Capping personal injury awards to be examined in law reform review
Concern over insurance crisis sees reform tests fast-tracked
PROPOSALS to cap the size of awards for many types of personal injuries are being examined by the body which advises the Government on law reform.
The examination is being fast-tracked by the Law Reform Commission due to the ongoing concern that exists over the size of awards and high insurance costs which are threatening the viability of many businesses and organisations.
Four potential new models for deciding on general damages – the sum of money awarded for an injured person’s pain and suffering – will be looked at and a report is expected to be issued to the Government next year.
The models are outlined in an issues paper published today by the commission.
The examination is separate from the work to be done by a judicial committee recently set up under the Judicial Council Act to look at the recalibration of awards.
However, both initiatives flow from recommendations made by the Personal Injuries Commission (PIC), which found damages for soft tissue injuries were 4.4 times higher in Ireland than in England and Wales.
The PIC recommended the Law Reform Commission examine whether it would be constitutionally permissible, or otherwise desirable, to provide for a statutory regime that would place a cap or tariff on some or all categories of damages in personal injuries cases.
One option the commission will look at would see the Oireachtas setting awards caps via primary legislation.
Under this model, assessing damages in personal injury cases would be dealt with along similar lines as sentencing in criminal cases where judges use a proportionality test and a sliding scale of potential sentences.
Under another model, general damages would be capped and all awards for lesser injuries would be indexed to the cap. The court would have discretion to determine the severity of the plaintiff’s injuries and would then be required to award the corresponding percentage of the cap.
But there could also be an allowance for a “judicial uplift”, where the court would have discretion, subject to specified criteria, to award a sum for whiplash injuries greater than the set tariff.
The commission said such a “judicial uplift” could meet constitutional requirements by allowing courts to retain a certain level of discretion.
But on the other hand, it may conflict with the general purpose of a fixed tariff approach, in that there would be a risk uplifting may become the rule rather than the exception.
Under a third model, details of the cap would be determined by a Government minister or some other regulation-making body.
A fourth model proposes the courts continue to determine the level of awards through case law, subject to Judicial Council guidelines.
Law reform commissioner Raymond Byrne told the Irish Independent that whatever recommendation it ultimately makes, it will still be up to the Government to decide.
One of the first issues the commission will look at is whether there are constitutional difficulties in introducing caps.
Some business organisations, such as Isme, believe there is no constitutional issue. It points to the Civil Liability Act 1961, which caps damages for fatalities and has survived 58 years without constitutional challenge.
However, the commission will examine if the constitutional right to a fair remedy would be affected by the introduction of damages caps.
According to the issues paper, decisions by the Court of Appeal since 2015 had the effect that in a number of instances High Court awards were reduced in respect of minor injuries, in some instances by as much as 50pc.
But in other instances, the Court of Appeal increased awards where it considered the injuries were at the more severe end of the scale.