Civil Law of Damages: Issues in Personal Injury - Analysis of Written Consultation Responses

5. Recent Legislative Reform

Rights of Relatives to Damages (Mesothelioma) (Scotland) Act 2007^[15]

5.1 The 2007 Act, which came into force on 27 April 2007, had the central aim of ensuring that - as an exception to the normal rule - a person dying of mesothelioma could secure damages without thereby preventing members of his/her immediate family making a future claim for damages for distress, grief and loss of society.

5.2 The legislation was introduced in September 2006 by the then Scottish Executive following a consultation exercise in July-August 2006, which itself followed expressions of concern in Parliament about the dilemma faced by mesothelioma sufferers, i.e. that they could pursue a claim for damages on their own behalf only if they were prepared to accept the consequence that their immediate families would not thereafter be able to pursue claims for

damages for emotional harm. The Commission subsequently

recommended, in the report on Damages for Wrongful Death (2008), that where a victim dies of mesothelioma, his relatives should retain title to sue for non-patrimonial loss, although the victim has excluded or discharged liability before his death, in accordance with the 2007 Act.

5.3 At the time it was enacted, the overall financial implications of the 2007 Act were predicted to be relatively limited. That was the view of the Scottish Executive and, after taking evidence, had also been the conclusion of Parliament's Justice 1 Committee in its report at Stage 1.

5.4 The consultation asked:

Q4a) Do you consider that the way in which the 2007 Act is working in practice is achieving its central aim of ensuring that a person dying of mesothelioma can secure damages without thereby preventing members of his/her immediate family making a future claim for damages for distress, grief and loss of society?

5.5 All 18 respondents (40% of respondents who provided a view) agreed that the 2007 Act is achieving its central aim. Those providing a view included nine insurance bodies, four legal body representatives, three solicitor firms, one academic and one representative of historic child abuse. A few of these respondents explained that they did not have direct knowledge to support their response, but their understanding was that this was the case.

5.6 It was generally recognised that the 2007 Act had the effect of creating certainty amongst mesothelioma sufferers that not only can their own compensation claim be resolved in their lifetime, but also their family's claim can be resolved posthumously. One remark (Ins) was that the 2007 Act has brought consistency with the position in England.

5.7 A common theme amongst insurance bodies was that although the 2007 Act is achieving its central aim, it could be argued that it is not necessary on account of the existing interim damages provisions, which they considered could achieve the same outcome.

5.8 The consultation asked:

Q4b) Do you consider that the way in which the 2007 Act is working in practice is having positive or negative impacts/side-effects?

5.9 Only 13 respondents (29% of all respondents) addressed Q4b). Of these, six considered there to be positive impacts; six considered that there were neither positive nor negative impacts; and one perceived the impact to be negative.

5.10 Positive side-effects were described as:

• swifter settlement of claims (Sol, Sol, Ins)
• earlier disclosure of information in support of claims (Sol, Ins)
• removal of the "almost impossible decision" for a sufferer over whether to raise proceedings whilst alive or wait to allow their family to raise a claim following their death (Sol, Ins)
• settlement of some family claims in addition to the victim's claim, during the victim's life (some insurers were reported as offering to settle the family claims at the time of the sufferer's settlement) (Sol).

5.11 Those describing the effects as neither positive nor negative were five insurance bodies and one representative legal body, with some presenting the underlying argument that the legislation was not necessary in the first place.

5.12 One academic argued against the 2007 Act on the grounds that the Act extends the liability too far and creates an exception to the "once and for all" principle. According to this respondent, earlier discharge of liability should not allow subsequent claims.

5.13 The consultation asked:

Q4c) Do you consider that the Scottish Government's financial estimates were largely accurate, insofar as they forecast:

i) the number of additional claims?

ii) the average level of costs associated with those additional claims?

iii) the overall financial implications of the 2007 Act?

5.14 Only five respondents provided a response to these questions. Others stated that it was too early for evidence-based comments, with little data available on which to assess impact. One insurance body remarked that the Act was working within a wider context of legislative reform, and as such, it was difficult to isolate its specific impact.

5.15 One respondent's view was that:

"The Scottish government's estimates were considered to fall primarily on business and the State. There was no breakdown or attribution to Scottish Court Service costs and the consultation paper makes no mention of estimates with regard to the number of additional claims or associated costs" (The Judges of the Court of Session).

