Huge increases in damages for accident victims on the way

Tens of thousands of motorists injured in car crashes can expect bumper increases in legal damages after six Court of Appeal test cases next month.

Tens of thousands of motorists injured in car crashes can expect bumper increases in legal damages after six Court of Appeal test cases next month.

Lawyers estimate 40,000 insurance claims are on hold awaiting the outcome of the hearings on February 28. A further 60,000 claims, likely to be settled before coming to court, are also being delayed.

The cases are expected to dramatically increase the damages paid to accident victims. Whiplash victims at present receive about £3,500 in damages for pain and suffering, that is likely to rise by at least 50 per cent to £5,000 and possibly double to £7,000.

Car insurance premiums are set to soar as a result of the hearings, with one expert predicting a rise of about 6 per cent above inflation next year to cover the extra cost estimated at between £500m and £700m a year.

The court hearings will also be a blow to the National Health Service, which faces a funding crisis because it will have to find hundreds of millions of pounds to pay damages to victims of medical negligence.

The court cases have been prompted by growing concern that damages awarded to accident victims are far too low.

A Law Commission report last year recommended that damages for pain and suffering should at least double in serious cases and rise by at least half for less serious accidents.

The Court of Appeal judges are expected to lean heavily on the findings of the Law Commission study.

The court cases have been delayed with the sanction of Lord Irvine, the Lord Chancellor, who is understood to have sent a circular to High Court judges advising them to allow claimants to adjourn cases until the test case rulings.

The knock-on effect for the NHS, which does not insure itself against medical negligence law suits because of the high cost of premiums, will be calamitous.

The NHS, which pays out between £250m and £300m a year to victims of medical negligence, is bracing itself for a flood of big claims.

"We are working on projections for the likely impact of the Law Commission recommendations. For all outstanding claims, it would certainly amount to hundreds of millions of pounds extra," admitted Steve Walker, chief executive of the NHS litigation authority. "No one knows where the extra money is coming from because at this stage no provision has been made for it."

Lawyers representing medical negligence victims have little sympathy for the NHS.

"If the NHS is going to plead poverty and say we cannot afford these damages, the answer is 'Don't injure people'. Look at prevention rather than compensation," said Ian Walker, president of the Association of Personal Injury Lawyers.

The Court of Appeal judges will look at five test cases - one involving a police woman claiming increased damages for post traumatic stress disorder, two asbestosis victims, one by a car crash victim who became a paraplegic, and one for a minor fracture.