Damages for Personal Injuries

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Damages for Personal Injuries

• Presented by
• Deirdre Conlon, RSA

Disclaimer The Insurance Institute of Ireland
does not endorse or approve the content of any
third party.
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Irish Legal System

• Personal Injury claims are dealt with by a single
  judge, no jury
• We operate in an Adversarial System, rather than
  investigative, both sides presenting their cases
• Injuries Board will assess cases only where the
  final prognosis can be given within a nine month
  period or by consent of the plaintiff,15 months
  (S49 (4) PIAB Act 2004)
• Once off payments rather than Annuities
• Damages for Personal Injuries are Tax Exempt

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General Damages

• General Damages are awarded based on a system of
  precedents
• Civil Liability Courts Act 2004 stipulates
• S 22 (1) The court shall, in assessing damages
  in a personal injuries action, have regard to
  the Book of Quantum
• (2) Subsection (1) shall not operate to
  prohibit a court from having regard to matters
  other than the Book of Quantum when assessing
  damages in a personal injuries action
• In Sinnot v Quninnsworth 1984, the Supreme Court
  addressed the issue of General Damages in
  catastrophic cases. In that instance a 20 year
  old front seat passenger was rendered paraplegic
  in a car accident. The court considered what
  would constitute an appropriate level of General
  Damages and stated

4
General Damages

• What is to be provided for him in addition in the
  way of general damages is a sum, over and above
  these other sums, which is to be compensation,
  and only compensation. In assessing such a sum
  the objective must be to determine a figure which
  is fair and reasonable. To this end, it seems to
  me, that some regard should be had to the
  ordinary living standards in the country, to the
  general level of incomes, and to the things upon
  which the plaintiff might reasonably be expected
  to spend money.
• In my view, unless there are particular
  circumstances which suggest otherwise, general
  damages, in a case of this nature, should not
  exceed a sum in the region of 150,000.
• In Kealy -v- Minister for Health 1999 the judge
  commented
• Moreover, Sinnott -v- Quinnsworth Ltd was
  decided at a time of depression when interest
  rates were high and incomes, relative to the
  present day, small....
• In my view the correct measure of damages for the
  appellant for general damages for a lady whose
  life has been effectively ruined is 250,000.
• In the case of McEneaney v Coillte, 2001,the
  courts were once again asked to address the
  appropriate level of General Damages. The
  plaintiff argued that the level of General
  Damages had an equivalent level of between 230k
  and 600K

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Inflationary Factors

• The effect of inflation could be measured against
  a number of base lines
• Consumer Price Index
• GDP Deflator
• Average household Consumption
• Average Industrial Earnings
• GNP per head
• In McEneaney, the plaintiff was awarded damages
  of 200k/ 254k, the court felt the claimants
  injuries, paraplegia, were not comparable with
  those suffered by Sinnott. The judge held the
  maximum level of GDs in a catastrophic case were
  valued at 300k/380k.
• In recent years there has been a movement towards
  raising the limit on general damages. This is
  against a backdrop of an award of 1m in a case
  of unlawful detention for a period of 2 years
  significant awards in Hepatitis C actions and
  payments to victims of clerical sexual abuse.
• While judges have invited submissions from
  counsel and evidence from Economists, to date
  there has been no award of general damaged
  exceeding 400k

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Levels of General Damages

• Fatal Injuries- The Civil Liability Amendment Act
  1996 fixed the maximum amount payable for
  Solatium at 25,500.
• This figure is considered to be insubstantial and
  there has been an increase in the incidence of
  claims for Nervous Shock claims following the
  death of a relative/spouse
• Settlements/awards under this heading range from
  30k to 75k, depending on the proximity of
  relationship and extent of psychological injury.
• Some challenges are being made under the
  Convention for Human Rights pleading breaches
  arising from the loss of a parent.

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Injuries Board Awards

• Applicant sustained whiplash injury- absent from
  work for 2 weeks, underwent physiotherapy and
  expected t make a full recovery within 10 months
  awarded 4,800
• Applicant, male, sustained a sort tissue neck
  injury, pain and weakness in one arm and suffered
  from headaches he missed 2 days from work and
  was expected to make a recovery within 12 months
  - 15k
• Female, aged 26 sustained oft tissue injuries
  requiring physiotherapy and treatment with
  anti-inflammatory drugs. Missed 5 days from work
  and unable to attend the gym for 4 months. 12
  month injury. Awarded 11,500.
• Female, aged 30 suffered a low back injury which
  caused constant pain for 4 months. She was
  expected to recover within 12 to 18 months. She
  received little medical attention. Awarded 15k
• Claimant, female, sustained a cut to her little
  finger causing damage to a nerve with resultant
  loss of sensation. Awarded 22k.

