‘Bandwidth’ PI model allows damages elasticity – LRC

The Law Reform Commission (LRC) has said that any law that caps personal injuries damages could leave itself open to a constitutional challenge in relation to the right to bodily integrity or property rights.

Any limits on these rights must not be arbitrary, must limit the rights as little as possible, and suggested limits must be proportional to a legitimate objective, the LRC says today (11 December).

The LRC has published its issues paper on capping damages in personal injuries actions as part of its fifth programme of law reform.

Constitutional challenge

It says that capping legislation could be at risk of a constitutional challenge if it either:

• Delegated the capping power to a minister without providing sufficient guiding principles (the ‘non-delegation’ principle),
• Involved an interference with the proper powers of the judiciary, and breached the separation of powers between the Oireachtas and the judiciary. 

Bodily integrity 

The key constitutional rights identified in the issues paper are:

• The right to bodily integrity (the right to be free from any law that would adversely affect a person’s health),
• Property rights (especially the right of access to courts and to an effective legal remedy where a person’s rights are affected),
• The right to equality before the law (which includes that a person will not be subject to any arbitrary or irrational treatment by the law). 

The Costs of Insurance Working Group (CIWG) and the Personal Injuries Commission (PIC) both recommended that the commission should examine whether to cap damages in personal injuries cases, and whether such a move would be constitutionally permissible.

Pain and suffering

The LRC is probing a cap on general damages for ‘pain and suffering’, whether mental or physical, which is weighted on whether the injury is temporary or permanent.

General damages are completely separate from what are called ‘special damages’ – the sum awarded for loss of wages or, in a very complicated or catastrophic injury, the on-going cost of medical care.

Proportionate damages

The issues paper notes that:

• Through case law since 1984, a maximum cap for general damages for catastrophic injury (for instance, quadriplegia) now stands at €500,000,

• Since 2015, the Court of Appeal has developed a three-point scale to ensure that awards of general damages are proportionate to the injuries suffered, and that they also take account of the upper limit of €500,000 for catastrophic cases,
• The Court of Appeal has stated that “minor injuries attract appropriately modest damages, middling injuries moderate damages, and more severe injuries damages of a level which are clearly distinguishable in terms of quantum from those that fall into the other lesser categories”, 
• This three-point scale provides a ‘range of bandwidth’ for the three different categories, mirroring the approach of the Book of Quantum, and similar guidelines published since the 1990s in England and Wales, and in the North of Ireland,

• The Court of Appeal three-point scale has reduced High Court awards in minor injuries, in some instances by 50%. In other instances, the Court of Appeal has increased awards. All of these developments have used the test of proportionality.

Legislative models

The issues paper explores possible legislative models for capping damages, ranging its research across other jurisdictions, notably Australia, and England and Wales.

There, similar principles for the awarding of general damages have been developed by the courts, and supplemented by legislation that caps some or all categories of injuries.

Three models

The issues paper proposes three models:

• Model 1 proposes a cap, set by primary legislation, similar to how sentencing occurs in criminal cases, using a proportionality test on a scale from zero (an entirely suspended sentence) to the maximum permissible sentence for the particular offence. Model 1 is based on the current Court-of-Appeal approach, 

• Model 2 proposes a scheme that combines elements of the New South Wales’ Civil Liability Act 2002 and the England and Wales Civil Liability Act 2018, under which general damages are capped, and all awards for lesser injuries are indexed to that cap.

This would allow the courts the discretion to determine the severity of injuries, and within which category those injuries should fall. However, once determined, the court would be required to award the corresponding percentage of the cap, operating a tariff-style system, with fixed sums to be determined by the Oireachtas.

The England and Wales Civil Liability Act 2018 fixes general damages’ tariffs for whiplash injuries, but provides for a ‘judicial uplift’, at the discretion of the courts. The LRC notes the risk that ‘uplifting’ may become the rule rather than the exception, 

• Model 3 proposes that either Models 1 or 2 (or any other method of capping) could be enacted, but the details could be delegated to a minister or other regulator.

Model 3 is closest to the current position and the courts should continue to determine the level of awards of general damages through case law, supplemented by the significant new provisions under the Judicial Council Act 2019. 

Debate has raged in Ireland about whether fluctuating insurance costs have been affected by the level of personal-injury awards in the courts. 

Sharp increases

Motor, employer and public liability insurance have veered in the last decade between low-cost premiums, followed by periods of sharp increases, and later reductions.

Some sectors, such as pre-school and leisure-related industries, have struggled to get cover.

In 2016, the Department of Finance established the Cost of Insurance Working Group (the CIWG), which pinpointed a range of further statutory and policy reforms in two reports, published in 2017 and 2018.

Clinical standards

Arising from the first CIWG report, the Department of Finance established the Personal Injuries Commission (PIC), which analysed international clinical standards for measuring personal injuries, including soft-tissue or whiplash injuries – the most commonly litigated type of injury – as well as the levels of awards for such injuries in other jurisdictions.

Chairman, Mr Justice Nicholas Kearns, commented that British award levels were ‘mean’ compared with those obtaining in the Republic.

The CIWG recommendations involve “complex matters that require whole-of-Government engagement, statutory reform as well as actions by the insurance sector,” the LRC says.

Wide-ranging guidelines

Since 2003, the Personal Injuries Assessment Board (PIAB) has published wide-ranging guidelines for the awarding of general damages, called the Book of Quantum (the most recent edition dating from 2016).

Current Book-of-Quantum guidelines will be updated, with new rules to be published by the Personal Injuries Committee of the Judicial Council under the Judicial Council Act 2019.

While those guidelines under the 2019 act will largely be based on court awards, a significant difference is that they will be free to depart from the ‘going rate’ in court awards.

Seeking views

The LRC is seeking views on its issues paper from interested parties, by 31 January 2020, in advance of its final report.

Emailed submissions may be sent to a dedicated address: p5p9@lawreform.ie.

The issues paper will be available on the commission’s website, www.lawreform.ie, from 9.30am today.