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Civil Law of Damages: Issues in Personal Injury - A Consultation Paper

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1. Introduction

"Awards of damages are compensatory in nature, not punitive: the aim is to put the victim - or his family - in the position in which he would have been had he not been injured, so far as money can achieve this"
Scottish Law Commission, Report on Damages for Wrongful Death (September 2008)

Background

1.01 The Scottish Government has given a manifesto commitment to "reform the law of damages''. Damages for personal injury are the amount of money negotiated between pursuers and defenders, or awarded by the courts, to compensate the pursuer for the injury and loss suffered as a result of the wrongdoing of the defender.

1.02 Awards of damages are not intended to penalise the defender. Their purpose is, as far as possible, to restore the victim or his/her family, to the position they would have been in had the wrongful harm not occurred (restitutio in integrum).

1.03 If a civil action for damages for personal injury is to be successful - and aside from the practical question of whether the wrongdoer has the means to pay any award, either directly (e.g. with his/her own assets) or indirectly (e.g. through the existence of a relevant insurance policy) - evidence needs to demonstrate on the balance of probabilities that:

  • there was a breach of a duty of care owed to a person;
  • that breach of duty caused the person real harm;
  • that harm was reasonably foreseeable as a result of that breach; and
  • the person or entity that failed to fulfil the duty of care behaved deliberately or negligently (i.e. the behaviour fell below the standard expected of a reasonable person).

1.04 It is also necessary for a civil action for damages to be brought within a defined period of the personal injury coming to light. This period, commonly called "time-bar", is set out in the Prescription and Limitation (Scotland) Act 1973. The period aims[1] to strike an appropriate balance between the rights of individuals who may wish to make a claim for personal injury having a reasonable opportunity to do so and on the other hand, the protection of all individuals and organisations against open-ended civil liability.

Aim

1.05 It is important that our civil law keeps pace with modern life and delivers justice as efficiently and effectively as possible. The broad principle underlying this consultation is that the law on key aspects of damages for personal injury should be modernised and simplified, particularly with regard to the criteria determining eligibility to make a claim for damages and also the timescales within which a claim should be made.

1.06 The consultation seeks views on what the Government's approach should be on aspects of:

  • the Scottish Law Commission's (the Commission) proposals for reform of the law on damages for psychiatric injury as outlined in Chapter 2;
  • the Commission's proposals for reform of the law on prescription and limitation (also known as "time bar") for actions for personal injury (both psychiatric and physical) as outlined in Chapter 3.
  • a range of related issues such as the Discount Rate; Interest on Damages and Periodical Payments as outlined in Chapter 4.

1.07 The proposals in Chapters 2 and 3 come from a series of three reports, with recommendations for reform and draft legislation, published by the Commission on different aspects of the law on civil actions relating to damages for personal injury. One report - on Damages for Wrongful Death[2] - has in large part already been implemented, following earlier consultation, through the Damages (Scotland) Act 2011. Along with one outstanding matter from that report, issues from the other two reports - on Damages for Psychiatric Injury[3] and on Personal Injury Actions: Limitation and Prescribed Claims[4] - are now the subject of this consultation.

Further Policy Development

1.08 The Government takes the view that, in principle, there could be merit in legislating along the broad lines suggested by the Commission in these reports. Therefore, subject to the views of consultees on detailed aspects, the Government anticipates legislating in the Scottish Parliament in the current session (2011-2016) to reform the law on damages for psychiatric injury and the law on limitation.

1.09 Further examination of some detailed aspects of the new provisions proposed by the Commission reports is necessary, because:

  • a number of stakeholders have expressed concerns in relation to some particular aspects of the recommendations; and
  • since the reports were published, there have been developments - for example, in the judicial and legislative spheres - which may well be of relevance to consideration of the issues.

1.10 It is important to ensure that any resulting legislation is robust and durable, with no unintended consequences and that it takes account of all relevant perspectives, including equalities considerations and any potential financial and regulatory implications.

1.11 This paper does not seek to repeat the detailed consideration of all aspects of the Commission reports, but is restricted to exploring and seeking views from consultees on specific points and also seeks views on whether the proposals for reform will meet the Scottish Government's intent of modernising the law of damages for psychiatric injury and the law of limitation to reflect modern day society. Responses to the consultation will inform the development of legislative proposals. Readers are directed to the relevant Commission discussion paper, report and draft legislation for information in more depth on the development of the Commission's proposals.

1.12 In addition, as part of the consultation process, we hope to be able to gather information to enable us to assess the impact and costs of implementing any of the proposals, or indeed of not doing so, from the perspective of a range of interests. Previous experience in this area has revealed that such information can be difficult to access.

1.13 As regards psychiatric injury, the Commission's 2004 report stated that "our recommendations have been framed with the intention of not increasing liability to any substantial extent.... Overall, we expect the effects of our recommendations to be fairly neutral." The Commission did not venture an assessment of the potential implications for liability of the recommendations in its 2007 and 2008 reports.

1.14 It is important that we produce as robust financial and other impact assessments as possible if, following consultation, we are to take forward legislation. The Financial Memorandum etc will be subject to close scrutiny by the Scottish Parliament.

1.15 At a number of points throughout the paper there will be broadly framed questions seeking responses on the costs and benefits/drawbacks of implementing the proposals. It would be extremely helpful if you could consider these questions and respond (with an explanation) in so far as it is possible for you to do so, drawing on specific evidence and/or wider knowledge, experience and expertise.