Michael Fleming, QBE Ireland, looks at how general damages in personal injuries cases have changed in line with the more difficult economic environment
By Michael Fleming Chartered Insurer, BA (Hons) LLB (Hons) ACII General damages are often the subject of great debate between claims personnel and the other stakeholders in an action. They are intended to compensate the plaintiff, not as a punishment or sanction against the defendant. There are a number of factors that are taken into account when considering the level of general damages to be awarded including but not exclusively limited to: • The nature of the injury • The severity of the injury • Duration of the disability and prognosis • Impact of the injury and any continuing disability on the plaintiff • The awareness of the plaintiff of his disability We have become very used to seeing very large personal injuries payouts reported in the press. By today’s standards, damages for personal injuries were relatively modest in the past – for example, in Doherty v Bowaters Irish Wall Board Mills Ltd (1968) the plaintiff ,a paraplegic, was awarded €127,445 of which €43,806 was general damages. In an unreported 2008 case a paraplegic was awarded €4.98m, of which approximately €300,000 are understood to have been general damages. So, like the cost of living and the standard of living, general damages awards in catastrophic personal injuries cases had been largely on an upward trajectory.
Much of the change was connected to the application of what became known as the Sinnott principles, following the landmark case Sinnott v Quinnsworth et al (1984) where the Supreme Court reduced general damages on appeal from just over €1m to €190,461, describing the original award as “lacking all sense of reality” and that it “bore no relation to the ordinary living standards of the country or to the income level of even the most comfortable and best off of the community.” Importantly, however, the court in awarding damages said that regard had to be given to future changes in living standards “having regard to contemporaneous standards and money values and I am conscious that there may be changes and alterations in future as we have seen in the past”. Against this backdrop, the increase in living standards in the 1990s led to rising general damages awards, but the Sinnott “cap” still held sway. By 2001, the Supreme Court felt it was time for reassessment and in McEneaney v Monaghan County Council, the Court, in light of the passage of time and the increase in such variables as the consumer price index and the average industrial wage; the suitable new yardstick for general damages in such a case was €300,000. At the same time, the Personal Injuries and Assessment Board’s Book of Quantum (2004) put the level of damages for the most serious injury also at €300,000. In M.N.v.S.M (2005), the Supreme Court agreed, overturned the High Court award of €600,000 and substituted the lesser award of €350,000. The court was satisfied that the equivalent figure at that time to the €190,461 of Sinnott was in excess of €300,000, stating that it was important
risk manager magazine spring 2011