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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.image9.html |
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Current law
3.82 While injured persons are entitled to opt for private medical treatment, many instead use the NHS. 1This results in costs for the NHS, which arguably should be borne by the responsible person. To address this, section 150 of the Health and Social Care (Community Health and Standards) Act 2003 imposes liability upon the responsible person to pay charges incurred for NHS ambulance services or for treatment at an NHS hospital provided to the injured person.
Responses to the Discussion Paper
3.83 We asked consultees:
“12. Do you consider that any reform of the existing regime in relation to the costs of an injured person’s medical treatment is necessary?”
3.84 Twenty-six consultees answered this question: six were in favour of reform and 20 thought that no reform was necessary.
3.85 Of the six consultees in favour of reform, four raised the issue of personal injuries arising from disease.2 Under subsection (5) of section 150, responsible persons are not liable to the NHS for treatment for injuries arising because of a disease. Thompsons Solicitors and Unite the Union told us that this is unsustainable “given the thousands of industrial related diseases diagnosed in Scotland every year caused by negligent working practices and the resultant strain on the NHS”.
3.86 Two consultees expressed concern that the damages paid to account for future treatment of the injured person are not always spent on that treatment.3 Both consultees were concerned that this leads to overcompensation. To avoid this, Clyde & Co recommended implementing a “system whereby insurers arrange and pay directly for treatment issued and completed prior to ultimate settlement”.
Discussion
3.87 On the issue of industrial disease, we note that, in 2020, Stuart McMillan MSP (who responded to our consultation) introduced the Liability for NHS Charges (Treatment of Industrial Diseases) (Scotland) Bill, which sought to amend section 150 to include industrial disease. The result would be that any person making a payment of damages to or in respect of an injured person whose injury is a result of an industrial disease, would become liable for the cost of any NHS ambulance or hospital charges in relation to that injury. The bill was considered at Stage 1 by the Health and Sport Committee but was withdrawn due to an insufficiently robust financial memorandum.
3.88 There is a clear rationale for expanding section 150 to include industrial disease: it would comply with the principle that the financial burden for treating injuries should fall on the responsible person, it would allow the reallocation of NHS resources away from the (often long-term) treatment of industrial disease to other departments in need of additional funding, and it would provide an incentive to employers to ensure that health and safety standards are adhered to in industrial workplaces.
3.89 However, we note that such a reform would have significant implications for the NHS and for the insurance industry. It is not clear to us that the NHS is equipped to assess its expenditure on treating injured persons with industrial diseases, or equipped to pursue claims against responsible persons. There is also concern that the cost of this additional liability on insurance providers may be passed on to businesses and individuals via an increase in insurance premiums.
3.90 We consider that the issue of whether to legislate so as to include “industrial disease” within the definition of disease in the 2003 Act is a question of policy with far-reaching practical and financial consequences for health services and the insurance industry alike. There is currently a lack of sufficient research and evidence in this area, making it difficult to reach a firm conclusion. We make no formal recommendation for reform to the existing regime in relation to the costs of an injured person’s medical treatment. However, we recommend that:
Current law
3.91 Often, a local authority will be under a statutory duty to provide care and accommodation to an injured person. Where there is such a duty on the local authority, but the injured person decides instead to arrange private care and accommodation, should the responsible person be liable for the associated costs? As there is no equivalent to section 2(4) for expenses of this kind,4 the argument that the injured person failed to mitigate their loss is, in principle, open to the responsible person.
3.92 Scots law in this area is neither clear nor well-understood, and there are few cases that consider the matters in detail. This is a serious concern, considering the sums in such cases can be substantial. In our Discussion Paper, we set out four cases from the English Court of Appeal which may shed light on the legal principles in this area.5
3.93 In Rialas v Mitchell, 6the court held that, while there might be cases in which it was unreasonable for an injured person to receive care at home, once it was concluded that it was reasonable for the injured person to remain at home, there was no ground for saying that the responsible person should not meet the reasonable cost of this care.
3.94 In Sowden v Lodge,7 the Court of Appeal dealt with two appeals in which the injured person, while being in receipt of local authority care, argued that their needs went beyond what the local authority could provide. The court held that the appropriate test for assessing the injured person’s needs was not what was in the best interests of the injured person, but what was reasonable to meet those needs. 8Therefore, a comparison must be made between what the injured person reasonably required and what the local authority was likely to provide; if the statutory provision met the injured person’s reasonable requirements, then the responsible person need not pay for some different care regime.9 In other words, the responsible person’s obligation (if any) was to “top up” the level of care provided by the local authority to the level of the injured person’s reasonable requirements, if necessary.
