In December 2024 the Scottish Law Commission ('SLC') published its report on Damages for Personal Injury. The recommended changes are directed at modernising the damages regime in Scotland, specifically with the aim of increasing transparency in the calculation and management of damages.
The report covers four key areas namely (1) Awards for damages made for services and the definition of "relative" for such claims; (2) Deductions from damages; (3) Provisional damages and (4) Awards made to children.
The potential impact of the proposed reforms on parties involved in personal injury litigation, is considered below.
Damages for Services
Damages for "necessary" and "personal services" are currently determined with reference to the Administration of Justice Act 1982.
That approach has been criticised for failing to allow damages where the services have been provided to the injured person by someone not in their 'traditional' family. It is argued that there have been significant social changes since 1982 and that the law should reflect that. In England & Wales it is not necessary for the person providing services to have any particular relation to the injured person.
The SLC propose to extend the definition of "relative" to include certain persons accepted into the family and former cohabitants. Likewise, those who provided necessary services (e.g. friends or neighbours) should also be entitled to damages. If the SLC proposals are implemented, services rendered by any person would be recoverable so long as they were provided without a contractual right to payment. In practice the broadening of the definition of relative will likely lead to an increase in services claims being made.
Deductions from damages
Universal credit
The report highlights difficulties connected with the introduction of Universal Credit. By its nature Universal Credit is not broken down into discrete payments for particular needs. Accordingly, where Universal Credit is included on a Certificate of Recoverable Benefits ("CRU"), it is not possible for compensators to determine how much of the total liability can be offset against the injured person's damages.
The SLC was unable to make a recommendation for changes to the CRU regime as it is managed by the Department for Work & Pensions ("DWP"). However, the SLC comments may prompt the DWP to make changes to address the concerns.
Recovery of NHS costs
Although section 150 of the Health and Social Care (Community Health and Standards) Act 2003 currently imposes a liability on "the responsible person" (typically the defender) in personal injury actions for charges incurred for NHS treatment, there is currently no liability where the injury is industrial disease.
The SLC recommends that liability is extended to include claims for industrial disease on the basis that this would "allow reallocation of NHS resources away from the (often long-term) treatment of industrial disease to other departments in need of additional funding." Such reform will see the cost of disease claims increase.
PHI Schemes
In terms of section 10 (a) of the Administration of Justice Act 1982 it is not currently possible to offset payments from permanent health and similar insurance schemes against damages where the injured person has contributed to the scheme before the accident. There is however a lack of clarity on what is or isn't a contribution. The SLC recommends that the definition of contribution is clarified.
Provisional damages and asbestos-related disease
Subject to exceptions, pursuers are 'time-barred' from bringing claims for damages three years after the development of an asbestos-related disease caused by negligent exposure to asbestos. At present, the limitation period runs from the date of diagnosis of pleural plaques, pleural thickening or asbestosis, even if it is asymptomatic. If an injury party then develops the more serious condition/s such as mesothelioma or asbestos-induced cancer, their claim may be time-barred as a result of the earlier diagnosis.
It has been argued that the current law is uncertain, unpredictable, inconsistent and unfair. The SLC recommends that the Prescription and Limitation (Scotland) Act 1973 is amended to distinguish asymptomatic and symptomatic asbestos-related conditions. A pursuer should not be precluded from raising an action for a symptomatic asbestos-related condition if their previous condition was asymptomatic. It also recommends that this exception applies to a relative's claim in the event of the injured person's death.
Awards of damages to children
Section 13 of the Children (Scotland) Act 1995 provides safeguards to offer protection for awards of damages made to children but it is rarely used in practice. Despite the infrequent use of Section 13, respondents to the SLC consultation and the SLC itself recognise the importance of safeguards to prevent misappropriation of funds intended for children.
The SLC recommends that the 1995 Act is amended to impose a duty on the court to inquire into the future administration of an award for a child, and, if necessary, to refer the matter to the Accountant of Court.
In practice, the pursuer's agent would be required to submit a form to the court outlining how the funds are to be invested and protected until the child reaches the age of 16. The court would have to consider (i) the level of damages awarded; (ii) whether damages should be placed in a trust; and (iii) future care and accommodation needs of the child.
Conclusions
The SLC seeks to modernise and clarify the existing law in Scotland. A draft Damages (Scotland) Bill was published alongside the report. The Bill will be referred to a lead committee within the Scottish Government. There is no current update as to the present position of the Bill and no clear timescale within which the changes will be made. Brodies will be following the progress of any proposed legislation and provide further updates in due course but if implemented the overall cost of personal injury claims in Scotland is likely to increase.
If you would like to find out more about any of the issues discussed above, please get in touch with our Insurance solicitors, or your usual Brodies contact.
