Local authority care costs will be included in assessment of damages say judges

Insurers have won a significant legal victory that could save them millions of pounds in personal injury and clinical negligence claims.

In Andre Crofton v The National Health Service Litigation Authority the Court of Appeal ruled that if a person obtains payments from his local authority to pay for care needs, those payments must be taken into account in the assessment of damages.

In the decision, Lord Justice Dyson said it could lead to insurers receiving a windfall because their liability would be reduced.

Jeff Zindani, managing director of Forumlaw Solicitors, said the ruling was bad news for claimant lawyers, and that insurers were the big winners in the case.

He said: "It could lead to millions of pounds in savings for insurers. For claimant lawyers this goes against the current reforms of trying to make the wrongdoer responsible. This is a legal dog's breakfast, there is an urgent need for reform."

Crofton's lawyers had lodged an appeal to argue that the reduction he was set to receive in his compensation was unfair. The Court dismissed his appeal.

Janet Sayers, head of healthcare at law firm Kennedys, who represented the NHS Litigation Authority, said: "There can no longer be any doubt about this issue which has caused much disagreement between clinical negligence lawyers for the past few years.

"The unanimous Court of Appeal judgment means there is now certainty. The NHS Litigation Authority and those compensators of claims will no longer be over-compensating a person where they are in receipt of payments from their local authority to pay for services or care."

She added: "It will mean that where a person is in receipt of state funding, the NHS litigation Authority or other compensators/insurers will be paying less in future care payments."