3.95 While the logic of the reasoning is easy to follow, from a policy perspective the decision raises a fundamental question: why should the state rather than the responsible person be primarily responsible for meeting the injured person’s needs?
3.96 In Crofton v NHS Litigation Authority,10 the court identified two issues regarding the provision of local authority care where there is a substantial award of damages. The first issue is whether the local authority, where substantial damages have been awarded, can be satisfied that it should make welfare payments to the injured person at all (the threshold stage). The second issue is whether, at means testing, the local authority should have regard to the award of damages in quantifying any welfare payment.11
3.97 The court held that the local authority could not take account of the injured person’s award of damages at the threshold stage,12 but that it did not have sufficient evidence before it to determine whether the local authority would take this into account at means testing.13 Consequently, the court held that, given the local authority was going to make at least some form of direct payments to meet the cost of the injured person’s care, the court should take these payments into account in quantifying damages:
“Once the judge decided that the council would make such direct payments, it seems to us that he was bound to hold that they should be taken into account in the assessment of damages.
“... If the court is satisfied that a claimant will seek and obtain payments which will enable him to pay for some or all of the services for which he needs care, there can be no doubt that those payments must be taken into account in the assessment of his loss. Otherwise, the claimant will enjoy a double recovery.”14
3.98 In Peters v East Midlands Strategic Health Authority, 15the Court of Protection, which in England and Wales is responsible for making decisions on financial and welfare matters for people who lack mental capacity, had appointed a deputy to manage the injured person’s property and affairs. The court considered whether, when an injured person has both a right of action against a responsible person and a statutory right to services provided by a local authority, the injured person is entitled to recover damages as a matter of right, or only if it was unreasonable to expect the injured person to rely on their statutory right. The court said:
“. We can see no reason in policy or principle which requires us to hold that a claimant who wishes to opt for self-funding and damages in preference to reliance on the statutory obligations of a public authority should not be entitled to do so as a matter of right. The claimant has suffered loss which has been caused by the wrongdoing of the defendants. She is entitled to have that loss made good, so far as this is possible, by the provision of accommodation and care .”16
3.99 This decision therefore departs from the “top up” approach of Sowden and places responsibility for provision of care squarely on the responsible person and his insurers. Indications so far are that it has been well received.17
3.100 Having reached this conclusion, the court in Peters was concerned about the possibility of double recovery. However, the court was satisfied that an effective way of policing the matter and controlling any future application for local authority care or accommodation was for an undertaking to be given by the injured person’s deputy on the injured person’s behalf. The undertaking was to the effect that the senior judge of the Court of Protection would be notified of the proceedings, and the authority of the injured person’s deputy would be limited such that no application for public funding of care could be made without further direction of the Court of Protection, and the responsible persons would be notified of any such application. The court regarded this as an effective means of addressing the risk of double recovery.18
3.101 This brief review of the recent appellate case law in England and Wales supports the general principles that an injured person is entitled to the reasonable costs of care and accommodation; that the responsible person rather than the state should meet those costs;
that the injured person is entitled to opt for private or for public provision of care and accommodation; and that in making an award of damages the court should seek to guard against the risk of double recovery. Various possible approaches to realising these principles are set out in McGregor on Damages:
“How then should the matter be dealt with so as to ensure that it is the tortfeasor, rather than the wider community, who bears the cost of the injured person’s accommodation and care? It was suggested in earlier editions that an attractive way of achieving this was to require across the board injured claimants to pay for accommodation and care provided by local authorities and [those claimants] would accordingly be awarded the damages with which to do so. This solution, which also removes the injured person’s dependence on the resources and policies of the local authorities, had earlier been achieved in Avon CC v Hooper, being a decision under different legislation which permitted this. An alternative, and probably better, solution would be to entitle injured persons to care and accommodation from the local authority in all cases without payment and to award damages for the cost of that care and accommodation to the local authority itself. Longmore LJ in Sowden v Lodge made it clear that he thought that this is what the legislation should provide and this thought was strongly endorsed by the Court of Appeal in Crofton. Yet a far better route has opened for allowing the full damages to be paid by the tortfeasor. This is by virtue of its being held, in case after case, that it is reasonable for claimants to opt for private care and the Court of Appeal has since given this approach a great boost by holding in Peters v East Midlands Strategic Health Authority that claimants are entitled as of right to opt for private care, so that the whole question of reasonableness is by-passed.”19
Responses to the Discussion Paper
3.102 In our Discussion Paper, we set out three policies that the law should give effect to:
(1) There should be recognition that different injured persons will have different care and accommodation needs, and what is needed will be a matter of evidence to be assessed by the courts. An injured person is entitled to have their loss made good and, for seriously injured persons, that may include the cost of private care and accommodation.
