Hirachand v Hirachand and Another

Why It Matters

The ruling clarifies that the Jackson 10 % damages uplift does not preclude success‑fee recovery, altering cost‑order dynamics and influencing the valuation of personal‑injury claims for insurers and claimants alike.

Key Takeaways

• Court examined Jackson reforms' 10% general damages increase.
• Judges clarified Section 58A does not block success fee recovery.
• Simmons v Castle decisions illustrate implementation of reform package.
• ABI and PI Bar argued against linking damages increase to fees.
• Reform package deemed imperfect, causing windfall and policy concerns.

Summary

The hearing centered on the implementation of Lord Justice Jackson’s recommended reforms, specifically the 10 % uplift to general damages in personal‑injury cases, and how the Court of Appeal has applied those reforms in the Simmons v Castle judgments.

Counsel highlighted that the two back‑to‑back decisions, reported in the weekly law reports, demonstrate the Court’s view that Section 58A does not create a statutory barrier to recovering success fees via general‑damages increases. The judges, including the Lord Chief Justice and Lord Justice Kay, affirmed that the uplift was introduced at common law, not by statutory instrument, and that it applies across tort and contract claims.

The Lord Chief Justice noted the reforms were a “package” and not a cherry‑picked measure, acknowledging imperfections such as windfalls for privately funded claimants. An economist’s testimony was cited to argue that the 10 % increase would, in most cases, leave claimants no worse off, while the Association of British Insurers and the Personal Injury Bar Association warned against conflating the uplift with success‑fee recoverability.

The discussion signals that insurers and litigants must reassess cost‑order strategies, as the Court’s interpretation effectively separates Section 58A’s scope from the Jackson uplift. Future claims will likely see a clearer pathway for success‑fee recovery outside cost orders, reshaping risk calculations for both claimants and insurers alike.

Original Description

Hirachand (Appellant) v Hirachand and another (Respondents)

UKSC/2022/0015

https://www.supremecourt.uk/cases/uksc-2022-0015.html

Hearing date: 18 January 2024

Session: Afternoon session [Session 2 of 2]

Judgment date: 18 December 2024

Neutral citation: [2024] UKSC 43