Supreme Court ruling on the correct approach for assessing PSLA in “mixed injury” claims

In a judgment welcomed by claimants, the Supreme Court has upheld the Court of Appeal’s decision in the case of Hassam & Anor v Rabot & Anor [2023] EWCA Civ 19 in respect of the correct approach to take when assessing damages in mixed injury cases.

Mixed injury cases are those where a claimant suffers a whiplash injury which falls within the scope of the fixed tariff system contained within the Whiplash Injury Regulations 2021 (made under the Civil Liability Act 2018) but also suffers additional injury which does not fall within the tariff system and is subject to a common law assessment of damages.

The Whiplash Injury Regulations 2021 apply a tariff amount to whiplash injuries of up to 2 years’ duration (including those accompanied by minor psychological injuries). These tariff amounts are lower than would otherwise have been allowed applying a common law assessment of damages.

The Supreme Court had to determine the correct approach when assessing damages in cases involving both tariff and non-tariff injuries, a scenario that is not at all uncommon. In doing so,  it had to interpret the meaning of s.3 of the Civil Liability Act 2018  which states that the amount of damages for the PSLA payable in respect of the whiplash injury was to be an amount specified in tariff but (s.3(8)) “nothing in this section prevents a court, in a case where a person suffers an injury or injuries in addition to an injury or injuries to which regulations under this section apply, awarding an amount of damages for [PSLA] that reflects the combined effect of the person’s injuries”.

The Supreme Court discussed the 3 possible approaches to assessing concurrent PSLA caused by tariff and non-tariff injuries:

1. Treat the tariff award as fully compensating for all PSLA caused by the whiplash injury as well as any PSLA caused by a non-whiplash injury suffered at the same time. An additional sum should only be added for non-concurrent PSLA caused by a non-whiplash injury i.e. suffering separate to that already being experienced due to the whiplash injury, to avoid double recovery. This approach was supported by the defendants (and the Master of the Rolls in the Court of Appeal).
2. Add the tariff award and common law amount together, with no deduction to reflect double recovery. This approach was favoured by the claimants.
3. Add the tariff amount and the non-tariff common law amount together, and then take a view on whether a deduction is necessary to reflect double recovery, but ensuring that any deduction does not reduce the overall damages sum to less than it would have been for the non-whiplash injuries alone. (This had been the Court of Appeal’s approach in a 2-1 majority judgment, and was supported by the claimants as a fall-back position to 2).

The Court of Appeal had previously provided guidance on the correct approach to take when assessing damages in respect of multiple injuries, in the case of Sadler v Filipak [2011] EWCA Civ 1728. The principle established was that it was “always necessary to stand back from the compilation of the individual figures… to consider whether the award for pain, suffering and loss of amenity should be greater than the sum of the parts in order properly to reflect the combined effect of all the injuries upon the injured person’s recovering quality of life or, on the contrary, should be smaller than the sum of the parts in order to remove and element of double counting.” (Pitchford LJ at [34]). Application of the Sadler approach usually results in a significant reduction to the total.

The Supreme Court held that the claimants’ favoured approach of adding together the two sums could not be permitted. It rejected their submission that double recovery was permitted by the 2018 Act. Such an approach would be inconsistent with Sadler.

In respect of the defendants’ favoured approach, the Court made clear that the intention of the tariff system was not to alter the common law process of the assessment or value of non-tariff injuries. The legislation was directed and confined exclusively to whiplash injuries, and to adopt such an approach reflected a misinterpretation of s.3 of the 2018 Act.

It was observed that, if the defendant’s preferred approach was adopted, it could result in situations where a Claimant ended up with a lower sum of damages for both injuries than would have been awarded for the non-whiplash injury alone, incentivising Claimants to omit whiplash injuries to avoid tariff awards. It would also represent a departure from the Sadler approach, as with the Claimants’ preferred option. Furthermore, it was unattractive on grounds of practicality, requiring an assessment to be made of precisely what constituted concurrent PSLA and potentially driving up legal costs to support the analysis.

The third approach (the Court of Appeal’s) was preferred, and its decision was upheld by the Supreme Court unanimously. In doing so, and notably, the interpretation placed on s.3 of the 2018 Act by the Master of the Rolls was rejected.

Comment

The introduction of a tariff system for whiplash injuries created to address what had been regarded as a particular mischief (namely, the propensity of UK drivers to bring claims for whiplash in huge numbers and at considerable cost) was inevitably going to sit uncomfortably within the existing common law compensation framework and give rise to challenging scenarios.

Those who advocate for claimants have objected to what they regard as artificially low awards under the tariff system for genuine injury. They regularly observe that the promised reduction in insurance premiums has not materialised (perhaps underplaying how many different factors come into the determination of premium and the enormous increase in the costs of repair). They will be pleased that the Supreme Court so resoundingly rejected the Master of the Rolls’ interpretation of the 2018 Act and will presumably feel that a sensible course has been navigated between the application of s.3 of the Act and the common law principles governing the valuation of injury.

Conversely, insurers will remain concerned that the judgment will encourage the identification of potentially spurious non-tariff injuries to escape the straight jacket of the whiplash tariff. The Supreme Court’s response to that argument was that, even if there was evidence of such game-playing, it was for Parliament to address.

Therefore, despite Parliament legislating for fixed sums of compensation for whiplash injuries, Rabot arguably provides a way of avoiding this and creates an incentive for claimants to bring mixed injury claims. That incentive will be heightened by the recent publication of the 17^th edition of the Judicial College Guidelines, which uplifts almost all figures by over 22% to reflect the increase in RPI since the 16^th edition.  Further, the MOJ have called for a review of whiplash tariff amounts to be completed by the end of May 2024. As such, whiplash and mixed injury claims may further increase in value.

Given the volume of such cases, that renders this a significant judgment, a welcome result for claimants, and a cause for some dismay amongst insurers and all of those who pay for motor insurance.