimants didn’t have their seatbelts on.

In assessing general damages, which are intended to compensate Claimants for, among other things, pain and suffering, emotional distress and lost quality of life, and in consideration that the Guidelines were 11 months old at the time of trial, the Recorder stated in his judgment, “I first make a general point about the Judicial College Guidelines. The current edition was published on 11 April 2022, nearly a year ago. The figures in this latest edition were probably finalised earlier. Since then, we have had inflation such as has not been seen since the 1970s. The Office of National Statistics figure for January 2023 released on 15 February 2023 showed the Retail Price Index at 13.4% per annum”.

The Recorder further stated, “The Judicial College Guidelines, unlike the Northern Irish Green Book, do not take future inflation into account. I need to consider whether the figures in the guidelines should be increased to take the unexpected and massive increase in inflation into account… If there is a change in circumstances between April 2022 and today, that is a matter to take into account when assessing damages. The very substantial drop in the value of money which has taken place since April 2022 is just such a circumstance. Accordingly, the Judicial College figures needs to be increased by, in my judgment, about 12%”. 

Therefore, the Claimants received a 12% uplift in damages due to the high rate of inflation at that time. It’s important to note that the Recorder did not have a copy of the Guidelines available before him, and the rate of 12% should have actually been 19%, as the retail price index (“RPI”) was 308.6 in September 2021 and 367.2 in March 2023, based on figures published by the Office for National Statistics.

What uplift could I be awarded today?

According to the Office for National Statistics, the RPI had increased by 22.6% from September 2021 to September 2023 (the latest figures published), which would mean that Claimants could expect to receive a 22.6% uplift in general damages if the decision in Blair v Jaber is followed. This rate could change based on the RPI published for the months following September 2023.

Is this decision being followed in practice?

Decisions of the County Courts are not binding, as the judges of Courts of first instance are not bound to follow the decisions of judges in the same Court. Furthermore, the Guidelines are simply guidelines and are at the discretion of the Court to apply, though it is the case that the Guidelines are consistently applied in assessing general damages. In addition, the Recorder in Blair v Jaber, comparing the Guidelines to the Northern Irish Green Book (the equivalent of the Guidelines in Northern Ireland) to highlight the absence of an uplift for inflation in English Law, could lead to arguments being raised that elements of Northern Irish Law had been applied in the case, though the Northern Irish Green Book has no statutory or precedential effect. Therefore, there are going to be ongoing debates as to whether there should be an uplift to account for inflation and if so, whether the RPI would be the appropriate tool or indicator to be used.

However, the decision in Blair v Jaber has been argued in numerous cases, with conflicting outcomes, and despite the considerations above, until inflation falls to normal levels, the decision in the case may be brought to the attention of judges until the next edition of the Guidelines is released. It’s worth noting that a new edition of the Guidelines is published every three years, and the case above may continue to maintain its relevance at each penultimate year of new editions being published once the rates contained therein fall significantly below the inflation rate present at that time. Whether judges may accept such submissions is a matter for Counsels to adeptly argue on behalf of Claimants, which some have already achieved success in for the benefit of their clients.

The decision in Blair v Jaber also raises questions over its possible use in Part 36 offers. Please keep an eye out for more on that on our website!

If you think you may have a potential personal injury claim, our specialist Dispute Resolution team are on hand to assist. We encourage you to contact our experienced team for specialist advice and assistance, by contacting us here or by email: