YOU can’t put a price on a life, so the saying goes, but agreeing the cost of a life blighted by pain and suffering, even temporarily, is not much easier.
In personal injuries cases, claimants generally seek compensation in the form of both general damages and special damages, the former for the pain and suffering the injury caused and/or continues to cause them and the latter for the out of pocket expenses they have incurred and will incur, plus loss of earnings to date and/or into the future.
A bit of guesswork is involved in the latter because it’s hard to predict the future and how financially successful the plaintiff would have been in terms of career advancement if they weren’t held back by injury.
But the maths is much less emotive than when the calculators come out to tot up general damages.
A landmark appeal to the Supreme Court in 1984 illustrates the problem. A young man left paraplegic in an accident was awarded IR£800,000 in general damages by a jury clearly sympathetic to his plight.
On appeal, however, the Supreme Court reduced the award drastically to £150,000, ruling that general damages should not be punitive and should take into account the impact on wider society.
Chief Justice O’Higgins stated in his judgement: “Since money cannot possibly compensate [for quadriplegia], a jury may question whether it matters what sum is awarded.
“The answer must be that it does matter. It matters to the defendant or his indemnifiers, and would be a ground for legitimate complaint if the sum awarded were so high as to constitute a punishment… rather than… an attempt to compensate the injured.
“It also matters to contemporary society if, by reason of the amount decided upon and the example it sets for other determinations of damages by juries, the operation of public policy would be thereby endangered.”
The sum of IR£150,000 was widely viewed as a cap on general damages which future awards should not exceed. But fairly quickly, the cap was tossed away and awards for similar and lesser injuries rose and, in 1988, legislation was passed to remove juries from personal injury cases, leaving them in what was considered the more objective hands of judges alone.
Judges needed guidance, however — particularly when they tended to recoil from the notion of involving wider society in their decisions – and with the establishment of the Injuries Board in 2004, came a Book of Quantum, updated last year, which set out in detail the sums considered reasonable to compensate for any one of hundreds of different injuries to just about every part of the body.
While the book was meant primarily for use by the out-of-court Injuries Board assessors, it was presumed it would have a knock-on effect on awards in cases.
Litigation costs an issue for years
THE latest focus on the costs of personal injury claims is just that — the latest in a long line of crusades.
In 1962, then minister for justice, Charles Haughey, set up the Committee on Court Practice and Procedure to, among other things, “inquire into the operation of the courts and to consider whether the cost of litigation could be reduced”.
Fast forward to 1986 and an Oireachtas committee headed by then Fine Gael deputy, Ivan Yates, produced a report seeking urgent action on the problem, which he said was strangling small businesses. Its main recommendation was to provide an alternative to the courts for settling claims.
In 1996, Pat Rabbitte, then a Democratic Left junior minister, commissioned an independent report from consultants, Deloitte and Touche, which chronicled similar problems and made similar recommendations.
That led to another report, in 1997, jointly compiled by the unions, employers, and government departments. This concluded that an independent personal injuries tribunal should be set up.
By then, the term ‘compo culture’ was embedded in public and political debate and feelings were running high, as evidenced by the statement of then minister for defence, Michael Smith.
“We have to strongly attack the compensation culture, which is eating at the heart of our society and which has the potential to cause grievous harm to our economy,” he warned.
“To put it very simply. If compensation is to be paid out to somebody for every one of life’s little mishaps, the cost will eventually make the State economically uninhabitable.”
Smith was dealing with the army deafness claims — which would go on to cost the State €290m — so his alarm was understandable.
Arguably, it was also justifiable. In 1986, when Ivan Yates called for urgent action, lititgation costs were about 15% the cost of insurance claims. By 1996, when Pat Rabbitte was doing the same, the figure was 25%. By the time then minister for enterprise, Mary Harney, tried to reign in costs, they had risen to 42%.
Her department headed up the government’s Insurance Reform Programme, one aspect of which was the establishment, in 2004, of the Personal Injuries Assessment Board. The aim was to provide a court-free, lawyer-free procedure for claimants and defendants, and their insurers, to settle claims in a cheaper, faster way.
The very fact that, last year, the latest government set up a Working Group on the Cost of Insurance, shows it didn’t have quite the desired effect.
The working group published its first report in January, looking specifically at motor insurance, and called for the setting up of a Personal Injuries Commission to examine the whole area.
Mr Justice Nicholas Kearns has been appointed chair and is due to report back in the middle of 2018.