(2) While local authority provision should remain available in accordance with the various statutory schemes, the default position should be that the responsible person, rather than the state, should pay care and accommodation costs.
(3) However, the corollary of the second policy is that there requires to be some mechanism for avoiding double recovery.20
3.103 Accordingly, we asked consultees:
“13 . Do you agree that the default position should be that the responsible person
rather than the state should pay for the cost of care and accommodation provided to an injured person?
14. Do you agree that an injured person should be entitled to opt for private care and accommodation rather than rely on local authority provision?
15. Do you have any other comments?”
3.104 Twenty-eight consultees responded to Question 13; 23 agreed that the default position should be that the responsible person, rather than the state, should pay for the cost of care and accommodation,21 four disagreed with this default position, 22and one consultee, Zurich Insurance, offered a different view.
3.105 Of the 23 consultees who agreed with the default position, many cited the variation in quality and extent of local authority provision as their reasoning. The Association of Personal Injury Lawyers (“APIL”) noted that “there is not a ‘state’ fund for the injured person to draw on if the responsible person does not pay”. They refer to a “postcode lottery”, noting that standards of care availability vary widely across Scotland and that “it is not right that an injured person should have to rely on inconsistent state provision, instead of the responsible person paying for the cost of care that is required due to their negligence”.
3.106 Some consultees, while supporting the default position, did express concern regarding the issue of contributory negligence.23 Stagecoach Group said that where there is contributory negligence, it may be the case that an award of damages would not cover the full cost of the injured person’s needs. Similar points were made by NFU Mutual and the Association of British Insurers.
3.107 Clyde & Co were of the view that the responsible person should not have to pay for the cost of care and accommodation if the injured person chooses to receive that care or accommodation from the state. While an injured person’s ability to choose the source of such care and accommodation should be preserved, unless the state levies charges to an injured person for care or accommodation, compensators should not be required to cover state-sponsored charges, as the loss is not borne by the injured person but by the state.
3.108 Finally, Zurich Insurance provide a qualified view in favour of the default position. They said that the responsible person should be liable for care and accommodation costs that arise as a direct result of the injuries sustained by the injured person, but the responsible person should not be liable for costs that are linked to a pre-existing condition which has been exacerbated by the injury.
3.109 Twenty-eight consultees responded to Question 14; 20 agreed that an injured person should be entitled to opt for private care and accommodation even where local authority provision is available,24 six disagreed,25 and two offered an alternative view.26
3.110 Just as in response to Question 13, a number of consultees referred to the difference in quality between local authority and private care, and the variation in quality as between local authorities, in their answer. Digby Brown told us:
“Local authority care and accommodation is not set up to offer the degree of flexibility that is often needed to meet the needs of the injured person. An injured person should not have to compromise in relation to care and accommodation simply to reduce the damages payable by the wrongdoer ... In almost every case in which the pursuer has suffered catastrophic injury, privately funded care and accommodation is better able to meet the needs of the pursuer than local authority provision.”
3.111 Three consultees 27referred to the case of Peters v East Midlands Strategic Health Authority 28in support of their conclusion that there is no reason to differentiate between private medical treatment and private care and accommodation.29
3.112 Six consultees 30opposed the view that the injured person should be entitled to opt for private care and accommodation. They argued that to require the responsible person to pay for private care, where local authority provision is available, would be excessive and would go beyond restitution. They also noted that it can reasonably be assumed that the injured person will be able to access local authority care indefinitely, whereas private care will only continue for as long as the injured person can meet the associated costs. Utilising local authority provision, then, reduces the risk of the injured person receiving inadequate compensation for their care requirements.
