Serious injury cases - how compensation is calculated

Recently I was reading the latest Road Safety Authority (RSA) report on road accident statistics. The 2010 RSA Report is their most recent and it looks back on a decade of road safety improvements.

Recently I was reading the latest Road Safety Authority (RSA) report on road accident statistics. The 2010 RSA Report is their most recent and it looks back on a decade of road safety improvements.

From the statistics, two things jumped out at me. The first is the extraordinary reduction in the number of people killed on our road each year. In 2001 411 people were killed on Irish roads, by 2010, that annual toll had come down to 212.

Most of us were probably aware that road fatality numbers had improved dramatically over the last decade. What I suspect most people are unaware of is the second thing that jumped out at me from the RSA statistics. These show that over the period 2001 to 2010, there was very little improvement in the number of people suffering serious injury on our roads. In 2001, the RSA study states that 10,222 people were injured on our roads. By 2008 this figure had barely changed at 9,758, the following year it remained unchanged at 9,752 and then there was some improvement on the tenth year, 2010, with an injury toll of 8,482. If this result is continued into the 2011 statistics we will have achieved a mere 17% reduction in injuries at the same time as deaths came down by 52%.

The reason that this is important is that injuries change lives – particularly road traffic collision injuries. Non-fatal road traffic collisions rarely make the news but the effect of very serious injuries, particularly spinal and brain injuries is devastating to the victim and his or her family. Of course only a tiny proportion of the road injury statistics discussed above would involve such devastating injuries but the fact remains, the incidence of such injuries is not being effectively tackled.

In legal practice, we tend to describe these most serious of injuries as ‘catastrophic injuries’. Catastrophic injuries arise most commonly from road traffic accidents and birth injuries to babies though they can occur in almost any setting imaginable from a fall in the home to a workplace accident. What is different about a catastrophic injury is that it changes the way a person lives their life afterwards. Recovery is not expected; the injury is permanent and usually leaves the person incapable of independent living. For this reason the damages that the courts provide for catastrophic injuries tend to appear to be quite large. These are the million-euro and multi-million-euro cases that catch the news headlines. Much is made of the total damages awarded but rarely is it explained what the figure really means for the injured person. The total sum is made up of many different components and a lot of expertise is required of the solicitor specialising in personal injury law to seek out and assemble the necessary evidence to prove the appropriate value for each component.

1. Pain and Suffering

The damages paid for pain and suffering, to date and into the future – called ‘general damages’ - will often make up only a minority of the overall damages in a catastrophic injury case. In fact in Irish law, there is a cap on damages that people are often unaware of. The value of this ‘cap’ nudges upwards slowly, pretty much in line with inflation and currently it is at a figure in or about €500,000. This cap is an unwritten thing that judges have developed over the years and it only applies in personal injury cases. Perversely, people who have their reputations damaged by a newspaper article can recover unlimited compensation for the loss of their good name while those left with the most devastating of personal injuries, a young mother for example who has had a spinal injury at the level of her neck leaving her paralysed from the neck down will only be entitled to a maximum of about €500,000 to ‘compensate’ for her pain and suffering. This is one reason why I dislike the word ‘compensation’. Its use suggests some level of justice which in truth is entirely absent when it comes to serious personal injuries in Ireland. Despite this, the public have been fed a myth by the insurance industry that Ireland has a generous system of ‘compensation’. The finger is often pointed to the UK as a country of moderate damages which we should emulate. Naturally the less an injured person is entitled to receive by way of ‘compensation’ the better the insurance company likes it but they omit to mention that in the most serious injury cases, the UK awards are between 4 and 5 times greater than equivalent cases here in Ireland.

The ‘cap’ is then used as a reference point in cases of injury less serious than the one mentioned above of the mother left with quadriplegia. Indeed the courts have gone so far as to say that if your suffer a brain injury and because of the severity of that brain injury you are not fully aware of just how awful your plight is, you are not entitled to the maximum level of damages. For this reason, despite public perception to the contrary, only a small few cases each year achieve at or close to €500,000 damages for their actual injury.

2. Special Damages

The rest of the damages is made up of what we call ‘special damages’. In catastrophic injury cases, I split these out-of-pocket type expenses into 4 categories. Loss of earnings, medical expenses and ability expenses.

(i) Loss of Earnings

We calculate what a person should be earning, but for the injury, and this gives us a loss figure. Of course, it is rarely that simple. In the case of a child, We may have to get experts to assist in determining what that child’s earning capacity might have been if the injury had not occurred or there may be complex pension calculations to be made to ensure that no aspect of the loss, no matter how small is overlooked. Each case is different.

(ii) Medical Expenses

This can often be the single largest element of a major personal injury case. In a road traffic accident as opposed to other types of injury, a special rule applies whereby hospitals are entitled to charge a special daily rate for the care they give. For some hospitals that is now close to €1,500 per day! This is charged to the injured person but only on the basis that it is recovered from the road traffic insurer. If the same injury were incurred in the workplace, where there is also usually an insurer, the hospital would not be entitled to make such a charge. It seems illogical and it certainly does add to the cost of litigation. Needless to say, while these types of medical expenses can run into the hundreds of thousands in the most serious cases, this money is just paid out directly to the hospital.

Other medical expenses will cover the cost of future medical care, and most significantly, nursing care. Many people with such severe injuries will need ongoing daily nursing care. The requirements vary from patient to patient but once the need is assessed, the cost – to end of life – can be calculated. It is this cost that can sometimes run to millions of euro and every euro of that will have to be paid out over time to pay for expensive though essential nursing or other medical care.

(iii) Ability Expenses

Ability expenses refer to a wide range of items: mobility aids, information technology, modifications to the home or various ‘gadgets’ that combine to maximise the quality, enjoyment and independence of living for the injured person. The requirements vary from person to person but most people with catastrophic injuries will require modifications to their home and often a new home to allow for assisted living and ease of mobility. There may be a requirement for advanced computer technology which can assist a person to communicate either with those around them or with the wider world, to hear or read better, or systems that allow a person to operate a computer through whatever limitations they have acquired by injury. Such devices may well not be available through the health service, and now, more than ever, the cost of these items and their replacement and maintenance into the future must be calculated and added to the claim for damages.

Our Road Safety Statistics tell us a lot about deaths on Irish roads but they tell us very little about the huge human cost of serious injury. I hope that this brief column will help the reader to better appreciate why some cases attract millions of euros in damages and most importantly of all, to realise that so little of that money is to compensate for the devastating injury and loss of enjoyment of life suffered.

If you have a query regarding this article you can contact Cian O’Carroll Solicitors on Freephone 1-800 60-70-80 or visit www.TIPPLAW.com

Cian O’Carroll Solicitors, A Medical Negligence & Personal Injury Law Firm.