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1 To: CORPORATE SERVICES COMMITTEE NORTH LANARKSHIRE COUNCIL REPORT Subjct: CONSULTATION: CIVIL LAW OF DAMAGES - ISSUES IN PERSONAL INJURY From: HEAD OF LEGAL SERVICES Dat: 30 JANUARY 2013 Rf: AL LE CSN 0001/CH I PURPOSE OF REPORT Th purpos of this rport is to sk Committ approval for th Council s rspons to th Scottish Govrnmnt s Consultation Papr on Civil Law of Damags: Issus in Prsonal Injury. A copy of th Consultation Papr is in th Mmbrs Library and furthr dtails ar availabl at Th closing dat for rsponss to th consultation is 15 March BACKGROUND Th Scottish Govrnmnt has givn a manifsto commitmnt to rform th law of damags. Damags for prsonal injury ar th amount of mony ngotiatd btwn pursurs and dfndrs, or awardd by th courts, to compnsat th pursur for th injury and loss suffrd as a rsult of th wrongdoing of th dfndr. Awards of damags ar not intndd to pnalis th dfndr. Thir purpos is, as far as possibl, to rstor th victim or his/hr family, to th position thy would hav bn in had th wrongful harm not occurrd. If a civil action for damags for prsonal injury is to b succssful vidnc nds to show that on th balanc of probabilitis: th injury and loss occurrd as statd by pursur; thr was a brach of a duty of car owd to a pursur; that brach of duty causd th prson ral harm; that harm was rasonably forsabl as a rsult of that brach; and th prson or ntity that faild to fulfil th duty of car bhavd dlibratly or ngligntly. It is also ncssary for a civil action for damags to b brought within a dfind priod of th prsonal injury coming to light. This priod, commonly calld tim bar, aims to strik an appropriat balanc btwn th rights of individuals who may wish to mak a claim for prsonal injury having a rasonabl opportunity to do so and on th othr hand, th protction of all individuals and organisations against opn-ndd civil liability. Th Consultation sks viws on th rform of th law on psychiatric injury, tim bar and issus rlating to th paymnt of damags A summary of th law in rlation to ach ara is st out blow.

2 2.2 PSYCHIATRIC INJURY Th xisting law in this ara is govrnd by common law; ruls that hav bn dvlopd by th courts ovr th past cntury. Ths ruls ar complx and widly considrd to b in nd of rform In July 2001, th Scottish Ministrs invitd th Scottish Law Commission to rviw th law and mak appropriat rcommndations for rform. Th Commission's Rport on Damags for Psychiatric lnjury was publishd in August In addition, th issu of psychiatric injury which ariss in rlation to th wrongfully-causd dath of a lovd on was addrssd in th Commission's Rport on Damags for Wrongful Dath, which was publishd in Sptmbr Th 2004 Rport idntifid th main dfcts in th prsnt common law ruls: 0 Victims ar dividd into two catgoris, primary victims and scondary victims. Typically primary victims ar thos dirctly involvd in th incidnt, whil scondary victims ar thos who s or larn of othrs bing killd or injurd. Th two catgoris hav diffrnt ruls for compnsation, yt th boundary btwn thm is unclar. 0 Whil, in gnral, liability ariss only if th injury to th victim is rasonably forsabl by th wrongdor, a primary victim may rcovr for an unforsabl psychiatric injury if som physical injury was forsabl but did not occur. Th Commission concludd that this approach is unduly wid and rcommndd that for mntal harm th wrongdor should b liabl only if h/sh forsaw, or could rasonably hav forsn, that th act was likly to caus a prson in th position of th victim to suffr such harm. 0 For scondary victims at last, compnsation is awardd only if thy hav suffrd a 'shock,' th suddn apprciation by sight or sound of a horrifying vnt, and thy mt th so-calld Alcock critria:- 1, thr is a clos ti of lov and affction btwn th scondary victim and th injurd prson; 2. th scondary victim was prsnt at th accidnt or at its immdiat aftrmath; and 3. th scondary victim's psychiatric injury was causd by dirct prcption of th accidnt or its immdiat aftrmath. 