Experts have warned of continuing uncertainty over claims settlements involving periodical payments, following a decision by the Court of Appeal this week.

In Flora v Wakom, the Court refused to strike out the claimant's argument that periodical payments for future loss of earnings and care costs should be subject to annual increases based on wage inflation rather than retail price inflation.

This was despite the legislation governing periodical payments stating that the retail price index should be applied in all but "exceptional cases".

The Court of Appeal said the question should be resolved by a trial judge.

Allianz Cornhill, the defendant insurer, branded the decision "breathtaking" and "cynical" and warned it would slow down claims settlements.

Roy Hebburn, the insurer's divisional claims manager, said: "The effect of remitting Mr Flora's case - and potentially every case with a substantial future loss element - for review of expert evidence by a trial judge will lead to unnecessary delay and expense to the detriment of claimants and insurers."

He said the company would appeal to the House of Lords.

Andrew Parker, head of strategic litigation at law firm Beachcroft, which acted for Allianz Cornhill, said: "We remain confident that, if the evidence has to be examined in detail, the claimant's case will be rejected."

Law firm DLA Piper commented: "For insurers uncertainty remains as to whether annual assessments will be normally limited to retail price indexation, which is likely to prove less expensive than wage linked indexation."