 |
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback] | |
Scottish Law Commission (Reports) |
||
|
You are here: BAILII >> Databases >> Scottish Law Commission >> Scottish Law Commission (Reports) >> Report on Damages for Personal Injury (Report No. 266) URL: http://www.bailii.org/scot/other/SLC/Report/2024/SLC266.image17.html |
||
[New search] [Help]
(1) Section 10 of the Administration of Justice Act 1982 is amended as follows.
(2) The existing text becomes subsection (1).
(3) After that subsection, insert—
“(2) The following are to be regarded as a contractual benefit for the purposes of subsection (1)(a) only if a condition set out in subsection (4) is satisfied—
(a) any sum paid or payable to the injured person under a qualifying insurance arrangement,
(b) any sum paid to the injured person by the injured person’s employer the cost of which has been recovered or is recoverable by the employer under a qualifying insurance arrangement.
(3) Otherwise, such sums are to be regarded as remuneration or earnings for the purposes of subsection (1)(i).
(4) The conditions are that—
(a) the injured person required to make any payment in order for the qualifying insurance arrangement to apply in relation to the injured person,
(b) the injured person chose to forgo additional remuneration or earnings in respect of the injured person’s employment with the employer in order for the qualifying insurance arrangement to apply (or apply in a particular way) in relation to the injured person, or
(c) the qualifying insurance arrangement applying in relation to the injured person caused an increase in the amount of a payment of a type which would anyway require to be paid by the injured person (whether directly or by the amount due being deducted by the injured person’s employer from the injured person’s remuneration or earnings for onward transmission to the person to whom the payment is due).
(5) It does not matter for the purposes of subsection (4)(a) or (c) whether or not the injured person had a choice as to whether the qualifying insurance arrangement applied in relation to the injured person.
(6) An arrangement is a “qualifying insurance arrangement” for the purposes of subsections (2) to (4) if—
(a) it is a contractual arrangement between an injured person’s employer and another person, and
(b) the arrangement provides for that other person to make any payment to the employer or the injured person in consequence of the injured person (in circumstances covered by the arrangement) being absent from, or ceasing, the injured person’s employment with the employer.”
NOTE
Section 3 implements recommendation 7, clarifying when payment under a Permanent Health Insurance (PHI) scheme will be deductible from an award of damages (paragraphs 3.44 to 3.53 of the Report cover the current law). Recommendation 7 identifies those financial contributions that qualify as consideration for participation in a PHI scheme, so that any sums paid out under the scheme are a non-deductible contractual benefit for the purposes of section 10 of the Administration of Justice Act 1982.
Subsection (3) inserts new subsections (2) to (6) into section 10 of the 1982 Act, setting out when sums paid out under a PHI scheme will not be deducted from an award of damages. The following references are to section 10 of the 1982 Act as amended by the new subsections (2) to (6) introduced in the present Bill.
Subsection (2) provides that certain payments are to be regarded as a contractual benefit for the purposes of section 10(1)(a) (that is, the payment is non-deductible from an award of damages) only if one of the conditions set out in the new subsection (4) is satisfied. Those payments are (a) money paid, or that is due to be paid, to the injured person under a qualifying insurance arrangement or (b) money paid to the injured person by their employer so long as the employer has received that money, or can receive that money, under a qualifying insurance arrangement. The meaning of “qualifying insurance arrangement” is set out in subsection (6) and includes PHI and similar income protection schemes.
Subsection (3) makes it clear that if a payment listed in subsection (2)(a) or (2)(b) does not meet one of the conditions set out in subsection (4), then that payment is to be regarded as remuneration or earnings for the purposes of section 10(1)(i) (that is, the payment is deductible from an award of damages).
Subsection (4) sets out the conditions that, if applying in relation to a payment listed under subsection (2)(a) or (2)(b), will mean that the payment is non-deductible from an award of damages. One condition applying to a payment is sufficient for it to be non-deductible. The conditions are (a) that the injured person made a payment in order to become a member of the insurance scheme (including payment via a deduction from the injured person’s wages); (b) the injured person chose to take a lower salary with their employer in order to be a member of the insurance scheme or to receive increased protection under the insurance scheme; or (c) the injured person paid tax or national insurance on membership of the insurance scheme as a benefit. An injured person who satisfies one of the conditions is recognised as having contributed to a PHI scheme and is therefore entitled to benefit from any payment received under that scheme without the risk that any award for damages might be reduced by deducting the PHI scheme payments.
Subsection (5) provides that, for the purposes of determining whether the injured person meets the conditions set out in subsection (4)(a) or (4)(c), it does not matter that they could have chosen not to participate in that particular qualifying insurance arrangement.