0 Additionally, scondary victims can rcovr only if thir psychiatric injuris wr forsabl in a prson of "ordinary fortitud" - a lgal construct that is difficult to valuat. 0 Rscurs ar tratd as primary rathr than scondary victims, howvr, thy may wll hav to hav fard for thir own safty. 2.3 PSYCHIATRIC INJURY CAUSED BY WRONGFUL DEATH Th Damags (Scotland) Act provids that bravd rlativs may sk damags from th wrongdor to compnsat for th wrongful dath of a rlativ. In som cass, howvr, th raction of bravd rlativs to a wrongful dath may go byond 'normal' distrss and involv th dvlopmnt of a psychiatric condition which rprsnts an injury in itslf In such cass, a qustion ariss as to what xtnt, if any, a rlativ's claim undr th Act may tak account of such a psychiatric injury without having to dmonstrat, as would

3 b rquird in othr circumstancs, that th wrongdor owd a duty of car to th injurd rlativ. Thr ar inconsistnt court dcisions on this point which ar rlvant to th intrprtation of th Act In its 2008 rport, th Scottish Law Commission concludd that in such circumstancs a rlativ should not b abl to claim undr th Damags (Scotland) Act 1976 as th Act's purpos was to provid damags for th rlativ's "grif and sorrow'' causd by th victim's dath; th motions ordinarily xprincd as a consqunc of th dath of a lovd on. Th Commission suggstd that in cass involving a rcognisd psychiatric injury, damags should b sought undr a sparat hading and a pursur would hav to stablish that th dfndr owd hr/him a duty of car - indpndnt from that owd to th dcasd - to prvnt th pursur sustaining mntal harm. This would only aris if th pursur was a primary victim of th dfndr's wrongful conduct or th Alcock critria wr satisfid Whn th issu was considrd by th Scottish Parliamnt's Justic Committ in 2010, during scrutiny of what bcam th Act, thr was conflicting vidnc. In its Stag 1 rport, th Committ did not fl it would b appropriat for th Parliamnt to mak a dcisiv choic btwn th conflicting court dcisions bfor it has bn possibl to nact any widr rform of th law of damags for psychiatric injury. Consquntly, th 2011 Act did not addrss this particular issu and th law was lft ssntially unchangd pnding ithr a dcisiv court ruling on th mattr or until th mattr could b addrssd by way of lgislation. 2.4 TIME BAR An action for damags in th civil courts for any form of prsonal injury must b raisd within th timfram st out in th Prscription and Limitation (Scotland) Act Prscription and limitation diffr in form and concpt but both hav th ffct of 'tim-barring' a claim PRESCRIPTION Prscription is th procss of acquiring or losing rights/obligations as a rsult of th passag of tim. Prscription may b both positiv and ngativ. An xampl of th formr would b nabling an individual who has possssd land opnly, pacably and without intrruption for 10 yars or mor to obtain a good titl to it. Ngativ prscription is a rul of substantiv law, which ntirly xtinguishs rights and associatd obligations. Thr is no judicial discrtion to st asid prscription Prior to 26 Sptmbr 1984, Scots law on prsonal injury providd that a right or obligation casd to xist if a claim had not bn mad within 20 yars. This mans that if an individual suffrd a prsonal injury prior to 26 Sptmbr 1964, th law of prscription applis and thy hav no right to bring a claim. If howvr th prsonal injury occurrd aftr 26 Sptmbr 1964, th law of prscription dos not apply and th individual may b abl to bring a claim, subjct to th law on limitation Thr has bn discussion as to whthr this rul should b abolishd. Th Law Commission rcommndd that it should not. Th Commission also considrd that a spcial catgory of claims in rspct of prsonal injury rsulting from institutional childhood abus which wr xtinguishd by ngativ prscription bfor 1984, and which would allow this catgory only to b rvivd, should not b cratd. 2.5 LIMITATION Limitation diffrs from prscription in that it is a procdural rul rathr than substantiv law. In rlation to prsonal injury actions thr is a 3-yar limitation priod. This gnrally mans that an individual has to bgin any prsonal injury action within 3 yars of th injury bing sustaind or within 3 yars of th individual knowing that th injury has bn sustaind. Limitation is not absolut in th sam way as prscription. Th courts hav som discrtion

