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Tuesday, 21 November 2017

Lord Sumption openly calls for limits on PI damages to protect insurers' profits

If the insurance industry was in need of a high profile advocate it has found one in the shape of a Supreme Court judge no less.

Lord Sumption was elevated to the Supreme Court in 2012, directly from the bar. In 2005 he appeared in The Lawyer’s list of barrister’s earning more than £2m a year.

He famously acted for Roman Abramovic for a fee alleged to have been £10m although his chambers insisted it was mere £3m –

Interestingly in the late 1970s he co-wrote a book called Equality with the late Keith Joseph, member of Margaret Thatcher’s cabinet. I haven’t read it (!) but according to an enthusiastic Amazon reviewer –

‘To a considerable extent the book is an expose --- an expose of the woolly thinking, bad logic and incredible assumptions that have underlain the utterances of those who advocate economic equality. Nor is it merely a critique of extreme egalitarianism. The logic is as bad and the assumptions as untenable whether it is complete or only partial equality that one wishes to enforce.

I cannot comment on the detail but it is probably fair to say that this book was not a call for equality and justice for all. It is probably also fair to say that his practice at the bar did not bring him into contact with many ordinary people seeking compensation for injuries.

All of this brings me to his recent speech to the Personal Injury Bar Association (PIBA). In the speech, entitled -  Abolishing Personal Injury Law – A Project, he launched a full-on broadside against victims. He firstly called for removal of indemnity as the basis for compensation and to replace it with some sort of tariff, in the hope of removing ‘small claims’. Damages for pain and suffering can be abolished save for those suffering long term injuries.  

Most alarmingly he called for a re-think on the basis for calculating loss of earnings. He suggested that such claims might be linked to a reasonable standard of living rather than replacement of actual earnings.

This is something which defendant bodies have been advocating recently.

It is hard to imagine a more damaging proposal. So, a doctor on a reasonably high income becomes unable to work due to a motor accident. She still has a mortgage to pay. She may well have a nice house but why should she lose it because of someone else’s bad driving. This sounds like a call for punishment of victims.

His Lordship did not conceal his sympathy for the beleaguered insurers –

‘Thirdly, although the taxpayer has a bottomless pocket, insurers do not. Beyond a certain point, the cost of rising claims volumes cannot simply be piled onto premiums and begin to erode profits.’

All of this was said against the background of our current ‘fault’ based system which tended to favour claimants.

Some may agree with his views. Many will disagree, particularly among those who fight for justice for those who are injured. He is entitled to his view and to express that view.

But it is still disturbing to hear one of our most senior judges openly flying the flag for insurers.

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