Capping Damages in Personal Injuries Actions: A Summary of the Law Reform Commission’s Proposals
18 December 2019
Since 2015, the Court of Appeal has given a number of judgements which have had the effect of developing a three point scale to ensure awards of general damages are proportionate to the injuries suffered. The Law Reform Commission in its recently published Issues Paper, noted that this development has had the effect of reducing awards in the High Court, in some instances by up to 50%. The Commission emphasised the need for proportionality in any of the proposed “capping” models – something which has also featured prominently in the Court of Appeal decisions.
The Commission’s Paper looked at how the proposed legislation would potentially impinge on Constitutional rights. These include:
- The right to bodily integrity
- Property rights, including the right to access the courts and effective judicial remedies, and
- The right to equality before the law
The Commission noted that this type of legislation could be open to a constitutional challenge on the basis of proportionality but suggested that capping damages may be justified as proportionate by reference to, for example, the control of insurance premiums.
The Commission considered four potential legislative models:
1. Using a proportionality test when assessing damages, by reference to a scale
This is a similar concept to sentencing in the criminal courts within a context of statutory maximum and minimum sentences. This is also the model closest to the current operation of the informal scale discussed by the Court of Appeal. Legislation to introduce such a model would need to distinguish between types of injury and further break these types of injury into categories, similar to the Book of Quantum.
2. Imposing a cap on general damages, with awards indexed to the cap after an assessment by the court of the severity of the plaintiff’s injury
Once the court determines the severity of the injury, it would be required to award the corresponding percentage of the cap, akin to a tariff style system. This model is based on a combined system from England and Wales and New South Wales.
The New South Wales provisions additionally provide for a “judicial uplift” on awards, with room for judicial discretion. The Commission noted that such a provision in Irish legislation could run the risk of becoming the rule rather the exception.
3. Models 1 or 2 would be enacted but with the addition of a cap determined by a minister or appointed body
There is no suggestion in this model that there would be any judicial discretion allowed or any judicial input into the setting of the cap. The advantage highlighted here is that a minister can adapt to changes in social conditions. However this would appear to be the most constitutionally vulnerable proposal.
4. The courts would continue to determine the level of awards through case law, supplemented by the new provisions under the Personal Injuries Guidelines, as per the Judicial Council Act 2019
This is the proposal most similar to our current system.
The Commission is also open to submissions of alternative approaches including the use of periodic payment orders.
It remains to be seen which model, if any, finds favour but it is clear that there is a lot of work to do before a viable alternative to our current system emerges. The work of the Personal Injuries Guidelines Committee will be watched with keen interest as this will feed directly into any developments.
Whether a mandatory regime is implemented or judicial discretion is retained will be a topic of hot debate and one which will have to be carefully considered in light of constitutional concerns.
With the expected publication of the Personal Injuries Guidelines as well as the potential development of this new legislation for capping awards of damages, it looks like 2020 will be another eventful year in the personal injuries arena.
The Commission has invited submissions on its proposals and the closing date for receipt of same is 31 January 2020. For more information on the changing landscape of personal injury law in Ireland, contact a member of Insurance & Risk team.
The content of this article is provided for information purposes only and does not constitute legal or other advice.