General Damages
Compensation for Personal Injury
Compensation in a civil action for tort is awarded by way of a lump sum. The award is made at the conclusion of the trial. This is a once and for all, non-reviewable sum. The fact that later circumstances showed to be too high or too low is irrelevant.
Special damages are measurable losses and expenses, such as medical costs and loss of earnings prior to the trial. They usually also include future quantifiable losses.
Most future loss and damage, damage for pain and suffering, whether before or after the trial, together with damage for loss of amenities and other immeasurable factors, including life expectation, disabilities and disfigurement, are awarded globally as general damages. It has become more common for courts to itemise awards of damage.
Damages are categorised as special damages or general damages. Special damages must be more specifically pleaded. Special damages are out-of-pocket expenses that can be determined by adding together all the plaintiff’s quantifiable financial losses. Some types of loss may be special damages or general damages depending on the circumstances and the manner in which the claim is made.
The question of periodic payments and review of compensation awards has been raised from time to time. Legislation may be enacted allowing for periodic payments, which may be adjusted to take account of later circumstances.
Due to some extent to the desirability of ascertaining the extent of symptoms and letting them settle down, and to the delays in the civil litigation process, most cases do not go to trial many years later. In the majority of cases which settle, the settlements occur relatively late in the day unless an Injuries Board offer has been accepted.
The courts have commenced making structured injury compensation awards, although the vast majority of personal injury claims are determined on the conventional base.
The civil compensation scheme seeks to award full compensation to the claimant who without fault on his part, suffers personal injury or other loss by reason of the fault of another, for the consequences of that fault, in so far as money is capable of so doing.
Assessment of Compensation
The assessment of compensation involves an appraisal of what would have happened but for the accident and an appraisal of what will happen in the future. Both will usually involve very considerable uncertainty and guesswork. The judge may have to appraise the probable outcome of long-term injuries and whether a complete recovery will be made. He may have to decide the degree of future disability and its impairment of the claimant ’s earning capacity.
Consideration may be required as to whether there will be further pain and discomfort. Life expectancy might be shortened. There may be a risk of complications with some injuries. Some risks and complications may be extremely serious but have relatively low probability.
Evidence will be put forward o the judge on the above issues, where relevant. Each side may present contradictory evidence. The judge must determine the position on the basis of the evidence on the balance of probabilities. He may then infer and hypothesize future unknowns and probabilities on the basis of such findings
The total of the various probable losses is ultimately reduced into a single lump sum. The judge need not articulate all these probabilities and possibilities where the weight and range of factors that bear upon the compensation award are necessarily complex. It may involve substantial if informed, guesswork in relation to the future.
The effect of a single lump sum award for all time is that irrespective of the uncertainty and future outcomes, there is no later possibility of correction. In cases where the awards are based on probability, they are necessarily incorrect, in one sense. If the probability occurs, the compensation will be a fraction representing the probability of the occurrence. If it does not emerge, the compensation will have been excessive.
It is sometimes alleged that psychological factors may delay recovery until after a trial or settlement. On the other hand, it is sometimes claimed turn there may be prejudice against so-called compensation neurosis on the part of judges which may lead to under compensation.
In some case, there may be separate trials on the liability and damage. This allows for the assessment of damages in complex cases to be postponed, until the defendant’s liability is determined. Liability is often accepted so that the trial deals only with the issue of damages. An interim award may be made if the claimant is determined to be liable or where the defendant’s liability has been accepted.
Present and Future Losses
Damages for pre-trial loss quantifiable in money terms may in principle carry interest to the date of trial In England and Wales, the pre-trial loss for pain and suffering has been held to bear interest.
Damage for future loss in earnings does not carry interest. They are effectively a discounted value of the future loss.
Pre-trial loss of earnings will be generally quantifiable. Post-trial losses involve predictions and guesswork, which may be informed to a certain extent by the evidence before the court. The courts do not take generally use scientific measures. However, some scientific or mathematical methods may be used in the calculation of particular types of loss.
Reduced earnings may be capitalised based on a multiple, equivalent the discount rate held to be appropriate. This may then be reduced to cover contingencies, such that the person may not have lived as long etc. In other cases, the multiple / discount rate may factor in these contingencies. The process may be more or less systematic or scientific.
The Appeal Courts may interfere with awards that are out of reasonable ranges. However, an Appeal Court will not change an award simply because it disagrees on the basis that it is too high or too low. This is necessary so as otherwise there would be an incentive to fight every case to an appeal. It also reflects the fact that the Court of Civil Appeal and Supreme Court do not retry the case; they review it on the basis of the transcript.
Since the 1980s forward, the superior court in Ireland have sought to place upper limits on an award of damages for pain and suffering.
Future Losses
In some cases where there is a very serious injury, it is desirable for the trial to be postponed until the injuries have settled to a final stage of development or there has been a recovery.
The may be difficulties in predicting the loss of future earnings consequent injuries. It will not be evident whether a person skilled in an area which is now cut off as a result of the injury, may be able to obtain alternative employment and if so, to what extent that would offset his lost earnings.