8
Special Damages

• The levels of General Damages are eclipsed in the
  overall level of settlements/awards particularly
  where the level of special damages are
  substantial
• The main heads of Special damages in serious /
  catastrophic claims include
• Loss of Income
• Care Retrospective Future
• Aids Equipment, including Assistive Living
  Costs and transport
• Hospital charges future medical care costs
• Housing costs

9
Real Rate of Return/ Discount Rate

• The Irish Courts use actuarial tables to
  calculate the Capital value of future losses
• Actuarial tables incorporate the Irish Life
  Tables and reflect the Real Rate of Return which
  is the percentage return on investments
  available, above the level of inflation
• Before McEneaney v Monaghan County Council, the
  Irish courts accepted 4 as the appropriate rate
  of return
• Economists challenged the 4 figure
• Reference was made to the UK case of Wells v
  Wells (1998) which held that the appropriate RRT
  should be 3. In that case evidence was adduced
  of the returns available from Index Linked
  Government Securities.
• In McEneaney, it was argued that these investment
  bonds were unavailable in the Eurozone and that
  the yield from Government Securities was 4.5 to
  5.2 against Eurozone average inflation rates of
  2 to 3 and therefore the appropriate RRT for
  Irish Securities was between 1.5 and 3.2. This
  evidence was not challenged by the Defence and
  the court held the appropriate RRT was 2.5
• In a later case of Boyne v CIE, after the issue
  was argued by both sides, the court held a RRT of
  3 was appropriate
• The Civil Liability Courts Act 2004 confers
  power on the legislature to fix actuarial tables
  and RRT. This power hasnt been exercised

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Actuarial Tables

• Actuarial Tables (Sample Only)
• Age Capital Value of 1 per week
• Tax on Investment income
• Nil 20 42
• 20 1,255 1,391 1,568
• 25 1,182 1,298 1,448
• 30 1,097 1,193 1,314
• 35 997 1,073 1,168
• 40 882 939 1,009
• 45 750 790 837
• 50 599 624 652

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Loss of Earnings

• The injuries suffered by a plaintiff may affect
  their ability to return to their former
  occupation, or to any occupation at all. In the
  first instance, the medical specialist will opine
  whether the injuries have a vocational impact.
  Vocational assessors will report on the
  alternative employment opportunities available.
  In many cases a protracted period of absence from
  the workforce, on its own, will mitigate against
  a plaintiff resuming employment in the open
  market.
• Damages are calculated in a number of ways
• A figure to represent loss of earnings during
  recovery and a period of retraining, assuming the
  plaintiff will secure equally remunerated
  employment
• A lump sum to reflect a diminution in employment
  prospects. This basis is used where the plaintiff
  hasnt a proven history of employment e.g.
  children or students, or where the interruption
  is deferred to a later date e.g. a builder who
  sustains injuries which dont preclude return to
  work but where a Deterioration in their condition
  will interfere with their ability to continue
  working in the future.
• A differential in earning potential. This is
  calculated using actuarial tables and net weekly
  loss of income
• A total loss of income into the future, on the
  basis no employment will be available

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Loss of Earnings

• Reddy v Bates
• The Supreme Court in Reddy -v- Bates 1984 ILRM
  197 directed in that case that in calculating
  future loss of earnings account should be taken
  of the fact that at the time of assessment of the
  award there was a high rate of unemployment not
  only in Ireland but in Great Britain and in most
  member states of the E.E.C. (as it then was). The
  numbers of redundancies and closures of firms led
  to the conclusion that there was no longer any
  safe much less guaranteed employment
• Prevailing economic issues, the nature of the
  plaintiffs occupation and qualifications and the
  security of their tenure are to be considered
  when arguing a reduction for RvB. Figures are
  usually argued between 10 to 20, unless
  employment is almost guaranteed.

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S2 Civil Liability Act

• S 2 of the Civil Liability (Amendment) Act 1964
• This provides that
• In assessing damages in an action to recover
  damages in a 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
• (b) Any pension, gratuity or other like benefit
  payable under statute or otherwise in consequence
  of the injury
• Similar provisions are made in S50 of the Civil
  Liability Act 1950 to preclude deductions of
  death benefit or pensions in fatal injury
  actions.
• The effect is that a defendant may not take
  account of benefits received by claimants under
  permanent health policies arranged by them or by
  their employers for their benefit. It is not
  necessary that they are a party to the insurance,
  it is sufficient that they have an equitable
  right to enforce it or that the policy is made
  for his benefit.

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Deductions Of Social Welfare Benefits

• Not all social welfare benefits are deductible.
  The following sets out the position.
• PI- RTA, PI non RTA, Statutory provision
• Injury Benefit, Deductible, Deductible for 5
  years, S237 Social Welfare Consolidation Act
• Disablement benefit, Deductible, Deductible 5
  years, S237 Social Welfare Consolidation Act
• Invalidity Pension, Deductible for Not
  Deductible, S 237 Social Welfare, 5 years,
  Consolidation Act
• Disability benefit, Deduct 5 years, Not
  Deductible, S 237
• The effect of the non-deductibility of benefits
  is that many plaintiffs have no financial
  incentive to resume employment or retrain, this
  is an issue sometimes overlooked by the courts

