Greene v. J. Hughes Haulage Ltd. [1997] IEHC 110; [1997] 3 IR 109; [1998] 1 ILRM 34 (28th June, 1997)

2. It is quite clear to me from the evidence that this accident has had very serious consequences indeed for the Plaintiff. From being a well paid and ambitious professional in an executive role she is now in a debilitated state. Although she did have genuine physical injuries, I am satisfied that the most serious consequence of this accident is that she has suffered from some kind of post traumatic disorder involving what has been described as post traumatic migraine. The facts of the accident were horrific. It was a collision between a car driven by the Plaintiff and what she describes as a "huge juggernaut". She became trapped for a considerable period in the car following on the accident. Several times in the witness box she broke down when recalling the actual facts of the accident. I do not think that any of this was contrived or put on. I believe that her post traumatic disorder is closely related to the constant presence in her mind of the facts of the accident itself. I think, however that once the proceedings are over and the facts of the accident begin gradually to recede from her mind, there will probably be improvement by degrees and I think that having regard to her previous history of high intelligence and enterprise there is every reason to hope that she may in time make a complete recovery. I therefore must approach the assessment of damages in that light.

4. I have already mentioned that the Plaintiff has been suffering from what has been described as a post traumatic migraine. She has had very severe headaches and I think that this is the most plausible explanation for them. In the period since the accident, she sustained double vision, some loss of sight in the right eye, deafness, pain in the chest and back and in her two ankles, urinary problems in the form of frequency, nausea, vomiting, phobias concerning the accident, problems about travelling in a car, depression, mood swings, personality change so that she can be truculent and difficult and has had rows with her mother and former fiancee. She has also sustained aggravation of some degenerative problems. She was badly scarred across the body which can be seen in photographs. There were other symptoms also which she believes were connected with the accident such as vaginal infection, constipation, piles but I do not think that the evidence sufficiently connects them with the accident. I have not set out her injuries and symptoms in any particular order and it is important to note that they did not all arise immediately after the accident and their connection with the accident can therefore be suspect. But I believe that subject to the exceptions which I have mentioned the connection is there. Within a spectrum she is suffering from a severe form of post traumatic disorder.

5. However, the really important consequence of the accident is that the Plaintiff is no longer able to work. At the time of the accident and for a period after it she held the post of Clinical Research Associate with the well known Elan Corporation in Athlone. That post involved her co-ordinating and monitoring of what was known as Phase I to IV clinical trials. Her post was treated as a management grade and she reported directly to the head of the medical department. It was a well paid post that included apart from salary various perks such as a company car and other benefits. Before she took on that post in 1988, the Plaintiff's history was as follows. She was born on the 20th February, 1954 as the older of two girls. She was educated at Laurel Hill Convent School in Limerick and subsequently trained to be a nurse. After periods in two different hospitals in Limerick she spent three years as a public health nurse in Limerick, from 1978 to 1981. She then moved out of nursing and worked with the Irish Epilepsy Association for some time but later became a Medical Executive with Cow & Gate in Wexford. She remained with that company until 1985 but after various other positions in the pharmaceutical business, she eventually applied for and obtained the post in Elan. Following on the accident in June 1991, she found herself unable to go back to work for a considerable period. This was largely because of continuing headaches, urinary frequency, spasmodic double vision, some diminution of sight in the right eye and other symptoms. She eventually went back to work on the 25th November though she didn't feel able for it. She did so, however, under persuasion. Her mother travelled up to be with her and help her. The Plaintiff found she was not able for her work but she remained until her holidays on the 19th December, 1991. She was due to return to work on 6th January, 1992 but did not feel able to do so. By that time she had these migraine headaches which had become much worse and she had some deafness and loss of balance. By a letter dated the 15th May, 1992, Elan notified the Plaintiff that she was being made redundant on the grounds that they no longer had need of her post. She was informed, however, that her full salary would be paid until the 31st July, 1992. The Plaintiff initially did not accept this redundancy as being genuine and lodged a claim before the Employment Tribunal. That claim was ultimately settled on a basis of her leaving the company. There was evidence before this Court that Elan shortly after this redundancy notice advertised a new post which the Plaintiff alleged was in practice similar. Although, the new post required medical qualifications which the Plaintiff did not have. The Plaintiff alleges that persons with medical qualifications were rival applicants for her post in 1988. The Plaintiff's failure to return to work was a very real problem for Elan and I cannot help being suspicious that the redundancy might have been less than genuine. But suspicion is not enough and I am satisfied that the Plaintiff has not discharged the onus which would be on her to satisfy this Court that the redundancy notice would not have been served if she had not had the accident and that she would have remained with Elan. For the purposes of assessing loss of earnings in this case, therefore, I am assuming that the redundancy was genuine and operative. As she was paid her salary in full up to the 31st July, 1992 she can only claim loss of earnings from that date.