Just as future events are predictable, the future course of taxation may be highly uncertain and may change significantly. In the past, tax rates on high income were extremely high. The issue is also affected by the partial availability exemptions from income tax of most personal injury awards, with a more limited exemption for the income on investments thereof.
There may be a variation in the award of damages, if the award is appealed. A Circuit Court award or order may be appealed is by way of a rehearing in the High Court. In the case of the High Court, the Supreme Court or Court of Civil Appeal does not rehear the case but reviews the evidence. The scope of the appeal is relatively narrow. If it adjusts the award, it may do so on the basis of errors of law or principle, rather than on a reappraisal of the facts.
Proposals have been made over the years for provisions allowing for the possibility of reopening awards. A practical difficulty with such proposals, is that it leaves insurance companies unable to close their books and accounts. This has proved a significant barrier to variable awards to date.
Issues with Future Uncertainty
Although, there may be after the event uncertainty for insurance companies, there are financial techniques and instruments which could be used to deal with converting the future probabilities into determinable present day sums for a whole class rather than an individual. Although there might be variation in particular cases, insurance companies and their actuaries could determine the position as apples to a group with and acceptable level of accuracy.
Another difficulty with variable award arises in the context of a settlement. The vast majority of cases settle. It would involve considerable complexity to provide for the opening and review of of settlement agreements. The settlement agreement could allow, by its terms for future variation. The possibility of dispute in such cases could be considerable to recurrent re-litigation of issues which might swamp the courts. Even with arbitration, there is a considerable risk scope for costs if such issues could be reopened.
Actuarial Evidence
The courts may hear actuarial evidence in relation to future losses. This is commonly offered cases involving significant loss of future earnings. Although, actuarial evidence is based on probabilities, there may be a shortage of relevant data available in many cases.
Actuarial techniques have been devised to enable to calculate insurance premiums for different classes of persons. This is to ensure that sufficient reserves are kept. However, an actuarial assessment of an individual in a personal injuries award is not seeking to find the average result or outcome. It is seeking to ascertain the “correct position”.
It is possible that the average may represent the correct or fair loss of earnings. However, the actuarial method of converting across-the-board averages into a particular lump sum, ay not represent fair or appropriate compensation in an individual case. Damages should be full and fair.
Periods of inflation have had a severely negative effect on lump-sum compensation awards, made in the past. Awards for future nursing care may prove grossly inadequate following periods of inflation.
Intangible Losses
Most difficult to quantify are intangible or psychological losses including pain and suffering, disabilities and loss of expectation to life. Damages for mental stress, humiliation, discomfort and dignity are usually lumped together as pain and suffering. It is difficult to impossible to measure in damages the losses concerned.
It has been suggested that the value of an injury is the amount that the person would have been willing to pay to incur it. However, this is highly artificial and hypothetical. A person might be willing to pay virtually infinite quantities of money in order to avoid serious injuries.The value of monies differs relative to the wealth of the recipient.
The courts have sought to place extreme outer limits on what is regarded as reasonable compensation. Prior to the abolition of injuries, the question was left to the jury as a whole. This had produced many high levels of awards and was one of the key factors in the abolition of juries in most personal injury actions, in 1988. The Book of Quantum has sought to place limits in assisting quantification of various types of personal injuries and losses including in particular intangible losses of that type above. It has sought to introduce consistency.
The courts in the last 40 to 50 years, courts have laid more emphasis on the subjective factors in assessing compensation for intangible losses, of the types mentioned above. Certain types of loss impact more severely on certain persons depending on their occupation, gender, age and circumstances. A person who pursues hobbies and interests, sports may be more impacted particularly by certain types of injury which prevent him from enjoying his activity more than another. Accordingly, compensation should be awarded for such loss.
The position becomes anomalous in the case of persons who have lost all senses or are in a coma or equivalent state. In these cases, the courts have awarded less damages for pain and suffering on the absence of consciousness of their position. Although, there is a logic to this subjective approach, its results in the position that the level of objective loss is not compensated.
The law allows recovery of damages for so-called nervous shock, within certain parameters and subject to limitations. Nervous shock is the most commonly used legal label for psychiatric or psychological injury. Psychiatric injuries include depression, posttraumatic stress disorder, psychosomatic pain, anxiety and panic attacks. In this context, the normal mitigation rules apply.
Fatal Injuries
Fatal injuries may lead to two types of claim. The more substantial claim is usually that for loss of dependency. Where a person has been killed who was “breadwinner”, a spouse and other dependents may take action. The loss is suffered by the dependants themselves on their own account and they take the action as such.
There is limited claim in fatal injuries cases for compensation for mental distress. It is subject to a financial cap. It is open only, to a relatively limited class of relatives.
Dependants need not necessarily be spouses and children. There may be parents and others who can show actual financial dependence and reliance on the deceased. The second type of awards are relatively small by way of “solatium”; mental distress. It is capped at €35,000 in total.