15
Loss of Earnings Example

• Plaintiff, aged 30, shuttering carpenter, earning
  1,200 per week unable to resume work, but
  capable of working as digger driver _at_ 650 per
  week.
• Assume tax rate 42, loss to age 65, figures
  quoted net.
• Multiplier 1193, weekly loss 550
• 550 x 1193 656,150 15 Redy v Bates
  557,727
• Plaintiff, aged 45, employed as a driver at 700
  per week. May secure part time work at minimum
  wage for 20 hours per week
• 8.5 x 20 170per week differential of 530
  pw
• Multiplier 750- 530 x 750 397,500 10 RvB
  4357,750

16
Future Care

• Where serious injuries are sustained the
  plaintiff may plead future care as a head of
  damages. This can include
• Assistance with domestic chores e.g. where
  elderly plaintiffs are unable to manage all
  chores or in the case of serious back or hand
  injuries, plaintiffs require assistance with
  heavy housework and gardening
• Where plaintiffs sustain amputations, paraplegia,
  quadriplegia or brain injuries their care
  requirements include assistance with domestic
  duties, activities of daily living and personal
  care. In some cases sheltered accommodation,
  Peter Bradley Foundation or Hospital care is
  required
• The level of care is assessed by Rehabilitation
  Consultants and the care regime prepared and
  costed by Nursing Care consultants
• In McEneaney, the issue of the RRT in medical
  care cases was argued by the plaintiffs with no
  rebuttal evidence. It was held that medical
  inflation was 3 ahead of ordinary inflation and
  the appropriate RRT was -0.5. The decision
  hasnt been followed but remains in issue in many
  cases, and causes the value of claims, on paper,
  to be highly variable
• Of particular importance in catastrophic cases is
  the plaintiffs Life Expectancy

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Future Care Example

• Plaintiff- aged 25, incomplete quadriplecic
• Plaintiffs Claim
• At standard RRT 3,889,145
• Medical inflation _at_ 3 7,870,227
• Defendants Claim 758,642 ( life expectancy 35
  years)
• 989, 570 (life
  expectancy 45 years)

18
Medical Expenses

• The plaintiff will be charged a daily hospital
  rate for all treatment, which is recoverable from
  defendants
• Additional charges for private healthcare and
  treatment are recoverable, in addition
• Following Crilly v Farrington, in RTA cases, the
  hospitals will levy the daily hospital rate to be
  recovered from insurers. This is calculated based
  on the annual hospital costs divided by bed days.
  Figures range from 600 per day to over 1,000
• Most claimants who sustain catastrophic injuries
  are provided with a medical card guaranteeing
  free medical treatment. As this is means tested,
  the benefit is withdrawn on receipt by the
  plaintiff of a lump sum so insurers are faced
  with future medical expense claims
• The National Drug payment scheme renders
  plaintiffs liable for the first 95 per month of
  all equipment and drugs.
• Future medical costs include Bone scans,
  physiotherapy, occupational Therapy reviews,
  Urological treatment

19
Aids Appliances

• These costs include wheelchairs, special beds,
  hoists, the additional cost of adapted vehicles
  and prosthetics, kitchen equipment etc
• The requirements are agreed between
  Rehabilitation Consultants and Occupational
  Therapists who prepare cost reports
• Prosthetic consultants report where appropriate
• Claims now incorporate the additional costs of
  assistive technology, which is an emerging area
• When these costs are capitalised, the appropriate
  RRT, to reflect medical inflation, is usually in
  issue
• E.g. Equipment _at_ 0 inflation 1,204,407 _at_
  3 2,178,463
• Technology 1,360,265 2,492,411
• Defendant 132,944

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Housing

• Defendants are held liable for the cost of
  adapting houses to suit a plaintiffs needs, but
  are not responsible for the capital cost of
  purchasing a house
• The Building Regulations now requires that all
  new homes are suitable for wheelchairs
• In some cases, arguments are made for the cost of
  mini-hospitals where the plaintiff is provided
  with 24 hour care, and there is accommodation for
  carers
• Where plaintiffs are younger it is usual to
  allow the cost of adapting the family home and
  later adapting the plaintiffs own house

21
Proportionality Totality of the Award

• Notwithstanding the arguments which are made
  under each head of damages, relating to the needs
  and requirements appropriate for each plaintiff,
  and the prevailing economic issues, the awards
  made are subject to proportionality
• Paraplegic cases are still settling between 2m
  and 2.5m, depending on age and vocation. One
  settled for 2.25m, plaintiff male, aged 22,
  science student
• Incomplete Quadriplegic cases are valued at 3m
  to 4m. One case settled for 3.7m, involving a
  21 year old student who was training to be a
  teacher. She had limited use of her arms
• Another incomplete quadriplegic, soldier, age 23,
  loss of movement of one arm due to brachial
  plexus injury, settled for 3.1m
• 55 year old army officer sustained head injuries,
  and above knee amputation of leg, other medical
  complications, settled 1.75
• Child aged 6, serious pelvic fractures, head
  injury with frontal and lateral lobe defects
  settled and ruled 750k
• Plaintiff, female, aged 21, suffered loss of
  three fingers, awarded 648k
• Male, aged 32, sustained disc injury, requiring
  surgery and extensive pain management programme,
  unable to return to work as a fitter, settled
  345k