4 to allow an action to b commncd aftr th 3 yar limitation has lapsd if thy considr that it would b quitabl to do so in trms of sction 19A of th Prscription and Limitation (Scotland) Act THE SUBSEQUENT EMERGENCE OF AN ADDITIONAL INJURY Th Commission proposd that if a claim for sufficintly srious injury is not pursud timously, th subsqunt mrgnc of additional injury, vn if distinct, should not giv ris to a frsh dat of knowldg and a furthr consquntial limitation priod for a claim for that additional injury. It is important to rcognis that th basic limitation priod rquirs to b qualifid to accommodat th diffrnt facts and circumstancs of potntial prsonal injury claims. For xampl, it is an stablishd fatur of th law that som allowanc should b mad for individuals who hav bn injurd but who lack th knowldg or th ability to initiat a claim. This is bcaus it would sm unjust if a potntial pursur with good grounds for a claim for damags for prsonal injury ran out of tim bcaus h/sh ithr lackd knowldg of th injury or lackd th ability to act on that knowldg Currntly, Scots law provids that unlss and until an injurd prson has knowldg of svrity of hidhr injury and of th caus of th injury and th idntity of th prson rsponsibl for wrongfully causing th injury, thr is no xpctation that h/sh should act to mak a claim and th limitation priod dos not bgin to run. Without such provision, th limitation priod would bgin to run from th dat that injury was inflictd and, for injuris which ar latnt and do not mrg until svral yars latr (.g. asbstos-rlatd conditions and som psychiatric conditions), th injurd party might bcom awar of th injury only aftr th limitation priod had xpird THE WIDER REFORM AGENDA In th past fiv yars, thr Acts of th Scottish Parliamnt hav mad significant provision in th ara of damags for prsonal injury. Th Consultation sks viws on th impact of th lgislation. Th Council dos not propos to commnt on this aspct of th papr. FUTURE LEGISLATIVE REFORMS DISCOUNT RATE Whn thr is an award of damags in rspct of a prsonal injury claim, it is gnrally paid as a lump sum. Th pursur thrfor rcivs, in on go, all th compnsation for futur loss of arnings tc, prhaps for many yars into th futur. As this sum may thn b invstd by th pursur, who would consquntly rciv additional intrst paymnts, thr would b th prospct of th pursur bing ovr-compnsatd unlss som countrvailing mchanism is in plac. Th mchanism that is in plac for this purpos is known as th 'discount rat' and is currntly st at 2.5%. Scottish Ministrs, jointly with th UK Govrnmnt and th Dpartmnt of Justic, Northrn Irland, ar now rviwing th currnt 2.5% rat and will publish a rspons in du cours. PERIODICAL PAYMENTS Givn that th pursur's long-trm futur losss and nds can rarly b known with crtainty, not only is thr is a risk that a lump sum award could undrstimat th pursur's futur rquirmnts but thr is th possibility that an award could ovrstimat actual rquirmnts and thrfor unfairly pnalis th dfndr. An altrnativ approach, which may hlp to mitigat such risks, is - through th mchanism of 'priodical paymnts' - to sprad paymnts ovr an xtndd priod. At prsnt, whr damags for prsonal injury ar payabl in Scotland, th courts may mak an ordr for priodical paymnts, only with th consnt of th partis involvd.