5.16 Of the five respondents who addressed the questions, only one (Sol) considered that the Government's estimates were largely accurate in respect of the number of additional claims forecast. All of the other respondents (Ins, Ins, Acad, Sol) assessed the forecasts to underplay the number of additional claims, the average level of associated costs and the overall financial implications of the Act.

5.17 One solicitor firm referred to Health and Safety Executive information which predicted a peak in the number of claims from men in 2016, and from women even later than this. The latest judicial decision was referred to (Elizabeth Wolff & Others -v- John Moulds (Kilmarnock) Ltd & Weir Construction Ltd [2011] CSOH 159) by two respondents (Ins, Sol) to support their view that the average family claim will be higher than predicted by the Scottish Government.

Damages (Asbestos-related Conditions) (Scotland) Act 2009^[16]

5.18 The 2009 Act, which came into force on 17 June 2009^[17], had the central aim of ensuring that - notwithstanding a House of Lords ruling in October 2007 - certain asymptomatic asbestos-related conditions (such as pleural plaques) are recognised in Scots law as constituting actionable harm for the purposes of an action of damages, rather than being considered to be negligible.

5.19 At the time that it was enacted, the overall financial implications of the 2009 Act were difficult to forecast with accuracy. Revised estimates produced in February 2009, utilised a range of assumptions, with the Scottish Government concluding tentatively that by 2015 the annual cost could be:

• between £5.8m and £16.6m for business
• between £0.7m and £1.0m for local authorities
• between £0.5m and £0.8m for the Department of Business, Enterprise and Regulatory Reform
• between £0.3m and £0.4m for the Ministry of Defence
• between £0.1m and £0.2m for the Scottish Court Service

5.20 The consultation asked:

Q4d) Do you consider that the way in which the 2009 Act is working in practice is achieving its central aim of ensuring that a person with pleural plaques (or one of the other specified asymptomatic asbestos-related conditions) may pursue an action of damages in the same way as a person with any other non-negligible personal injury?

5.21 Sixteen respondents (36% of all respondents) addressed this question. Of these, fifteen (94%) agreed that the 2009 Act is achieving its central aim. Despite considering that the Act is working in practice, several insurance bodies highlighted their continued opposition to the introduction of the Act on grounds that:

Plaques are symptomless as established by unanimous medical evidence and do not cause asbestos-related conditions, such as mesothelioma.

The Act retrospectively overturned a fundamental legal principle of UK law, and the considered view of the highest court in the UK - that compensation is payable only when a claimant has suffered physical harm as a result of someone's negligence.

The Scottish Government is now out of step with most countries, including the US and Australia, in compensating pleural plaques.

5.22 The consultation asked:

Q4e) Do you consider that the way in which the 2009 Act is working in practice is having positive or negative impacts/side-effects?

5.23 Seventeen respondents (38% of all respondents) addressed Q4e). Of these, three highlighted positive impacts only; nine highlighted negative impacts only; four identified both positive and negative impacts; and one was undecided on the balance of impacts.

5.24 Positive impacts were described as:

• opening up justice to claimants who had previously been unable to access this (Rep CA, Acad)
• widening the scope of justice to encompass claimants with a "fear for the future" (Sol, Acad)
• creation of a framework for agreement (Leg Rep)
• forcing a pragmatic approach which has fostered a degree of cooperation on "both sides" which was not present before the Act (Ins).

5.25 Negative or unintended impacts were described as:

• the majority of claims not being settled on a provisional basis (as had been expected), but settling on a full and final basis, barring any future claim in the event of the subsequent development of any serious asbestos-related condition ("statute barred") (6 mentions)
• s.4(2) of the Act along with the Aitchison decision having the consequence of enabling a time-bar plea to be taken against people who have not previously considered pleural plaques as sufficiently serious to justify court proceedings ("time-barred") (4 mentions)
• not all pursuer solicitors are working to an agreed framework and agreed framework costs and expenses (Sol, Ins)
• having to be funded by insurers (Leg Rep)
• extending liability for psychiatric injury too far (Acad)
• otherwise healthy people are subjecting themselves to exposure to X-rays and CT scans to investigate whether they have pleural plaques (Ins).