3.113 Kennedys Law and MDDUS recommended an alternative approach. Kennedys Law said that there should not be an automatic entitlement to private care, but neither should it be automatically excluded. Instead, each case should be assessed on its own merits to determine what is reasonable, having regard to the availability and quality of local authority care and the cost of private care. Similarly, MDDUS suggest that the default position should be to consider the availability of local authority provision. Only if it is then found that the injured person’s needs cannot be fully met through that provision should there be consideration of supplementing this with private care and accommodation.
3.114 Question 15 asked consultees if they had any additional comments. Only two consultees responded to this question. The University of Aberdeen School of Law were of the opinion that, in the interests of consistency and clarity, the law on the recovery of costs for medical treatment and the law on the recovery of costs for care and accommodation should, as far as possible, be harmonised. 31The Senators of the College of Justice, on the issue of double recovery, expressed their agreement with the opinion of the Law Commission of England and Wales that there is not a high risk that injured person will claim damages for private services they will not actually utilise, 32and, in any case, the Senators were of the opinion that this is a matter than can be regulated effectively by the courts.
Discussion
3.115 Question 13 asked consultees if they agreed with the general principle that it is the responsible person, and not the state, who should bear the cost of the injured person’s care and accommodation needs. Question 14 asked consultees if the injured person should be entitled to opt for private care rather than rely on local authority provision. Question 15 asked consultees if they had any further comments to add.
3.116 We note the considerable support among consultees in favour of (i) the proposition that it is the responsible person who should pay for the injured person’s care and accommodation costs (with only four of 28 respondents expressing disagreement), and (ii) the proposition that the injured person should have the option of private care and accommodation (with eight of 28 respondents expressing disagreement).
3.117 As some consultees noted, a basic principle of the law of delict is that it is the responsible person who should bear the burden of compensating the injured person for their loss. An approach to the provision of care and accommodation which places the burden on the state, rather than the responsible person, absolves the responsible person of their obligation to account to the injured person for their loss.
3.118 Another issue raised by consultees is the disparity in the kind and quality of care and accommodation (i) as between local authorities and the private sector and (ii) as between individual local authorities. A number of consultees said that an injured person should not be disadvantaged by virtue of living in an area where the local authority has fewer resources and therefore an inferior ability to provide adequate care and accommodation. We also note the view, expressed by Digby Brown and by APIL, that even well-funded local authority care and accommodation is often unable to cater to the needs of individuals with personal injuries.
3.119 However, six consultees disagreed with the proposition that an injured person should be entitled to opt for private care and accommodation. Consultees said that allowing an injured person to opt for private care and accommodation in all instances would mean that some claimants are overcompensated, as the damages they receive would go beyond what is reasonable and necessary to achieve restitution. Consultees also referred us to the fact that it can reasonably be assumed that the injured person will be able to access local authority care indefinitely, whereas private care will only continue for as long as the injured person can meet the associated costs.
3.120 We note the merit of these two arguments, and we find particularly persuasive the suggestion that funds for private care and accommodation may deplete. Private care and accommodation can be costly, and we recognise that an award of damages may not suffice for private care if the period of care lasts for longer than expected, or if there is an unforeseen increase in the cost of care, or if the injured person’s damages are reduced due to contributory negligence. However, we place more emphasis on the view of the majority of consultees that to deny injured persons the freedom to opt for private care and accommodation is unreasonably restrictive, when considering the disparity in the availability and quality of local authority provision. For these reasons, we recommend that the injured person has a statutory right to opt for private care and accommodation where it is available, similar to the current position on private medical treatment.33
3.121 Two consultees, the University of Aberdeen School of Law and the Senators of the College of Justice, offered further comments in response to Question 15.34 These responses were very helpful when we were considering the issues around Questions 13 and 14 and have been taken into account in our recommendations.
3.122 In respect of Question 13, we are of the view that the default position that the responsible person should pay for the cost of the injured person’s care and accommodation should be retained and enforced.
3.123 In respect of Question 14, we recommend that:
(Draft Bill, section 4)
3.124 In our Discussion Paper,35 we discussed three possible models of reform to give effect to the policies we set out at paragraph 3.102 above,36 allowing for the fact that some injured persons will receive local authority care and accommodation and others will make use of the private sector.
3.125 The first two models are applicable where the injured person receives care or accommodation from a local authority; the final model is concerned with avoiding double recovery where the injured person receives private care or accommodation.