6. I must now turn to consider on what basis I should approach the question of loss of earnings. There is of course a difficult and important question of whether a deduction will have to be made of monies paid or payable to the Plaintiff under a disability policy taken out for her benefit by her former employer Elan. I will be dealing with that question in some detail later on in this Judgment. First I must consider the question of what loss of earnings should be awarded if no deduction were to be made. First of all, I am satisfied that the Plaintiff by reason of her medical condition which in turn flowed from the accident has been unable to do any work since the 31st July, 1992. Secondly, I believe that the Plaintiff's medical condition will gradually improve once these proceedings are disposed off. Thirdly, I must accept the evidence from Ms. Paula Smith as it conforms with common sense, that having regard to the Plaintiff's age and medical history it would be extremely difficult for her to get herself back in a few years time on to the job market. I believe, however, that once she made a reasonable recovery she would have the motivation to become at least self-employed in some capacity or other. She might for instance do freelance nursing perhaps on a part-time basis at first but more probably she might, as suggested at the hearing, start her own business such as for instance a nursing home. The trouble with all these cases of post-traumatic syndrome is that there can be no guarantee that the Plaintiff will in fact recover and if that happens an injustice may be done by not giving her full loss of earnings into the future. But I can only act on probabilities and it seems to me that on the medical evidence which I have heard, I could not hold that she will never again be capable of earning a living. I do accept however that her full recovery will be gradual and that even if she did decide to start her own business it would take some time before she would be achieving earnings of the order that she would have enjoyed if there was no accident. As against that, I must also take into account that if there had been no accident there would have been some inevitable delay between her being made redundant and acquiring a suitable alternative post.

7. Before I specify the figures which I have arrived at based on the foregoing principles, I must now deal with the difficult question of whether monies of which she is and will continue to be in receipt pursuant to the policy of insurance taken out by her former employers must be deducted from her loss of earnings. I will first of all explain the nature of the policy and the payments and then outline the two opposing arguments put forward at the hearing. The Elan Corporation had an Employee Benefit Plan designed to provide a retirement pension related to salary before retirement, the opportunity to take a tax free cash sum at retirement in lieu of part of the pension, benefits on death in service prior to retirement, benefits on early retirement and an income in the event of long term injury or illness. What is relevant to this case is the last of these benefits. This arose under the second of two separate arrangements which together constituted the Employee Benefit Plan. This second arrangement was called "Disability Benefit Plan" and it was clear that the benefits under this plan were separate from those under the Retirement and Death Benefit Plan and were governed by a policy issued to the company by the Irish Life Assurance Plc. Benefits under the Disability Benefit Plan became payable, if arising from sickness or accident, the employee was not undertaking any other occupation for profit or reward. Under the plan, when the employee was totally disabled for a continuous period of six months an income was paid equal to 75% of the salary at the date of disablement inclusive of the basic social welfare disability benefit. The income was to be paid until recovery, death or reaching normal pension date and would increase during payment at the rate of 5% per annum compound. For partial disablement a proportionate payment would be made. The trustee of the plan is Coyle Hamilton Trustees Limited but, in practice, the Irish Life Assurance Plc deals directly with the Plaintiff in this case and the Plaintiff has been receiving full disablement benefit under the policy from Irish Life. There was a dispute at one stage as to whether she was entitled to this once she was made redundant but this dispute was resolved by an agreement under which Irish Life undertook to continue to make the payment on an ex gratia basis subject to the terms and conditions of the policy. This in itself raises a tricky question because it may be arguable as to whether there is a continuing legal liability on the part of Irish Life. There is no doubt that such contract of insurance as there is was made with Elan and not with the Plaintiff as it was a policy taken out for the benefit of persons such as the Plaintiff. The fact remains that she has been in receipt of monies due to her on foot of full disablement and will as a matter of probability continue to be in such receipt as long as she is disabled. The question obviously now arises as to whether the value of these payments should be calculated and deducted from the Plaintiff's loss of earnings claim.