5.26 The consultation asked:

Q4f) Do you consider that the Scottish Government's financial estimates were largely accurate, insofar as they forecast:

i) the number of claims?

ii) the average level of costs associated with those claims?

iii) the overall financial implications of the 2009 Act?

5.27 Of the nine respondents (20% of all respondents) who addressed these questions, most stated that it is too early to assess the accuracy of the Government's financial estimates. One (Ins) suggested that this is re-visited in 12 - 18 months time.

5.28 One respondent (Sol) estimated that the success rate for claims could rise above the 75% to 80% predicted. Two respondents (Sol, Leg Rep) considered that the average cost per case has been significantly over-estimated.

Damages (Scotland) Act 2011^[18]

5.29 The 2011 Act, which came into force on 7 July 2011, had the central aim of bringing greater clarity and accuracy to Scots law so far as it relates to damages for fatal personal injuries, reducing requirements for potentially intrusive, protracted and costly investigations, and thereby facilitating the swift and fair settlement of claims.

5.30 The legislation was introduced in June 2010 as a Members Bill, following consultation undertaken in 2009, and took forward recommendations made by the Commission in their report Damages for Wrongful Death (2008). The Scottish Government supported the legislation and, taking account of representations, promoted amendments as it went through Parliament. As enacted, the legislation's key innovations included:

a) In relation to a victim's claim for future patrimonial loss, standardising the calculation of his/her reasonable living expenses at 25% of his/her projected future net income in all cases (unless doing so would produce a manifestly and materially unfair result).

b) In relation to a relative's claim for loss of financial support (where the relatives include a spouse, civil partner, cohabitant or dependent child), standardising the calculation of the total loss of support at 75% of the deceased's projected future net income in all cases (unless doing so would produce a manifestly and materially unfair result).

c) In relation to a relative's claim for loss of financial support, requiring that any multiplier is applied from the date of the interlocutor (rather than the date of death) and only in respect of future loss of support.

5.31 The consultation asked:

Q4g) Do you consider that the way in which the 2011 Act is working in practice is achieving its central aim of bringing greater clarity and accuracy to Scots law so far as it relates to damages for fatal personal injuries, reducing requirements for potentially intrusive, protracted and costly investigations, and thereby facilitating the swift and fair settlement of claims?

5.32 Nineteen respondents (42% of all respondents) addressed this question. Of these, fourteen (twelve were insurance bodies) did not consider that the 2011 Act is achieving its central aim. The remaining five respondents considered that the central aim was being achieved.

5.33 Amongst those who considered that the aim was not being met were respondents who stated that they had opposed the provisions from the start. Others qualified their view by explaining that it may as yet be too early to give a definitive answer.

5.34 Amongst the five respondents (Rep CA, Leg Rep, Leg Rep, Acad, Sol) who thought the central aim was being achieved, one commented:

"We understand that parties are finding the Act easy to operate in practice, which is facilitating agreement and settlement" (Society of Solicitor Advocates).

5.35 The consultation asked:

Q4h) Do you consider that the way in which the 2011 Act is working in practice is having positive or negative impacts/side-effects?

5.36 Twenty one respondents (47% of all respondents) addressed this question as follows:

Table 23: Summary of views on whether the 2011 Act is having positive or negative impacts/side-effects

	No.	%
Positive impacts only	4	19
Negative impacts only	12	57
Both positive and negative impacts	2	10
Too early to say	2	10
Nothing unforeseen	1	5
Total	21	100

NB Percentages do not add to 100% exactly due to rounding.

5.37 The majority of those providing a view highlighted negative impacts associated with the 2011 Act. These are summarised below:

• lack of clarity due to the decision to remove the deduction of surviving spousal income (10 insurance bodies)
• lack of clarity over what constitutes 'manifestly unfair' when considering the 75% dependency base figure (10 insurance bodies)
• delays in settlements of cases without intrusive, protracted and costly investigations (10 insurance bodies)
• passing on of increased insurance costs to consumers in their insurance premiums (7 insurance bodies)
• inflexibility ("blanket approach") to calculating claims despite widely different family circumstances resulting in lack of fairness and accuracy (Ins, Ins, Ins, Leg Rep, Sol)
• multipliers applying from the date of interlocutor, rather than the traditional date of death (Ins)
• lack of consistency with the rest of the UK (Ins)
• no obvious reduction in the time taken to settle claims (Ins).

