Tort Damages Issues II

General and Special Damages

The general principle of damages is that the plaintiff should be put in the same position in so far as money can do so, in which he would have been,  but for the wrong. The assessment of general damages for personal injury, in one sense, involves a relatively subjective assessment of compensation by the court.  This may seem especially arbitrary in the case of serious or catastrophic personal injury. However, the law takes the approach that monetary compensation is better than nothing.

Special damages are damages which arise from the particular circumstances of the case. They are  “over and above” general damages.  They must be specifically pleaded in the claim so that the defendant is not surprised at trial.  In contrast, general damages are those which flow from the wrong automatically and need not be pleaded.

In other contexts, special damages refer to out of pocket expenses and loss of earnings arising before trial.  In this sense, they are quantifiable monetary damages. Damages that are not quantifiable in the same way, are referred to as general damages.

The courts assess damages in personal injury cases under a number of separate headings.  Even where damages are assessed under a number of headings, the courts hold that they must have regard to the overall sum.  It should in the circumstances of the case, represent fair compensation for the injuries suffered.  It should not be out of proportion in the circumstances.In a series of cases in the 1980s the Supreme Court suggested upper limits for general damages for pain and suffering.

Loss of Earnings

Loss of earnings up to trial will generally be quantifiable.  Loss of earning capacity and earnings post-trial will be more speculative.  The courts appraise the extent to which the injuries have caused financial loss, including loss of earnings into the future.  This involves assessing the probabilities, the physical condition of the claimant, the labour market and the particular industry, trade or business in which the claimant works.

The effect of physical injuries will vary relative to the type of work or employment undertaken by the claimant. The nature of the physical injury and its impact on the particular claimant’s capacity to earn his living must be considered, in relation to his existing employment or business. Alternative employment or business consistent with the injuries may be taken into account where it is reasonably available.

Physical injuries which would be catastrophic in one context may have a much lesser impact in other employment. An injury may restrict the claimant’s employment opportunities.  Compensation may be allowed for the narrowing of options in consequence of loss.If a person’s working life is cut short, he may be entitled to compensation for the lost years of work.

The state of the labour market will be relevant to the prospects of finding employment.  In times of recession, the Supreme Court has emphasised that the court should take account of the economy in assessing the future loss of earnings. The courts may make a deduction from loss of earnings based on the economic climate.  This reflects the fact that the claimant may not have been guaranteed employment, even had the injury not occurred.

However, an award of damages should reflect a longer horizon where both boom and bust times might reasonably be anticipated on the basis of past experience. The cyclical nature of the economy and business concerned will be taken into account.

Until the late 1960s, it was not practice in Ireland to make a deduction for the future effect of taxation.  The leading British case in the late 1950s decided that allowance should be made for the future taxation by way of reduction. An Irish High Court case in 1973, held that the effect of taxation should be taken into account.

Actuarial Evidence

Generally, actuarial evidence will be offered as to future employment and earnings possibilities and contingencies.  They will be based on particular assumptions.  In some cases, these assumptions may not be justified and evidence might be offered to challenge the basis of calculation and propose an alternative basis.

Although actuarial evidence is readily received in loss of earnings computations, it is not conclusive. 1980s cases on damages had urged cautioned in respect of the application of actuarial calculations to compensation for future loss of earnings and income.  It must be assessed as evidence in the ordinary way given by experts.

The actuary is not the judge on the matter of future loss. However, his guidance will be valuable.  Actuarial evidence may provide a guide but must be referenced to the particular facts and the assumptions on which it is based. Of necessity, the actuary’s calculations will be based on assumed facts.

Proposal for Periodic Payments Settlements

The only type of awards allowed at present are lump-sum awards.  They represent a once and for all payment for all past and  future losses, whether quantifiable in monetary terms or not. A working group has reported on the possibility of periodic payments in certain classes of personal injury cases.  The group has recommended that courts should have the power to make or to provide for settlements with periodic payments to injured victims in cases of catastrophic injury, in order to provide for future care and treatment, medical needs and appliances.

The group proposed that a periodic payments order might apply to the whole or part of the award, having regard to the nature of the injury and the circumstances.  It might be made if the court considered that it was in in the best interests of the claimant. It should be made, only where the court was satisfied that the continuity of payment was reasonably secured.  It was recommended that the State might be empowered to provide injured victims with the necessary security, to make payment by way of annuity or otherwise as appropriate.

This might apply for example,  in the event that the claimant contracts a particular disease at a future date. Proposals have also been made about the possibility of secured awards being provided, to deal with contingencies. At present, the possibilities and contingencies are simply factored into the lump sum, disregarding the ultimate outturn.

In recent years, the courts have approved a number of structured settlement agreements involving periodic payments in the case of State defendants.

LRC Report

The Law Reform Commission, in its report on personal injuries periodic payments and structured settlements published in 1996 recommended that there should be a provision in Law for interim awards, provisional awards, periodic payments and the use of structured . In 2010 the Senior Personal Injuries Judge of the High Court, established a working group on Medical Negligence Litigation and Periodic Payments which included amongst its terms of reference:

“to consider whether certain categories of damages for catastrophic injuries can or should be awarded by way of periodic payment orders and to make such recommendations to the President as may be necessary.”

This group recommended that legislation should to empower the Courts as an alternative to lump sum awards of damages to make it consensual and non-consensual period payment orders to compensate injured victims in cases of catastrophic injury where long term, permanent care will be required for the costs of:

• Future treatment;
• Future care
• The future provision of medical and assistive aids and appliances.