Model one
3.126 The first model is that the injured person pays for local authority care and accommodation, and the award of damages covers the cost of making those payments.
3.127 In terms of quantification of damages, this is a straightforward model, provided that the local authority has the necessary statutory entitlement to charge for the care and accommodation it provides.
Model two
3.128 The second model is that the injured person receives but does not pay (or at least does not pay the true cost) for local authority care and accommodation, and an award of damages is made to the local authority to cover the cost of providing it.
3.129 This would bear some similarity to the regime for medical treatment introduced by Part 3 of the Health and Social Care (Community Health and Standards) Act 2003, under which a person who makes a compensation payment to an injured person is also liable to pay the NHS for the cost of treatment provided to that person.37
Model three
3.130 Where the injured person opts for private care or accommodation, allowing the injured person to recover the costs of that care or accommodation in an award of damages 38raises the issue of double recovery, 39since an injured person receiving private care has not waived any entitlement to seek support from a local authority.
3.131 At present, in each individual case it is a matter for the judge to form a view, based on the available evidence, on whether the injured person is in fact going to make use of private facilities or public ones. Even leaving aside the case of an injured person who embellishes their evidence, or misleads the court about their true intentions, the judge will still face difficulties in calculating the true cost of private care and accommodation: what facilities will be available in years to come, either through local authority or private provision; how should the judge assess what kind of facility is likely to be most appropriate for the injured person many years after the date of the proof; what account should be taken of the possibility that the injured person may have to move from private to public facilities (perhaps because of a shortage of funds) or from public to private (perhaps because of a shortage of available services)?
3.132 We note that section 3 of the Damages (Investment Returns and Periodical Payments) (Scotland) Act 2019 (which is not yet in force) may be useful in combatting some of these issues. Section 3 will, if brought into force, (i) require the court to consider making an order that damages be paid by periodical payments, rather than by a lump sum, where those damages are for future pecuniary loss40 in respect of personal injury and regardless of any agreement between the parties concerning periodical payments;41 and (ii) allow the court to vary the amount of damages payable under periodical payments or to suspend the pursuer’s right to the periodical payments.42
3.133 If it were to become usual for damages to be paid by periodical payments rather than by a lump sum, the court would have more flexibility to amend the award based on the pursuer’s need for, and use of, private care and accommodation over their lifetime. However, periodical payments are not a panacea: it may involve continued court oversight, and give rise to continued litigation, many years after the initial case has been brought.
Responses to the Discussion Paper
3.134 In our Discussion Paper, we asked consultees:
“16. Do you favour all, some or none of the following options?
(a) the award of damages to an injured person who opts for local authority provision should include the cost of making any payments levied by the local authority for that provision;
(b) where an injured person receives but does not pay for local authority care and accommodation, an award of damages should be made to the local authority to cover the cost of providing it;
(c) where an injured person opts for private care and accommodation, and the award of damages covers the cost of obtaining it, provision should be made to avoid double recovery by, for example, having some procedure equivalent to that in the English Court of Protection.
17. Have you any other suggestions for reform in this area?”
3.135 Thirty-four consultees responded to these questions. Some consultees advocated for more than one option, but ten were most in favour of Option A,43 six most in favour of Option B,44 and nine most in favour of Option C.45 Nine consultees expressed an alternative view.46
Option A
3.136 Two main rationales were advanced in support of Option A. Clyde & Co suggested that this approach would have the effect of reimbursing direct expenditure by the injured person that would not have been incurred but for the accident which results in their injury.
3.137 The Forum of Insurance Lawyers suggested that Option A represents the equitable implementation of the general principle of restitutio in integrum.47 However, they said that charges under Option A should be reasonable, proportionate, and should be subject to assessment by a third party if required. In partial support of Option A, NFU Mutual expressed a similar sentiment: they stated that Option A is an attractive equitable solution, but that it required that schedules of charges be subject to review by an external expert, ensuring that the reasonableness and proportionality of the schedule is properly considered.
3.138 On the other hand, Aviva Insurance and the Forum of Scottish Claims Managers criticised Option A on the ground that it ignores the issue of contributory negligence. Additionally, they expressed concern about a lack of oversight of the reasonableness of the payments levied by the local authority.