5.38 The positive impacts identified included:

• reduction in intrusive, protracted and costly investigations (Rep CA, Leg Rep, Sol)
• introduction of a sensible and fair method for calculating claims (Sol, Leg Rep, Acad)
• for claimants an increase in lost years/loss of support element (Sol, Leg Rep)
• injection of clarity and accuracy which has reduced the scope for disagreement between parties (Sol, Leg Rep)
• providing for loss of personal services in fatal and loss of expectation cases (in terms of the Administration of Justice Act 1982) (Acad)
• allowing the transmission of the rights of the deceased to the executor (Acad)
• extending the definition of an 'immediate family' (and the inclusion of half-blood relatives for the purposes of the loss to society) (Acad).

5.39 The consultation asked:

Q4i) Do you consider that the Scottish Government's financial estimates were largely accurate, insofar as they forecast:

i) the impact on the number of claims?

ii) the level of award in respect of those claims?

iii) the overall financial implications of the 2011 Act?

5.40 Seventeen respondents (38% of all respondents) addressed these questions. Insurance bodies were generally of the opinion that the forecasts made by the Scottish Government were not robust in that they were derived from an analysis of data from only one firm of solicitors. Furthermore, no information was provided to show the breakdown of the types of claims from which the data was obtained (e.g. road traffic accident fatalities; workplace fatalities; or long tail conditions such as mesothelioma). Such a breakdown, it was claimed, would have helped respondents to better understand the estimates and how they were compiled. Several suggested that more informed analysis is undertaken using data from the records of several different solicitor firms.

5.41 The majority view (largely amongst insurance bodies) was that all of the financial estimates were inaccurate, with the financial implications of the 2011 Act much greater than predicted.

5.42 Four respondents (Sol, Sol, Leg Rep, Ind-Pub) considered the Government's expectation of negligible impact on number of claims to be accurate. Three (Sol, Sol, Ind-Pub) concurred with the Government's prediction of an increased level of award.

Summary of views

5.43 Of the 18 respondents who provided a view all agreed that the 2007 Act is achieving its central aim of ensuring that a person dying of mesothelioma can secure damages without thereby preventing members of his/her immediate family making a future claim.

5.44 The 2007 Act was viewed largely as producing positive impacts such as a swifter settlement of claims, helped by the earlier disclosure of information in support of claims.

5.45 Of the 16 respondents who provided a view, 15 agreed that the 2009 Act is achieving its central aim of ensuring that a person with pleural plaques (or one of the other specified asymptomatic asbestos-related conditions) may pursue an action of damages in the same way as a person with any other non-negligible personal injury.

5.46 The most significant positive impact of the 2009 Act was described as opening up justice to claimants previously unable to access this, and widening the scope of justice to encompass claimants with a "fear of the future". The most commonly cited unintended consequence was highlighted as claims tending to be settled on a full and final basis, rather than on a provisional basis as had been expected. This resulted in barring any subsequent claims in the event of serious asbestos-related conditions developing.

5.47 In general, respondents felt that it was too early to assess the extent to which the Scottish Government's financial estimates were accurate regarding the number of additional claims, the average level of costs associated with these and the overall financial implications of the 2007 or the 2009 Acts.

5.48 The majority (14 respondents) of the 19 respondents who expressed a view did not consider that the 2011 Act is achieving its central aim of bringing greater clarity and accuracy to Scots law, so far as it relates to damages for fatal personal injuries, reducing requirements for potentially intrusive, protracted and costly investigations, and thereby facilitating the swift and fair settlement of claims.

5.49 The majority of those who commented highlighted negative impacts associated with the 2011 Act. In particular, insurance bodies considered there to be a lack of clarity due to the decision to remove the deduction of the surviving spousal income; ambiguity over what constitutes "manifestly unfair"; and knock-on delays in settlements of cases.

5.50 The majority view, largely amongst insurance bodies, was that all of the Scottish Government's financial estimates relating to the 2011 Act were inaccurate, with the financial implications much greater than predicted. However, it was generally agreed that more informed assessment should be based on data from the records of several different solicitor firms.