HARMONISATION OF PERSONAL INJURY LAW IN THE EU

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1 HARMONISATION OF PERSONAL INJURY LAW IN THE EU By Muhammed Haque He is a civil advocate with wide experience in the County Court, High Court and Court of Appeal. He has acted in arbitrations and adjudications, and represented clients in mediations. He practises in all areas of common law and commercial litigation, with an emphasis on technical disputes.. Academic lawyers have long been debating the prospect of harmonising personal injury law across the European Union. The first real step was taken in March 1975 when the Council of Europe adopted Resolution (75) 7, Compensation for physical injury or death. Since then the EU has assumed a common approach in several areas relating to personal injury. An example is the 4 th Motor Insurance Directive [1] giving road traffic victims a direct cause of action against insurers.

2 There is now fresh impetus for more inclusive and far-reaching legislation in this field. A Member of the European Parliament, Willi Rothley [2], has been seeking the introduction of a resolution in the Legal Affairs Committee of the European Parliament to standardise awards for personal injuries across the EU [3]. Given the potential implications of such a proposal, the Commission have funded an independent research group, PEOPIL [4], to produce a comparative study of personal injury law and litigation in Europe with views on possible future harmonisation [5]. The debate may seem remote to the practising personal injury lawyer, but any changes may well be extensive and could have a practical effect on day-to-day personal injury litigation. The Current Situation Those in favour of harmonisation have called the differences in the legal systems levels of damages awarded in different EU nations as a Tower of Babel of definitions and a lottery [6]. This is perhaps an overstatement, but it is clear that there are real differences in the process by which EU member states arrive at an award of damages. For instance many EU states have something approaching no-fault compensation for the victims of road traffic accidents [7]. Under the Loi Badinter in France the driver is deemed liable for all harm caused by his vehicle without any fault, and without any defence of contributory negligence [8] or even force majeure. There are also marked differences in the levels of award. A recent comparative study found that the range of damages in respect of the instantaneous death of a 20 year old legal secretary ranged from only funeral expenses (Finland) to 176,368 (Italy) [9]. Denmark operates a system of fixed maximum statutory awards. Limitation periods vary considerably. In Switzerland the limitation period is 1 year from the date of knowledge, in Luxembourg it is 30 years. There are also differences in the way costs are awarded. In Spain, for example, where cases settle outside court, lawyers fees are generally not recoverable. Even where costs are awarded in court, they are limited to one-third of damages. Any consideration of harmonisation must be seen against a background of a multiplicity of systems and laws, each with its own qualities and failings, and a natural reluctance of authorities to change. Why Harmonisation?

3 It is a legitimate question why countries should change their systems of personal injury compensation at all, when each seems to be functioning adequately. Isn t it simply change for change s sake? The rationale behind all harmonisation can be traced back to Cicero s ideal in De Republica for an everlasting and unalterable law to govern all nations for all time. This paradigm is common in the development of European legal systems, and was seen in the Roman precept of ius commune [10] and in the English Common Law. The achievement of harmonisation is indeed seen by some as a sufficient end in itself, and is also consistent with the EU aim of common standards of protection. To this end it is also important that some harmonisation has already taken place. The EU has introduced the Defective Products Directive [11], the Package Travel, Holidays and Tours Directive [12], the Framework Directive [13] (ensuring minimum standards in the working environment) and the Motor Insurance Directives. These have produced tangible benefits, beyond the attainment of an intellectual aspiration. These Directives have increased access to justice by introducing new remedies, have set up minimum standards of protection, and have levelled standards in the member states. The discussion is thus not so much whether harmonisation should take place, but whether, and to what extent, there should be EU intervention in the field of personal injury damages. What will be implications on personal injury law in the UK? The proposals forwarded by Herr Rothley MEP are for the application of a European Scale rating when assessing bodily injury. They are a clinical assessment of the degree of disability that any single injury will cause. Thus, for example, PTSD is rated as causing between 12% and 20% disability, the amputation of a big toe at 6% etc. The Annex to the draft Resolution makes clear that where there is more than one injury the overall rating is not necessarily the sum of individual ratings. No formula is given by an appeal is made to the medical assessor s clinical sense, his common sense and sense of reality [14]. Practitioners in the England and Wales will recognise some parallel with the Judicial Studies Board Guidelines. However the levels of damages indicated in the Guidelines are drawn from cases in which Judges have set damages historically based on the value society has attributed to specific injuries. If Willi Rothley s

