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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.
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