10. Mr. Hickey, Counsel for the Defendant submits that the Irish Life Policy in this case is not a contract of insurance of the kind contemplated in Section 2 of the 1964 Act because of the fact that the premiums were paid by the employer. In making this submission he relies mainly and indeed almost exclusively on the decision of the House of Lords in Hussain -v- New Taplow Paper Mills 1988 1 All E.R. 541. Mr. Hickey partly relied also on a reference in Kerr on the Civil Liability Acts 1961 and 1964 at p.134 to a case of Dennehy -v- Nordic Cold Storage Limited, an unreported decision of Hamilton P. (as he then was) dated 8th May, 1991. It appears from the author's note that in that case an employee, absent from work due to an injury, received a regular payment of monies from his employer pursuant to a non-contributory income protection plan and subsequently sued his employer for loss of earnings. The employer was indemnified, pursuant to a contract of insurance for the income continuance payments and the Plaintiff argued that Section 2 of the Civil Liability (Amendment) Act, 1964 applied and that the money so paid should not be taken into account. Hamilton P. held that such a contract of insurance did not fall within the Section's ambit and that consequently the monies received by the employees ought to be deducted from the assessment of damages. The author then goes on to state the following:-

11. I read this as being Mr. Kerr's own analysis of the ruling of Hamilton P. There is no Judgment available and it appears to have been a ruling in the course of a trial. But I rather doubt that Mr. Kerr is correct in his interpretation of the basis of the decision. It would seem to me more likely that as the contract of insurance in that case appears to have been simply a contract indemnifying the employer against a liability which the employer himself took on it was not within the category of contracts of insurance covered by Section 2. I would respectfully agree with that but it is interesting to note that even if Mr. Kerr's analysis is correct the contract of insurance in this case is totally different from the contract of insurance in the Dennehy case as this contract of insurance was not an indemnity contract but rather a contract taken out by the employer for the benefit of persons such as the Plaintiff. It seems to me therefore that the Dennehy case is not really in point. There does not appear to be any Irish case relevant to the question of whether monies payable on the type of policy that pertained in this case should be deducted or not having regard to the terms of the 1964 Act. The English case law including the Hussain case relied on so heavily by Mr. Hickey has to be approached with great caution because in England the question of whether insurance monies have to be deducted or not in any given personal injury case has always been governed by the common law and not by statute. In England, the opposite however has always been the case in relation to fatal injury cases. It is only because of statute that the English courts have countenanced any non deduction of insurance monies in a fatal injury claim. It would seem likely and indeed both Ms. Clark and Mr. Hickey seem to be in agreement about this, that the whole purpose of Section 2 of the Civil Liability (Amendment) Act, 1964 was to provide a corresponding statutory provision for personal injury actions to Section 50 of the Civil Liability Act, 1961 which provided for equivalent non deductions in fatal injury claims. The 1964 Act was a short act of what might be described as a tidying up nature covering relevant matters not already provided for or inadequately provided for in the Civil Liability Act, 1961. But Section 50 of the 1961 Act is largely a re-enactment of earlier statutory provisions in the interpretation of which the Courts have held that the deceased need not be a party to the contract of insurance and need not have paid the premiums. It seems reasonable in the circumstances to assume that Section 2 of the 1964 Act was intended by the Oireachtas to be interpreted similarly to Section 50 of the 1961 Act and therefore, as I see it, the Oireachtas would not have intended that the injured party had to be a party to the contract of insurance or that the injured party had to be the person paying the premiums.

"The path taken by the collateral benefits issue in fatal accident claims has been curiously different from the path it has followed in the field of personal injuries. Whereas there was prolonged general acceptance of the rule that the damages in a personal injury claim were not to be reduced because benefits had been conferred upon the Plaintiff by third parties which mitigated his loss, the general rule was the exact opposite where the claim was in respect of a fatal injury, and it became accepted, without any real dispute, that only the net pecuniary benefit accruing to the dependants was recoverable as damages. This undoubted general rule finds its clearest and most authoritative expression in the speeches of their Lordships in Davies -v- Powell Duffryn Collieries 1942 A.C. 601. Lord McMillan put it thus:-

14. I would make the passing comment at this stage that there is no material difference relevant to this case between that provision and the statutory provision relating to insurance monies contained in Section 50 of the Civil Liability Act, 1961. Section 50 of course is itself a re-enactment of Section 5 of the Fatal Injuries Act, 1956 which had replaced Section 1 of the 1908 Act. During all this period of legislative history in relation to fatal injuries and until the Civil Liability (Amendment) Act, 1964 there was no statutory provision relating to non deductibility of insurance monies in relation to personal injury claims. The principles were governed and developed solely by the common law. But the common law in relation to non deductibility of insurance monies for personal injury claims was quite different than the pre 1908 Act common law in relation to non deductibility of insurance claims for fatal injuries.

