Higher court awards are expected for catastrophic injury cases
Higher damages awards for people who suffer catastrophic injuries are expected, following a court decision upholding €15.9m in compensation for a boy left brain damaged.
The unanimous ruling of the three-judge appeal court has significant implications for the HSE, the State and the insurance industry, according to legal sources.
However, it is likely to be appealed by the HSE to a seven- judge Supreme Court.
The HSE had urged the Court of Appeal to reject the approach taken by the High Court when assessing €15.9m damages for a nine-year-old boy, Gill Russell.
Gill suffered brain damage at birth, has dyskinetic cerebral palsy and needs lifelong care.
Through his mother, Karen Russell, of Aghada, Co Cork, Gill sued the HSE alleging negligence in the circumstances of his birth at Erinville Hospital, Cork, on July 12, 2006.
It was claimed Gill was born after his mother had a symphiostomy and there was a "prolonged and totally chaotic" delivery. Liability was admitted, and the High Court was asked only to assess damages.
The High Court decision in Gill's favour was groundbreaking because it altered the assumption that the money, when invested, will gain interest at an annual rate of 3pc.
A discount to allow for that 3pc "real rate of return" was built into awards over the past decade.
However, the appeal court yesterday upheld Mr Justice Kevin Cross's decision to reduce the rate to 1.5pc, meaning a lower discount and hence higher awards.
Giving the appeal court's judgment, Ms Justice Mary Irvine said unless the rate was reduced, a catastrophically injured person would have to take "unjust and unacceptable" investment risks.
A seriously injured child should not be equated with an ordinary investor for purposes of deciding what should be a prudent investment, she added.
It was not the courts' function to inquire what a person was likely to do with their award for the purpose of deciding the sum of that award, she said.
The "sad fact" was neither this child, nor the HSE, would be in court had governments not failed over decades to enact laws allowing compensation be paid periodically.
The "frailty and injustice" of the "grossly outdated" lump sum system of compensation remains in place. The court urged the Oireachtas to end that system.
A separate hearing will take place later of the HSE's appeal concerning the annual sum the boy is likely to require throughout his life to meet ongoing care and other ancillary needs.
Solicitor Ernest Cantillon, representing Gill and his family, said Karen Russell "is relieved that she can know with certainty Gill will have sufficient funds to provide for his care in the future".
This decision applied only to a small number of catastrophically injured persons and should not be regarded as "a windfall" but rather "a vindication of the rights of the most vulnerable", he said.