The Gazette 1984

INCORPORATED LAW SOCIETY OF IRELAND GAZETTE Vol. 78 No. 6 July/August 1984 Personal Injury Claims

I N a series of recent cases, the Supreme Court has laid down significant new guide lines for use in serious personal injury cases coming before the courts. In paraplegic or quadriplegic cases the Court has cast doubt on the previously sacrosanct assumption that the injured party would have looked forward to continuous employment to retiring age. The question of how the actuary is to view the prospective rate of inflation has also come under scrutiny. In two significant cases, the Supreme Court has made substantial reductions in awards made by High Court juries in paraplegic cases. The decisions have been criticized on two grounds, firstly, that the Supreme Court should substitute its verdict for that of a jury in relation to damages; and. secondly, that the amounts of these reduced compare unfavourably with recent levels of jury awards for lesser injuries, e.g., the loss of a leg or an arm which have gone unchallenged. In truth, what the Courts are trying to do is bordering on the impossible. Our legal system, in company with all others in Western Countries, has found no other satisfactory method of compensating people for serious personal injury other than by monetary payments. In the case of those who have been so seriously injured that they will never be able to live a normal life our system awards a sum not merely to compensate them for future loss of earnings but to meet the costs of such special care as they may need for the rest of their lives. Just how unsatisfactory the system has become is slowly becoming apparent. There has always been an odd contrast between the level of sophisticated talent which is assembled to ensure that the plaintiffs case is won and the amount of the damages maximized and the fact that, following the award, an unsophisticated person with little experience in the handling of large sums of money is, when perhaps severely impaired by his injuries, presented with a large sum of money which he is supposed to invest so as to provide for all his future needs. There is some evidence admittedly anecdotal, which suggests that

the recipients of such awards are preyed on by greedy members of their family. A study of the effects of high awards in these cases could usefully be made. Perhaps we should look at recent trends in the U.S. where there has been a remarkable growth in what are known as structured settlements from some 3,000 in 1979 to over 15,000 in 1983. Structured settlements involve the payment of a series of insurance-based future payments, rather than a lump sum to a successful plaintiff. The payments typically consist of an initial lump sum to cover medical and other pre-trial expenses, followed by a series of annual payments. These arrangements differ from the old workman's compensation-type series of payments, which older readers will recall with no great affection, in that they are not paid out by the defendant's general insurance company but are in the form of annuities purchased by that company from a life assurance company, on the basis of the age and sex and, in some cases, the medical prognosis of the plaintiff. Some protection against inflation can be obtained, perhaps not enough to equal the levels of the actual inflation that has been present in Ireland for the last 10 years, but then what investment would have provided a hedge against such inflation and still generated a reasonable income? Provision can also be made to ensure that the annual payments are guaranteed for a number of years, rather than ceasing on the death of the injured party. The introduction of such a scheme deserves serious consideration. If it were to be adopted it might create a climate in which, in cases where liability is not in issue, plaintiffs could be entitled to receive regular payments from the defendant's insurers in advance of the deter- mination of their full liability. This would naturally be of considerable benefit to plaintiffs who have incurred substantial losses or debts pending the completion of their claim and would leave the bargaining positions of plaintiff and defendant much more even. Even if such further developments are speculative, it is surely time to give consideration to a more sensible method for the future of compensating people who have suffered serious injuries than our present crude system. •