Option B
3.139 Only one consultee in support of Option B provided reasoning for that support. The University of Aberdeen School of Law said that Option B would “bring the approach to care and accommodation broadly in line with the regime for medical treatment” found in Part 3 of the Health and Social Care (Community Health and Standards) Act 2003.
3.140 However, a number of consultees expressed their opposition to Option B. Aviva Insurance, the Association of British Insurers, the Forum of Scottish Claims Managers, and NFU Mutual wrote that Option B ignores the policy principle that local authority provision should be accessible and adequate regardless of the cause of the injury, although none of the consultees told us what they mean by this or how Option B, as proposed, undermines the accessibility of local authority care. The Forum of Insurance Lawyers submitted that if an injured person has not sustained a loss, and the local authority is not seeking reimbursement, there is no basis to extend the scope of an award of damages. Clyde & Co said that Option B would have an “undesirable” effect on the affordability of insurance products.
3.141 Kennedys Law raised a number of concerns with Option B: that it would be difficult and costly for the local authority to calculate the cost of the care they provided to the injured person; that, as the local authority would not be charging commercial rates or operating for profit, the appropriate charge to the responsible person would be unclear and open to dispute; and the local authority’s assessment of what it is required to provide to the injured person may be different from the court’s assessment of what is reasonable.
Option C
3.142 Aviva Insurance and the Forum of Scottish Claims Managers supported Option C but submitted that it was “imperative” to have some procedure, such as the English Court of Procedure, to avoid double recovery. Direct Line Group suggested that this Option is the preferable one, as established case law from the Court of Protection would set out the appropriate test for assessing an injured person’s needs and what is reasonable to meet those needs. Stagecoach Group said that Option C is the best method for ensuring that the pursuer receives appropriate and adequate care and accommodation while avoiding double recovery.
3.143 A number of consultees were unconvinced that there was a case for the introduction of a mechanism, modelled on the Court of Protection, in Scotland.
3.144 The Association of British Insurers said that, while it is imperative that provision should be made to avoid double recovery, it does not necessarily follow that having a procedure entirely equivalent to the Court of Protection is the most efficient and cost-effective way of achieving this. NFU Mutual noted that the Court of Protection makes decisions on financial and welfare matters for people who lack mental capacity, and that the majority of cases would not require this form of oversight. Horwich Farrelly Scotland raised their concerns that a mechanism similar to the Court of Protection would “erode the comfort of the finality of litigation in order for parties to arrange their affairs and would likely protract disputes at increased cost.”
3.145 Thompsons Solicitors and Unite the Union, while noting that the establishment of a body equivalent to the Court of Protection would require further consultation, suggested that there may be potential merit in such a court, as the present uncertainty over whether an injured person will incur the cost of future care and accommodation ultimately, more often than not, leads to under-compensation rather than any potential for double recovery.
3.146 However, the Senators of the College of Justice and the Law Society of Scotland considered this Option to be unnecessary, as they contend that there is no issue of double recovery in Scotland. The Senators said that if the matter ever arose it could be effectively regulated by the courts, but that in any case the problem of abuse and double recovery was more theoretical than real in the Scottish jurisdiction.
Other suggestions
3.147 Several consultees expressed their discontent with all three Options offered as part of this question, a few of whom provided alternatives.
3.148 The Association of Personal Injury Lawyers suggested that the starting position should be that where private provision is required it should be paid for by the responsible person. If local authority provision is required further down the line, then at that point funds should be made available by the defender to make that provision, in line with the particular local authority’s processes.
3.149 Drummond Miller said that:
“Where an injured person receives local authority care then in [the] same way as defenders/insurers must pay certain recoverable benefits (CRU) they ought to pay the local authority back for that care. However, the onus should be on the defenders/insurers and not the injured person to deal with such payments and it should not be relevant to the pursuer’s claim (in the same way as CRU is). It should not form part of the award/value of the claim where the care provided for has not been charged.”
3.150 The Forum of Insurance Lawyers stated that they would not object to a change in the law which enables local authorities, at the point of conclusion of a damages claim, to recover their past expenditure relating to the injuries that were the subject of the claim.
3.151 No consultees had any further suggestions for reform, in response to Question 17.
Discussion
3.152 We note that despite the number of consultees who responded to this question, no majority arose in favour of any of the Options we put forward in our Discussion Paper. In addition, a considerable number of the consultees who responded to this question did so in opposition to all three of the Options posed, offering their own solutions instead.
