Law reform body reviews cap on personal injury awards

Legislation to cap personal injury awards that would safeguard judicial independence is being examined by the Law Reform Commission.

The commission has published a paper setting out four models for such a cap and has asked interested parties to express their views before the end of January 2020.

The commission is treating the topic as a priority. It is examining the constitutional restraints that exist in relation to legislators interfering in judicial decision-making, as well as the desirability of having a statutory regime that would place a cap on damages in personal injuries cases.

In an “issues paper” published on Wednesday, the commission notes that the topic of insurance costs has generated considerable public debate over why premiums have increased, and why some sectors have found themselves unable to get public liability insurance.

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The reasons suggested for the problem, it notes, have included some insurers offering unsustainably low premiums which required later correction, as well as the level of personal injury awards in the courts.

The commission is looking at the capping of general damages, which are the damages paid for an injured person’s pain and suffering, as against special damages, which cover such issues as loss of earnings or future medical care.

It notes that the courts, by way of case law, have developed a cap of €500,000 in general damages for the most catastrophic types of injury.

Rulings since 2015 in the Court of Appeal have established a three-point scale that stipulates that damages should be proportionate to the injuries suffered, with minor and middling injuries receiving appropriate awards that allow for “clearly distinguishable” awards for the most catastrophic cases.

The effect of this has been to cause some High Court awards for minor damages to be reduced on appeal by up to 50 per cent.

Constitutional restraints

Any attempt to impose caps on personal injury awards by way of legislation, as against by way of case law, would have to take note of a number of constitutional restraints, including the right of access to the courts, the right to effective legal remedies, and the right to equality before the law, the commission notes.

Any new law trying to cap damages would also have to avoid breaching the appropriate separation of powers between the Oireachtas and the judiciary.

The commission, in its paper, sets out four models for a legislative cap, including schemes where the cap on general damages would be set out and it would then be left to the courts to decide how each case that comes before a judge would be “indexed”, relative to that cap.

It notes that a provision to allow the courts to provide a “judicial uplift” to an award in a particular case could meet the constitutional requirement for judges’ discretion, but might conflict with the general purpose of a fixed tariff approach in that “uplifting may become the rule rather than the exception”.

One model suggested would provide for legislative capping with the size of the cap being determined by a minister or regulation-making body, perhaps with the principles and policies that would guide the determination of the tariff, set out in the law.

A personal injuries guidelines committee, which has been established on a preliminary basis under the Judicial Council Act, is meanwhile to set new guidelines for judges in personal injury cases.

It is chaired by Ms Justice Mary Irvine, now of the Supreme Court. As a judge in the Court of Appeal, Ms Justice Irvine made some of the key rulings on personal injuries damages and how they should be quantified. The committee, and the council, are expected to be formally established before the end of the year.