4 resolution is adopted, personal injury lawyers in the UK will have to markedly re-adjust the way they assess injuries. However adapting to this change is not beyond the wit of most practitioners. The question is whether this is really the beginning of what may prove to be a steady stream of changes beyond general damages, and affecting causes of action, areas of recoverability, procedure, and the way courts deal with evidence. Although nothing so radical has yet been tabled, this is the ideological end to the jurist s quest for a new ius commune across the whole of the EU, and is the direction in which some academics (and politicians) wish the EU to develop. Is harmonisation of personal injury law currently realistic? The wider question of convergence of integration of substantive law involves a consideration of the political will of the member states to abrogate the domestic discretion in their own legal systems. As well as the harmonisation seen in the production of Directives concerning aspects of liability for personal injury law, the approach of the EU has been the standardisation of civil procedure, with emphasis of cross border litigation. Several proposals aimed at achieving this have already been adopted [15]. This has been a gradual process, and there does not seem to be the political appetite for a radical change at this stage. Harmonisation of the absolute levels of general damages also appears unlikely. To do so would be to disregard the inherent diversity in each member state arising from different standards of living, taxation and social security systems [16]. It would in effect be imposing a federal blanket over a patchwork quilt of systems, and would achieve relative inequality rather than relative uniformity. Furthermore it is arguable that there is no need for harmonisation of the level of general damages. Only a very small number of personal injury cases involve jurisdictional issues [17]. When taken together with the fact that the vast majority of all cases are relatively low-value and dealt with satisfactorily by the national systems [18], it would appear disproportionate to sanction European-level interference to remove the quantification general damages from the jurisdiction of the national courts. From a practical perspective there is also doubt about the legislative competence of the EU to harmonise substantive personal injury law by regulation. The PEOPIL study concluded that using Article 95 of the EC

5 Treaty the smooth function of the internal market for harmonising general damages was misconceived and inappropriate, and that there is not presently a sufficiently well established and common legal background to permit legislative intervention by European legislature in respect of specific detailed provision for categories of recoverable loss, methods of assessment (including criteria for medico-legal evaluation) and minimum levels of awards for general damages [19]. The Future Interestingly PEOPIL go on to state that the Charter of Fundamental Rights of the European Union, signed in December 2000, may lead to uniform civil rights, giving rise to a strong legal argument for the harmonisation of the protection of such rights in terms of the available compensatory remedy [20]. This document is presently only a political document, but the European Parliament and European Council plan to have it officially incorporated into the European Treaty, either as a new title on Fundamental Rights or as a protocol annexed to it. If successful, it will be the first time that the European Parliament becomes involved in a process which could result in a decision of a constitutional nature. The PEOPIL study rejects the proposals of Herr Rothley MEP. They recommend that member states should develop domestic personal injury law through comparative law. Harmonisation of minimum levels of damages will require its own time to allow the development of a suitable common legal background for future legislative intervention. For the moment it does not recommend the legislative harmonisation of personal injury law. It remains to be seen whether or not the views of PEOPIL are currently preferred to those of Willi Rothley MEP. The trend is for a gradual harmonisation of laws, and should this continue, it is probable that the political and economic conditions may well arise where a more radical approach is adopted. The impact of the Charter of Fundamental Rights may hasten the process of change. What is certain however is that should there be EU intervention in personal injury law, legal practitioners may well be faced with important changes to the system of personal injury compensation, which will affect domestic as well as cross-border litigation. MUHAMMED HAQUE February 2005

6 [1] Directive 2000/26/EC [2] Vice-President of the Justice Commission of the European Parliament [3] A draft of the report can be found at [4] Pan European Organization Of Personal Injury Lawyers [5] Personal Injury Compensation in Europe (Kluwer 2003). [6] Busnelli F.D. European perspectives of the Rationalization of Compensation for Non-economic Damage (2001) [7] France, Germany, Belgium, Italy, Spain, Holland, Austria, Switzerland [8] Unless the victim has deliberately caused the accident. [9] Personal Injury Awards in EU and EFTA Countries (Kluwer Law, 2003) [10] Common law [11] Directive 85/374/EEC [12] Directive 90/314/EEC [13] Directive 89/391/EEC [14] Annex Paragraph 15 [15] Proposal to improve access to justice in cross border disputes (COM/2000/0051); Regulation 1206/2001 on cooperation between the courts of the member states in taking of evidence in civil or commercial matters [16] This was the conclusion of the Green Paper on Compensation to crime victims (September 2001) COM (2001) 536 [17] PEOPIL estimate less than 1% [18] In the sense that the relative difference of award between the EU states for minor injuries is small [19] Section 3 [20] Chapter 4.1 This article was originally published in The Lawyer s Lawzone.

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