5 3. PROPOSALS FROM THE CONSULTATION PSYCHIATRIC INJURY 3.1.I Th rport concludd that th xisting common law ruls should b rplacd by a nw statutory schm. It will no longr b ncssary that th mntal harm is inducd by shock. Victims will no longr b classd as primary or scondary. All victims will b xpctd to b rsilint in th fac of th ordinary vicissituds of lif, damags will only b availabl for mntal harm causd by haring of or witnssing an incidnt if th partis had a clos rlationship and thr will b no liability for unintntional mntal harm if it was not rasonably forsabl, unlss it aros from anothr typ of harm.g. a physical injury for which thr is liability and th mntal harm was not too rmot. As an altrnativ to providing that a dfndr is not liabl if a prson of ordinary fortitud could hav copd with th vnt in qustion, th approach that was prfrrd by th Commission is to spcify that thr should b no liability if th mntal harm is of such a natur that a prson in th position of th victim could rasonably b xpctd to ndur it without sking rparation, whr for xampl, it rsults from th normal strsss or vicissituds of lif or of th typ of lif which that prson lads or bravmnts of a typ which prsons can rasonably xpct to suffr in th cours of thir livs. As wll as protcting dfndrs against liability whr psychiatric injury is not rasonably forsabl, th law has traditionally also xcludd liability whr th injurd prson was somwhat rmovd from th wrongdoing and th rsultant harm. Th Commission suggstd two xcptions to that rstriction:- I. 2. whr th victim was acting as a rscur in rlation to th incidnt. whr th victim had a clos rlationship with a prson injurd or killd, or at risk of bing killd or injurd, in th incidnt. TIME BAR Th Commission proposd that th tim limit in which a claim must b raisd should b xtndd for prsonal injury actions, from 3 yars to of 5 yars. A 5 yar limitd priod alrady applis to actions for dbt or damag to proprty. THE SUBSEQUENT EMERGENCE OF AN ADDITIONAL INJURY Th Commission proposd that if a claim for sufficintly srious injury is not pursud timously, th subsqunt mrgnc of additional injury, vn if distinct, should not giv ris to a frsh dat of knowldg and a furthr consquntial limitation priod for a claim for that additional injury. Viws ar sought on whthr this approach is in th intrsts of justic. INTEREST ON DAMAGES/ PERIODICAL PAYMENTS Th Commission proposd th cration of a statutory right to intrst throughout th priod from th dat whn th claimant loss th us of mony to which h/sh is ntitld. It was also proposd that intrst should run during th sam priod and at th sam rat rgardlss of whthr th claim is for paymnt of a contractual dbt, a non-contractual dbt or damags. Th rat of intrst would b st at a lvl which adquatly compnsats th claimant, rathr than on which punishs th dbtor for th lat paymnt. Viws ar sought on whthr thr would b mrit in rviwing th law rlating to intrst. Consults ar also askd whthr th law rlating priodical paymnts should b rviwd.

