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BERNAL v RILEYThe New Measure of Damages for Personal Injury in Gibraltar
A landmark judgment by the Hon. Mr Justice Jack has found the method of assessment of general damages for personal injuries in Gibraltar to be unsuitable for the jurisdiction. The case of Michael Bernal v Samuel Riley (16 September 2016, unreported as yet) has held that the current method of assessment based on the method followed in England & Wales, including the applicability of the Judicial College Guidelines (“Guidelines”), needs to be modified to the circumstances of Gibraltar. In the meantime, it has been held that the Courts of Gibraltar should apply the equivalent Northern Irish Guidelines.
The Case
The Claimant was a passenger in a car that was rear-ended by the Defendant’s vehicle in a road traffic accident on 6 May 2016. The Claimant suffered a neck injury from which he continued to suffer intermittent pain at the date of judgment. His life was also much less active. The Defendant did not file an acknowledgment of service and judgment for damages to be assessed was entered against him on 9 August 2016. The Defendant did not appear and was not represented during the assessment of damages.
The Issues
Whilst the learned Judge noted that the practice in Gibraltar was to follow the Guidelines for England and Wales, he questioned whether this was appropriate in Gibraltar for four reasons:
1. The economy and standard of living in Gibraltar is very different to that of England & Wales;
2. The increase in general damages in England & Wales by 10% for all cases decided after 1 April 2013 (excepting those with a CFA entered into before that date) following the decision in Simmons v Castle [2012] EWCA Civ 1039 may not apply to Gibraltar;
3. The impact of the reduction in the discount rate for future losses on assessment of general damages for future PSLA has not yet been taken into account in England & Wales; and
4. Where there are serious cases with long-term sequelae, there must be a reasonable comparison with general damages for other torts.
It was found that:
1. Gibraltar’s Economy:
• Damagesneedtobeappropriateforlocalconditions.
• Changes in the economic circumstances of a particular jurisdiction mean that the quantum of general damages in particular stand to be reassessed.
• ThevalueofmoneyisnotnecessarilytobedeterminedbyreferencetosterlingadjustedbyanindexsuchastheRPI. Consideration must be given to the relative real value of money.
• JudicialnoticewastakenofthefactthatthestandardoflivinginGibraltarishigherthanthatofEngland&Wales.
• Gibraltar’sGDPwas£53,361percapita for2015/16,whereas itwas£28,714percapita in theUnitedKingdom for the same period.
• GDPisgenerallyconsideredthebestoverallmeasureofprosperitybutwageswillalsoberelevant.
2. Simmons v Castle Uplift:
• Following thedecision inSimmons vCastlegeneral damages forPSLA, nuisance,defamationandall other tortswhich cause suffering, inconvenience or distress to individuals were increased by 10% for all cases decided after 1 April 2013, except for cases funded by a CFA entered into before then. This was to compensate for the loss of the recoverability of CFAsuccessfeesandATEpremiumsfurthertotheLegalAid,SentencingandPunishmentofOffendersAct2012(UK).
• AnATEpremiumisstillrecoverableinGibraltar.
• It is unclear whether the UK legislative changes have any effect on the decision of Schofield CJ in Re an Application to the Chief Justice pursuant to the Supreme Court Rules, Rule 2 2001-02 Gib LR 329, and whether CFA uplifts are still recoverable in Gibraltar. No determination was made in the absence of adversarial argument.
• In any event the level of general damages in England & Wales in itself is not high, although this was not corrected by the 10% uplift.
• The judgment in Simmons v Castle had the effect of creating legislation and which in turn creates a constitutional problem as the Court of Appeal of England & Wales does not have legislative powers in Gibraltar.
• TheSimmonsvCastleupliftisnotamatterofpracticeorprocedure.
• TheCourtinGibraltarcannotapplytheSimmonsvCastleuplift.
3. Discount Rates for Future Losses
• Whenassessingdamagesforfutureloss,itisnecessarytodiscountthefuturelossbecausetheclaimantisreceivingan accelerated payment.
• Thecurrentdiscountratesof2.5%(UK)and0.5%&-1.5%(Guernsey)arelowerthanthe4-5%envisagedinMallettv McMonagle[1970]AC166.
• Itwas,however,notappropriateforthelearnedJudgetodetermineanappropriaterate.
• ThecurrentEnglishGuidelinesappearsubstantiallytoundervalueclaimsinrespectoflong-termPSLA.
4. Damages for Wrongful Imprisonment
• Generaldamagesfordifferenttypesoftortmustbearsomereasonablerelationtoeachother.
• Generaldamagesforcatastrophicpersonalinjuryproduceannuityfigureswellbelowthedailyratesawardedforwrongful imprisonment.
5. Conclusion on the application of the English Guidelines
(a) The Guidelines are a distillation of guideline cases decided principally by the Court of Appeal from the 1960s onwards, and should be treated in the same way as the guideline cases themselves.
(b) They form part of the practice and procedure of the High Court of England & Wales and so apply to Gibraltar.
(c) The Guidelines are not binding law.
(d) A judge is entitled and obliged to go outside the Guidelines if appropriate.
(e) If the English Guidelines are not appropriate for Gibraltar they should not be followed. They stand to be modified if unsuitable to the circumstances of Gibraltar.
(f) The rule of substantive law for assessment of quantum of damages is to put the injured party in the same position he would have been in had he not suffered the wrong.
(g) Insofar as the English Guidelines do not do that they should not be followed as practice must give way to substantive law.
(h) Different guidelines for Gibraltar are appropriate, because the damages for pain, suffering and loss of amenity which would stand to be awarded under the English Guidelines are too low in the particular circumstances of Gibraltar.
(i) In due course, it would be desirable to have a full presentation of matters such as the figures for GDP, inflation and wages in England and Wales, Northern Ireland and Gibraltar and other evidence of the standard of living in these places. Consideration will also need to be given to the effect on the insurance market of an increase in general damages for personal injury.
(j) Without further material it would be impossible to fix guidelines for Gibraltar.
(k) In the meantime, Gibraltar should apply the Northern Irish Guidelines.
Summary
In short it was held that:
1. An ATE premium is still recoverable in Gibraltar.
2. It is unclear whether CFA uplifts are still recoverable in Gibraltar.
3. The Court in Gibraltar cannot apply the Simmons v Castle uplift.
4. The English Judicial College Guidelines are unsuitable to Gibraltar.
5. GuidelinesshouldbefixedforGibraltar.
6. In the meantime, Gibraltar should apply the Northern Irish Guidelines.
N.B. It was noted at paragraph 19 of the judgment that although Northern Ireland have published their own Guidelines, these themselves may have slipped behind, particularly as a result of the boost given to the economy subsequent to the Good Friday Agreement(10April1998).
Going Forward
Whilst this judgment is highly important, and may indicate the Supreme Court’s approach going forward, it is worthwhile noting that it is not binding on itself. We are presently analysing the learned Judge’s conclusions.
Should you have any concerns about this judgment and its implications, please do not hesitate to contact our team at [email protected].
The Personal Injuries Team: Simon P. Triay, Louise Carreras & Dhiraj S. Nagrani
Disclaimer:The information in this publication is for general information purposes only and does not constitute professional advice, legal or otherwise and does not intend to be comprehensive. Triay & Triay does not accept responsibility for any loss that may arise from accessing or relying upon the information contained in this publication.
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Louise CarrerasAssociateE: [email protected]: +350 200 72020
Dhiraj NagraniTrainee LawyerE: [email protected]: +350 200 72020
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