3.153 Option A places a significant burden on the injured person by requiring them to pay the local authority directly out of an award of damages. It may be difficult under such an arrangement for the injured person to identify the costs of local authority care. Even where costing exercises were carried out, pursuers would be faced with the challenge of identifying which local authorities, if any, provide care which is affordable based on the award of damages.
3.154 Similar issues arise with Option B. It would require that local authorities be provided with the resources to calculate their expenditure on injured persons’ care and the means to pursue responsible persons. In some cases this may require the local authority to intervene in litigation, raising additional costs and likely prolonging what can already be lengthy cases.
3.155 In terms of Option C, our position has evolved since the Discussion Paper. Based on what we heard from consultees, we now place less emphasis on the third policy set out in paragraph 3.102 as we are not convinced that there is any significant risk of double recovery becoming a feature of damages claims in Scotland. We note that neither the Senators of the College of Justice nor the Law Society of Scotland were concerned about double recovery and, while other consultees raised it as an issue, we have not received any evidence of circumstances in which a pursuer was overcompensated because of an award for private care and accommodation, nor have we been made aware of any Scottish case in which double recovery was an issue. We therefore agree with the Senators that, unless there is evidence to the contrary, the issue of double recovery can be effectively regulated by the courts. We are not recommending the creation of some form of Court of Protection.
3.156 It remains our position that the general principles in this area of law are that an injured person is entitled to the reasonable costs of care and accommodation; that the responsible person rather than the state should meet those costs; that the injured person is entitled to opt for private or for public provision of care and accommodation; and that in making an award of damages the court should seek to guard against the risk of double recovery.
3.157 However, it is worth reflecting on the difficulties inherent in devising a regime which deals effectively with policy goals which may pull in different directions: that the responsible person rather than the state should pay and that local authorities should perform their statutory duties. Accordingly, we have concluded that reform in this area - while desirable - is a matter of policy that would have considerable impact on local authorities, on the insurance industry, and on the courts. For these reasons, we are of the view that reform is a matter for Scottish Ministers.
3.158 We therefore recommend that:
And some medical treatments, such as emergency or complex surgery, are unavailable privately; in these cases, the injured person has no choice but to use the NHS.
Action on Asbestos, Stuart McMillan MSP, Thompsons Solicitors, and Unite the Union.
Clyde & Co and the Forum of Insurance Lawyers (FOIL).
Section 2(4) of the Law Reform (Personal Injuries) Act 1948 directs the court that, where the injured person has opted for private medical treatment, the court should disregard the possibility of taking advantage of NHS treatment in assessing whether the injured person has taken reasonable steps to mitigate their loss. For discussion, see paras 3.67-3.82 above.
See paras 3.80-3.92 of the Discussion Paper for a full consideration of these cases.
[2004] EWCA Civ 1370, [2005] 1 WLR 2129.
Ibid, para 94 per Longmore LJ.
[2007] EWCA Civ 71, [2007] 1 WLR 923.
[2009] EWCA Civ 145, [2010] QB 48.
See e.g. Coombs v North Dorset NHS Primary Care Trust [2013] EWCA Civ 471, [2014] 1 WLR 111, para 11.
See also McGregor on Damages, paras 41-196-41-197.
See [2010] QB 48, paras 56-66.
McGregor on Damages, para 41-261 (footnote references omitted).
Discussion Paper, paras 3.75-3.78.
Action on Asbestos, the Association of British Insurers, the Association of Personal Injury Lawyers (APIL), Aviva Insurance, Ronald Conway, Digby Brown, Drummond Miller, the Faculty of Advocates, the Forum of Complex Injury Solicitors (FOCIS), the Forum of Insurance Lawyers (FOIL), the Forum of Scottish Claims Managers, Horwich Farrelly Scotland, Kennedys Law, the Law Society of Scotland, Tom Marshall, Stuart McMillan MSP, NFU Mutual, the Senators of the College of Justice, the Society of Solicitor Advocates, Stagecoach Group, Thompsons Solicitors, Unite the Union, and the University of Aberdeen School of Law.
Clyde & Co, DAC Beachcroft, Direct Line Group, and the Medical and Dental Defence Union of Scotland (MDDUS).