6 4. SUMMARY OF THE COUNCIL S RESPONSE TO THE CONSULTATION PAPER PSY CHI ATRlC INJURY Th Council rcogniss that th currnt common law systm is unsatisfactory and would wlcom rform in this ara. Givn th scop and natur of th proposd rforms, it is submittd that th introduction of a statutory framwork whrupon th procss of rform is opn to public scrutiny is appropriat. Th Council rcogniss that th concpt of ordinary fortitud is difficult to assss and should no longr b a considration in assssing whthr a victim should b abl to sk damags. Th Council agrs that an appropriat balanc btwn th right of an injurd prson to scur damags and th right of a dfndr to xpct a crtain lvl mntal rsilinc in individuals would b achivd by th rcommndd focus on th strsss or vicissituds of lif or of th typ of lif that prson lads. Th Council is of th viw that th currnt approach which provids that a prson who sustains mntal harm without physical harm may scur damags is too wid and lav dfndrs opn to claims from any numbr of pursurs. Th Council agrs that thr should b a gnral prohibition on obtaining damags for a mntal disordr whr th victim has sustaind that injury as a rsult of witnssing or larning of an incidnt, without bing involvd dirctly in it and that it is appropriat to xcpt rscurs and thos in a clos rlationship with th victim from th gnral prohibition on th basis that th class of prson would rquir to satisfy th vicissituds of lif critria. Th Council is of th viw that ths two xcptions strik th appropriat balanc btwn th right of an injurd prson to scur damags and th right of a dfndr to b protctd from unlimitd liability. It should not b possibl for a bravd rlativ to scur damags for psychiatric injury undr sction 4(3)(b) of th Act. Th Council would agr with th approach takn by Tmporary Judg F R MacDonald QC in Ross v Pryd and th rquirmnt for th pursur to stablish that a brach of duty of car xistd. Viws ar sought on th likly impact of implmnting th proposals. In first instanc it is likly that th proposals would lad to a highr volum of claims and litigatd cass, howvr, this would diminish as cas law bcam stablishd and would vntually lad to mor crtainty in this ara of law and, as a rsult, fwr litigatd cass. Th Council is not in a position to commnt on th likly ffcts of th proposals on groups with protctd charactristics. TIME BAR It is agrd that for all prsonal injuris, rgardlss of th natur and circumstancs of th prsonal injury - vn if it wr lawful to do so, it would not b advisabl to sk to rviv prscribd claims (i.. claims rlating to vnts bfor Sptmbr 1964). Th Council is of th viw that th rvival of prscribd claims would unfairly prjudic dfndrs on th basis that tstamntary and documntary vidnc of th dfndr s position at th tim of th incidnt is unlikly to xist Th Council dos not agr that th standard limitation priod should b raisd to 5 yars. Th Council blivs that it is for th courts to considr, on th vidnc put bfor thm, whthr it is quitabl to xtnd limitation priod. Notwithstanding, this position, if th priod of limitation is xtndd to 5 yars for raising prsonal injury actions, it is suggstd that s.19a of th 1973 Act should b rpald.

7 4.1.I 1 It is agrd that it is appropriat to hav a singl standard limitation priod for all typs of prsonal injury claim and that thr should b a statutory] non-xhaustiv list of mattrs rlvant to dtrmining whthr it would b quitabl for th courts to xrcis discrtion to allow an action to b brought out with th limitation priod. Th Council would b concrnd if th 5 yar limitation priod is adoptd givn th xtnsion of th potntial priod of liability. 4.1.I2 No furthr viws on potntial options for rforms byond thos proposd by th Scottish Law Commission hav bn givn by th Council. THE SUBSEQUENT EMERGENCE OF AN ADDITIONAL INJURY It is in th intrsts of justic that thr should b only on limitation priod following th discovry of a harmful act, during which all claims for damags for associatd injuris must b brought. Thr should b no xcptions to this principl. 4.1.I4 It is notd that th dcision on whthr or not to allow a claim falls within th discrtionary ambit of sction 19A of th 1973 Act and it is for th courts to strik a balanc btwn th rights of th pursur to litigat and th right of dfndrs to avoid opn ndd civil liability. INTEREST ON DAMAGES/PERIODICAL PAYMENTS Th Council is of th viw that thr would b mrit in rviwing th xisting approach. 5. CORPORATE CONSIDERATIONS 5.1.I In th first instanc] it is likly that th proposals rlating to psychiatric injury would lad to a highr volum of claims and litigatd cass, howvr, this would diminish as cas law bcam stablishd It is likly that th xtnsion of th 5 yar limitation priod would lad to a highr numbr of court actions and would xpos th Council to gratr risk in trms of dfnding claims. Th proposals may hav cost implications dpnding on srvics rcord rtntion procdurs. 6. RECOMMENDATIONS Th Committ is askd to approv th rport and th Council s draft rspons. For furthr information on plas contact Carn Hndry, Principal Solicitor on 01698