THE SCOTTISH LAW COMMISSION: DISCUSSION PAPER ON DAMAGES FOR PERSONAL INJURY (NO.174) – FEBRUARY 2022 – PART 2
As discussed within the first blog, the other topics covered within the Discussion Paper are: provisional damages, particularly in the context of asbestos-related cases, and management of damages for personal injury awards to children. This blog post will provide more detail in respect of these topics.
Provisional Damages and Asbestos-related disease:
Provisional damages were established by the 1982 Act (section 12). Albeit the Law Commission does not believe that there is a requirement for reform to provisional damages as a whole, they have outlined that asbestos-related claims specifically is an area which should be reviewed. At present, if negligent exposure to asbestos occurs, an individual has three years from the date which they became aware of pleural plaques, to raise an action (Prescription and Limitation (Scotland) Act 1973, s 17(2)(b)). As such, it is subject to the usual time-bar rules in personal injury. Should provisional damages be sought, then prior to reviewing quantum, liability is required to either be admitted or confirmed at Proof. However, pleural plaques are asymptomatic and this results in potential issues in regard to limitation. The Discussion Paper notes that the answer to this problem may be the discretion afforded to the court by s19A of the 1973 Act.
Management of damages awarded to children:
Whilst there are provisions within the Age of Legal Capacity (Scotland) Act 1991, which permit children under 16 to for example instruct a solicitor, sue, or defend in civil proceedings, generally speaking a claim for damages will be made on behalf of a child, by their parent or guardian. In such instances, damages will be paid to the parent or guardian.
In accordance with the Children (Scotland) Act 1995, section 13, the court has discretion when determining the management of damages awarded to children:
Section 13(1) “Where in any court proceedings a sum of money becomes payable to, or for the benefit of, a child under the age of sixteen years, the court may make such order relating to the payment and management of the sum for the benefit of the child as it thinks fit.” Notwithstanding this, an application can be made under s11(1)(d) for the administration of a child’s property, and an order under s13 has been made, then the court must consider the three fundamental principles, which are: the welfare of the child, the no order principle, and the views of the child.
The Discussion Paper welcomes responses in relation to the extent discretion afforded to the court. In particular, whether the court should take account of the factors required to be reviewed in light of applications under s11(1) of the 1995 Act, or whether s13 is sufficient, or whether there are ancillary points which should be considered. Under section 13, the options available to the court include: appointing a judicial factor, order the money to be paid to the sheriff clerk or the Accountant of Court, parent or guardian of the child, or order the money to be paid directly to that child. Overall, the Commission states they are of the view that court discretion within s13 should remain, with such application operating on a case-by-case basis. The Discussion Paper notes that the discretionary powers under s13 are a “wide discretionary power” (I v Argyll and Clyde Health Board 2003 at para  per Lord Carloway). The Discussion Paper goes on to discuss that it may be worthwhile to impose an obligation on the court, before granting decree, to review the future administration of the child’s damages and if suitable, to remit the case to the Accountant of Court in accordance with s13. Although ultimately, and as the Discussion Paper recognises, this would be within the remit of the Scottish Civil Justice Council and the Lord President to determine.
Further complexities arise with reference to trusts and whether the court’s discretion within s13 extends to placing damages in trust for a child. If it does extend, it would follow that the type of trust would be required to be specified. There is subsequently discussion of personal injury trusts (“PIT”) and whether independent oversight should be a requirement. There is uncertainty within s10 of the 1995 Act, especially in relation to application of parents and guardians setting up a PIT for a child. There is currently no independent oversight for personal injury trusts for personal injury damages awarded to children, including the choice of Trustee(s). Despite this, it is highlighted that this may not be necessary, at least not in all cases.
The Discussion Paper outlined various insightful areas for potential reform. The Commission is now tasked with reviewing the Consultees’ responses, which will formulate the findings of their final Report. This will outline recommendations to be reviewed by the Scottish Parliament. It will be interesting to witness how the Discussion Paper is received and the wider practical impact upon the legal and insurance sectors. At Gildeas, we may be presented with further opportunities, including extending the types of cases we are involved in, as well as broadening our client base. In turn, this could result in advancing even more novel and effective ways of carrying out business.
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