Under s 1 of the Law Reform (Contributory Negligence) Act 1945, where the judge or jury find that the injured person’s negligence contributed to their loss, the award of damages will be reduced commensurately. For example, if the injured person is found to have contributed to their loss by 40%, the award of damages will be reduced by 40%. The effect of such a deduction is that where damages had been calculated in order to cover the cost of private care and accommodation, the actual award made by the court may be insufficient to meet that cost. For fuller discussion, see para 3.79 of the Discussion Paper.
Action on Asbestos, the Association of Personal Injury Lawyers (APIL), Clyde & Co, Ronald Conway, DAC Beachcroft, Digby Brown, Direct Line Group, Drummond Miller, the Faculty of Advocates, the Forum of Complex Injury Solicitors (FOCIS), Horwich Farrelly Scotland, the Law Society of Scotland, Tom Marshall, Stuart McMillan MSP, the Senators of the College of Justice, the Society of Solicitor Advocates, Thompsons Solicitors, Unite the Union, the University of Aberdeen School of Law, and Zurich Insurance.
The Association of British Insurers, Aviva Insurance, the Forum of Insurance Lawyers (FOIL), the Forum of Scottish Claims Managers, NFU Mutual, and Stagecoach Group.
Kennedys Law and the Medical and Dental Defence Union of Scotland (MDDUS).
DAC Beachcroft, the Faculty of Advocates, and the Senators of the College of Justice.
[2009] EWCA Civ 145, [2010] QB 48. For discussion, see paras 3.100-3.102 above.
See paras 3.67-3.82 above on private medical treatment.
The Association of British Insurers, Aviva Insurance, the Forum of Insurance Lawyers (FOIL), the Forum of Scottish Claims Managers, NFU Mutual, and Stagecoach Group.
See paras 3.83-3.92 above on the recovery of costs for medical treatment.
(1999) Law Com No 262, paras 3.5-3.10.
See paras 3.94-3.101 of the Discussion Paper.
First, that an injured person is entitled to have their loss made good and that may include the cost of private care and accommodation; second, that while local authority provision should remain available under the various statutory schemes, the default position should be that the responsible person pay the costs of care and accommodation; and third, that the corollary of the second policy is that there requires to be some mechanism for avoiding double recovery.
For discussion of the 2003 Act, see para 3.82 above.
As we recommend in Recommendation 14, at para 3.125 above.
Because of the need for private care and accommodation to continue over a prolonged period - perhaps over the injured person’s entire life - the issue of double recovery is much more pronounced than it is in the case of private medical treatment.
“Pecuniary” loss is the economic loss resulting from the delict. This includes care and accommodation expenses, medical expenses, loss of wages etc.
Damages (Investment Returns and Periodical Payments) (Scotland) Act 2019, s 3(1). Under the current law, the court may only make an order for periodical payments with the agreement of the parties - Damages Act 1996, s 2(1). Such agreement is rarely forthcoming - see Wells v Wells [1999] 1 AC 345, p 384 per Lord Steyn; D’s Parent and Guardian v Greater Glasgow Health Board [2011] CSOH 99, 2011 SLT 1137, para 4 per Lord Stewart.
Damages (Investment Returns and Periodical Payments) (Scotland) Act 2019, s 4 inserting new ss 2E, 2F, 2G and 2H to the Damages Act 1996.
Clyde & Co, Ronald Conway, Digby Brown, the Forum of Insurance Lawyers (FOIL), Kennedys Law, the Medical and Dental Defence Union of Scotland, Stuart McMillan MSP, the Senators of the College of Justice, Thompsons Solicitors, and Unite the Union.
Horwich Farrelly Scotland, Stuart McMillan MSP, the Senators of the College of Justice, Thompsons Solicitors, Unite the Union, and the University of Aberdeen School of Law.
The Association of British Insurers, Aviva Insurance, Clyde & Co, Direct Line Group, the Forum of Insurance Lawyers (FOIL), the Forum of Scottish Claims Managers, Stuart McMillan MSP, Stagecoach Group, and Zurich Insurance.
The Association of Personal Injury Lawyers (APIL), DAC Beachcroft, Drummond Miller, the Faculty of Advocates, the Forum of Complex Injury Solicitors (FOCIS), the Law Society of Scotland, Tom Marshall, NFU Mutual, and the Society of Solicitor Advocates.
i.e. restoring a person who has been injured as a result of negligence back into the position they would have been in had the injury not occurred.