15. In more recent legislation in England the deductibility of items in fatal injury claims has been extended but even under the earlier English legislation which was similar to the Irish legislation it was unsuccessfully contended by the Defendant in Bowskill -v- Dawson (2) 1955 1 Q.B. 13 that the statutory provisions relating to non deductibility of insurance monies only applied where the deceased was himself a party to the insurance contract. It was again unsuccessfully argued by the Defendant in Green -v- Russell 1959 2 Q.B. 226 that the narrower earlier legislation in England (similar to the Irish legislation) only applied where there was an enforceable right in the estate or their dependants to the monies. It is clear on the English authorities that a policy taken out by employers for the general benefit of employees one of which may be the deceased is sufficient.

16. As I have already indicated, the question of non deductibility of insurance monies in a personal injury claim as distinct from a fatal injury claim was until 1964 in Ireland and still is in England governed solely by the common law and not by statute. The original leading case in relation to personal injury claims was Bradburn -v- Great Western Railway (1874) L.R. 10 Ex. 1. Although there has been a tendency in the English case law progressively to cut down on the categories of collateral benefits which are non deductible, this decision according to McGregor on Damages "has withstood all the recent changes of judicial heart over the issue of collateral benefits". McGregor explains the basis on Bradburn as follows:-

18. Despite this clear exposition quite an amount of confusion arose as to when benefits were to be deducted or not (see Payne -v- Railway Executive 1952 1 K.B. 26, Browning -v- The War Office 1963 1 Q.B. 750 and Parsons -v- B.N.B. Laboratories Limited 1964 1 Q.B. 95). It may well have been because of the uncertainty of the common law at that time that the Oireachtas decided to enact Section 2 of the Civil Liability (Amendment) Act, 1964 simplifying the position and in effect applying to personal injury actions the same rules as to non deductibility as already applied to fatal injury actions under Section 50 of the Civil Liability Act, 1961. In each case the expression "under any contract of insurance" is used and I therefore see no reason why the broad interpretation which has always been given to that expression in the fatal injury cases should not now be applied to personal injury actions. Of course this does not mean that a simple indemnity policy indemnifying the employer against some contractual undertaking by it to continue making salary payments to an employee who had become incapacitated would come within the Section. I think that it clearly would not. But that is totally different from the type of policy in place in this case.

19. There is one superficial objection which can be made to the broad interpretation of "under any contract of insurance". It could be said that an anomalous injustice could occur if the Defendant was himself the employer. In that case it might be argued that there was no third party claiming advantage from the Plaintiff's own insurance benefits. But I do not think that the interpretation of the clear words of the section should be governed by such considerations. In most cases the benefit policy will form part of the total remuneration and the employee will therefore be indirectly contributing to the premiums. In other cases it may be possible to imply a term permitting deductibility in the contract of employment. None of that arises in this case. Elan did not cause the Plaintiff's injuries.

20. The English position in relation to personal injury actions is still governed by the common law and as Mr. Hickey has rightly pointed out, the latest authority is the House of Lords decision in Hussain -v- New Taplow Paper Mills Limited 1988 1 All E.R. 541. For the reasons which I have indicated, I take the view that it is now the statute and not the common law which governs the position and therefore the Hussain case is not really relevant. But even if it were relevant, it can, I think, be distinguished from this case in that in the Hussain case the employers assumed a direct contractual liability to the plaintiff to pay partial salary in the event of incapacity and it was held that the fact that the defendants happened to have insured their liability to meet those contractual commitments as they arose did not affect the issue in any way. It is, however, true that Lord Bridge of Harwich does describe as a well established exception to the deductibility rule the situation "where a plaintiff recovers under an insurance policy for which he has paid the premiums, citing Bradburn -v- Great Western Railway Company . But although the Plaintiff in this case did not pay premiums the insurance arrangements were part of her remuneration package and, as I understand her contractual arrangements with her employer, if for instance the insurance company had become insolvent or in some way unable to meet its commitments there would have been no right of action by her against her employer. Furthermore, even though the benefit was calculated by reference to salary it was a disability benefit and not salary. Even if the common law position pertained, therefore, I think that a strong argument could have been made in favour of non deductibility but as I have explained that does not arise as in my view the question of deductibility is entirely governed by Section 2 of the Civil Liability (Amendment) Act, 1964 and for the reasons which I have indicated I accept the submissions of Ms. Clark. The disability payments already paid or to be paid ought not to be deducted.

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	High Court of Ireland Decisions
You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Greene v. J. Hughes Haulage Ltd. [1997] IEHC 110; [1997] 3 IR 109; [1998] 1 ILRM 34 (28th June, 1997) URL: http://www.bailii.org/ie/cases/IEHC/1997/110.html Cite as: [1997] IEHC 110, [1998] 1 ILRM 34, [1997] 3 IR 109

High Court of Ireland Decisions

Greene v. J. Hughes Haulage Ltd. [1997] IEHC 110; [1997] 3 IR 109; [1998] 1 ILRM 34 (28th June, 1997)