Where the Court considers it appropriate and in the best interests of that person that such an Order should be made, provided that the parties have been given an opportunity by the Court to make submissions and be heard in full on the relevant issues. The Court should be empowered to make periodic payment orders to compensate for the future loss of earnings only with the consent of all of the parties to the relevant claim.

Periodic payment orders may only be made in circumstances where the Court is satisfied that continuity of payment under the periodic payments order is reasonably secure. The State, through the NTMA, should be empowered to provide injured victims with the necessary security for periodic payments, either by the provision of annuities to insurers and others or in such other manner as may be appropriate.

It was recommended the provision  be made for adequate and appropriate indexation of period payments as an essential pre-requisite for their introduction as an appropriate form of compensation. The Group recommended the introduction of earnings and cost-related indices which will allow periodic payments to be index linked to the level of earnings of treatment and care personnel and to changes in costs of medical and assistive aids and appliances. This was to ensure that the claimant would be able to afford the future cost of treatment and care.

The group noted that the competence and independent status of the CSO qualified it to compile and maintain the indices required. Variation of PPO should be permitted where it has been determined that the Plaintiff’s condition will seriously deteriorate or significantly improve and where this future contingency has been factored into the original PPO.

It should also be permissible at the time of making a periodic payment order only to provide in that Order for “stepped payments” vis the adjustment on the attainment by the Plaintiff of a particular age or ages for the periodic payments as indexed to reflect an increase or decrease in living or care expenses.

Exemption from income tax for  payments was recommended. Primary legislation should confirm  the jurisdiction to make interim provisional awards of damages.

Book of Quantum

The Book of Quantum was published in 2004, in order to assist the Personal Injuries Board in assessing various types of personal injury claim.  It sets out general guidelines on the amounts of awards appropriate for specific types of injuries. The Book of Quantum does not deal with psychological and psychiatric injuries.

The Book of quantum is recognised by statute. The court, in assessing damages in a personal injury claim must have regard to the Book of Quantum.  The court is not prohibited from having regard to other matters when assessing damages in a personal injury case.

Most judges have been positively disposed towards the Book of Quantum.  It has the merit of bringing relative uniformity.  It provides a marker against which cases might be assessed. It reflects  practice in the United Kingdom, to some extent. In England and in Northern Ireland, the Judicial Studies Board, periodically issues guidelines for the assessment of General Damages in personal injury cases.

Other judges have taken a view that the Book of Quantum is no more than a useful guide.  Each individual case must be assessed on its merits.  On this view, the book is simplistic and does not differentiate between different claimants in accordance with age or other significant differences in circumstances.

The Book was not updated from 2004 until 2016.  Some judges indicated that  it was regrettable and unacceptable that the Book had not been updated since it was first published in 2004 and commented that, where the court is required by law to refer to it when assessing damages; it is unquestionably in the interests of the proper administration of justice that the Book be reviewed and be kept updated to properly reflect the awards of the courts.

The court has as least, a statutory requirement to refer to the Book when assessing damages in respect of any injuries where a range of damages is specified.  Some judges have taken the approach that regard may be had to the time elapsed since it was published. An updated Book of Quantum was published in 2016.

Collateral Benefits

A person may recover in respect of the cost of his medical care.  A person entitled to free hospital treatment is not obliged to avail of it, even though this might be argued to be a failure to  mitigate.

The Health Amendment Act 1986 required the HSE to charge injured parties for services that they would otherwise receive free of charge, if they could recover them in a personal injury case.

While a close relative takes on the role of carer, it appears that compensation will be awarded for the costs of the relative’s care for the claimant, notwithstanding that he might have provided the care anyway for personal and family reasons. The claimant is generally allowed compensation to enable the carer to be repaid for the care.  The courts may value the cost of care on a commercial or discounted basis. They tend to discount the amount payable to relations, relative to third party commercial providers.

There have been instances in Ireland of carers being compensated directly although the legal basis does not appear clear.

In cases of serious personal injury, it may be necessary to adapt the claimant’s accommodation.  The claimant may be allowed compensation for the additional cost of accommodation, beyond that which he or she, in the ordinary course would have incurred. but for the accident.

Collateral benefits such as the benefit of insurance policies or other payments which may become available to the defendant reduce  the expense and loss incurred by the claimant as a result of the injury. The Civil Liability Act Amendment (1964) provides that in assessing damages in an action to recover damages in respect of wrongful act including a crime resulting in personal injury not causing death, account shall not be taken of any sum payable in respect of the injury under any contract of insurance or any pension, gratuity or like benefit payable under statute or in consequence of the injury.  An equivalent provision applies under the Civil Liability act 1961 in respect of a claim for wrongful death.

Aggravated Damages

Aggravated damages lie between ordinary damages and punitive damages. Aggravated damages may be awarded where as additional compensation,  where the injury has been caused or exacerbated by the exceptional conduct of the defendant. There may be an element of punishment involved.  They may recognise the added hurt or insult to a claimant who has been wronged and / or may condemn the cavalier and outrageous conduct of the defendant.

Aggravated damages may arise by reason of the manner in which the wrong was perpetrated.  There may be elements of oppressive behaviour, arrogance or outrage in his conduct. The misconduct may occur after the commission of the wrong such, in some cases where it is warranted,  by refusal to apologise or ameliorate the harm done. The wrongdoer may have made threats, repeated the wrong or engaged in like the conduct  up to and including in the defence of a claim and the conduct of the  trial.