Draft Government legislation on compensation
Gibraltar Government has published draft legislation that seeks to limit financial compensation for people who have suffered clinical negligence or personal injuries, in a move that has split opinion in the legal community. While some lawyers say the legislation will bring certainty to personal injury claims and reduce legal bills, others insist it could place vulnerable people at greater risk. At the heart of the discussion is the Bill for a Damages Act 2018, which was published earlier this week. The Bill, once approved by Parliament, would set lower limits on pay-outs for damages than has been the case in recent decisions of the Supreme Court.
The proposed legislation also affects the rate of return to be expected from the investment of a sum awarded as damages for future financial loss in an action for personal injury. The Bill was published in the wake of two Supreme Court decisions that questioned whether the ‘English method’ of assessing the value of personal injury claims should apply to Gibraltar.
Former Puisne Judge Adrian Jack had determined in two separate cases in relation to the assessment of general damages that the English guidelines were not appropriate for Gibraltar. The judge found that the English guidelines were too low for the “particular circumstances of Gibraltar” and that the Supreme Court should instead follow the Northern Irish guidelines, which allowed for bigger payments.
The difference is potentially significant.
Under the Northern Irish guidelines, a claimant suffering personal injuries and leaving him tetraplegic could have expected to obtain an award for general damages of between £400,000 and £575,000. Under the English guidelines, the same injury would attract an award of between £258,740 and £322,060.
The Government’s proposals were simultaneously welcomed and criticised by legal practitioners in Gibraltar yesterday. Those against the move said the proposals would limit compensation available to injured persons to the benefit of insurers.
Justin Phillips, a Partner at Phillips barristers and solicitors who specialises in catastrophic injury cases, said: “It’s unfortunate that the Government is proposing to pass legislation which would seek to limit the compensation available to an injured party.”
“These changes will place vulnerable people who have suffered catastrophic injuries and who need full time care at greatest risk.”
“This will of course have a huge impact upon their families, friends and our society in general.”
“It is unclear what has prompted the Government to proceed along this course, where the only identifiable losers are the people in Gibraltar who have suffered serious injury through no fault of their own.”
On the other hand, one of Gibraltar’s largest law firm’s – Isolas – said the proposed Damages Act 2018 will give some “long-awaited certainty” for those defending personal injury claims, in particular insurers.
In an article, Danielle Victor, an Associate in Isolas’ Litigation department, said the recent Supreme Court decisions had instigated a period of “unwanted uncertainty” as they did not allow defendant insurers and their legal advisors to accurately assess the level of expected damages that may be awarded by the Court.
That, in turn, often led to lengthy litigation and higher legal costs.
“In practical terms, the uncertainty has meant that both sides have taken opposing positions on this question – to their respective clients’ advantage- and thereby leaving a gaping hole between the parties’ respective positions,” she wrote. “This consequently meant that the prospects of an early out of court settlement greatly diminished or, where a settlement was achieved, this was done via a sometimes unsatisfactory ‘meet in the middle’ approach leaving insurers potentially over-paying on these claims as a result. The inevitable implication has been that legal costs have dramatically escalated – arguably disproportionally- due to the need to litigate these issues as part of the overall litigation process which necessarily required costly expert economic and/or actuarial evidence to be obtained.”
With the draft legislation now published, the debate is set to gather speed before the Bill is debated in Parliament in the coming weeks.
GSD Leader Keith Azopardi told the Chronicle that he and the party’s MPs would consider the implications of the Bill and comment publicly on the matter in the coming days.
Yesterday the Gibraltar Bar Council declined to comment publicly on the issue. However the Chronicle understands that the divergence of opinion within the legal community will be reflected in any submissions from the Bar to the government on its proposal.
The Gibraltar Government is expected to make a statement on the proposed legislation in the coming days but yesterday declined to comment.
Credit Gibraltar Chronicle written by Christina Cavilla