Insurers are to appeal against a court ruling on periodical payments that threatens to create uncertainty and increase claims costs.
The appeal will revolve around whether future loss of earnings and future costs of care should be indexed by reference to the Average Earnings Index rather than the Retail Price Index (RPI).
The claimant in Singh Flora v Wakom had argued that future loss of earnings and care costs should be based on the Average Earnings Index, which has historically risen at a rate higher than the RPI.
But defendant insurers said the legislation governing periodical payments had intended that the RPI should be used in all but exceptional cases. The judge dismissed the insurers' argument.
Andrew Parker, head of the strategic litigation unit at Beachcroft Wansbroughs, which acted for the defendants, said the case could set a precedent allowing claimants to opt for any type of indexation that was greater than RPI, throwing the insurance industry into uncertainty.
"If the judgment is permitted to stand, there will be significant expense and delay for severely injured litigants in many cases," he said.
Lane Clark and Peacock partner Joe Monk said: "Such a decision could have an impact on claims reserves, particularly historic claims."
He said the reinsurance industry would be affected, with a knock-on effect on direct insurers through increased premiums.
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