The Damages (Scotland) Bill

The recently published Scottish Law Commission Report on Damages for Personal Injury contains important proposed reforms, intended to modernise Scots law and resolve certain difficulties.

The Damages (Scotland) Bill, appended to the recently published Scottish Law Commission Report on Damages for Personal Injury (Scot Law Com No. 266), contains some important proposed reforms which are intended to modernise Scots law and resolve certain difficulties. The Report recommends the amendment of three statutes: the Prescription and Limitation (Scotland) Act 1973;  the Administration of Justice Act 1982;  and the Children (Scotland) Act 1995. 

Provisional damages, pleural plaques, and time-bar (section 1)

Exposure to asbestos can cause symptom-free conditions, in particular pleural plaques and some forms of pleural thickening and asbestosis.  The same exposure can cause a subsequently-developing, much graver, condition (such as mesothelioma) which appears many years later.  A combination of the 1973 Act, the 1982 Act, the Damages (Asbestos-related Conditions) (Scotland) Act 2009, and a Court of Session decision Aitchison v Glasgow City Council[1] has resulted in an unwelcome and unforeseen consequence, namely a time-bar problem which prevents some asbestos-related disease sufferers and their families from recovering damages for negligent exposure.

As explained in the Report, the symptom-free condition starts the triennium clock ticking.  For example, if pleural plaques are diagnosed in 2015, the triennium expires in 2018.  As the law currently stands, attempting to raise an action of damages for mesothelioma which developed in 2030 will be time-barred.  The time-bar affects not only the injured person, but also (in fatal cases) their bereaved relatives – with only one statutory exception[2] for fatal cases of mesothelioma, and even then, if the deceased had failed to raise an action within the triennium, their relatives can recover damages only in respect of loss of society, and not loss of support or loss of services.

The current law therefore results in unfairness, as:

• Many injured persons, understandably, do not raise an action based on negligence for an asymptomatic condition. If advised about the condition – and in some cases, the doctor may not even mention the condition – the patient may receive purportedly comforting advice (“This condition won’t cause you any trouble”), and the patient may be unaware that the asbestos-exposure time-clock has started ticking.  Alternatively the patient may be more concerned about an unrelated problem diagnosed at the same time, such as COPD (chronic obstructive pulmonary disease) or kidney cancer.
• Injured persons who do raise an action on learning of the existence of the asymptomatic condition may not include a request for provisional damages, which would entitle them to return to court in the future seeking further damages if a subsequent more serious condition develops. Alternatively although they seek provisional damages, they are tempted to accept what appears at the time to be a significant sum in final settlement.
• In any event, the option of provisional damages is not always available: the defender must either be insured, or be a public authority.[3]
• The discretionary power to override a time-bar, vested in the court by section 19A of the 1973 Act, can result in very different outcomes despite apparently similar factual backgrounds.[4]
• The pattern of a “warning flag” raised by an asymptomatic condition, followed by many untroubled years until a much more serious symptomatic condition emerges, appears to be unique. Few (or no) other injuries or diseases have the same pattern.

The draft Bill aims to provide a focused statutory solution for the unforeseen and unintended consequence resulting in unfairness to persons suffering negligent exposure to asbestos.  A more general review of limitation is planned as a later project for the Scottish Law Commission, all as outlined in the Eleventh Programme.

The focused reform is contained in new sections 17ZA and 18ZZA, to be inserted after sections 17 and 18 of the 1973 Act.  Example cases are outlined in Appendix D of the Report.  The aims of the reform are:  first, where a pursuer has developed a symptomatic asbestos-related disease such as mesothelioma or some other asbestos-induced cancer, and raises an action for damages for personal injury, that pursuer will not be deemed time-barred by the earlier existence of pleural plaques or asymptomatic pleural thickening or asymptomatic asbestosis.  Secondly, where such a person dies, his relatives will be able to recover damages for the death.

Extension of section 8 necessary services to non-relatives (section 2)

Damages for necessary services rendered to an injured person were introduced by section 8 of the Administration of Justice Act 1982.  “Services” include nursing, visiting, counselling, housekeeping, ironing, cooking, washing, and shopping.  Currently, only “relatives” as defined in section 13 of the 1982 Act are entitled to damages for such services.  (The injured person recovers the damages and passes them on to the relative.)

More than forty years have passed since the 1982 Act.  Society has changed, and family relationships and bonds have become more scattered and geographically distant.  As a result it is quite often a friend or neighbour who renders the necessary services.  Section 2 of the Damages (Scotland) Bill seeks to recognise this societal change by extending the entitlement to damages for necessary services to the individual who renders them, whether or not a relative.

Permanent health insurance schemes:  Gaca and Lewicki (section 3)

Many employers arrange permanent health insurance (PHI) schemes covering the prolonged absence of an employee. The employer makes a claim from the insurance company, and then makes payments under the scheme to the absent employee.  Where the employee is claiming damages for negligence, including damages for wage loss, should the PHI payments be deductible when calculating the damages?  An English Court of Appeal decision (Gaca) ruled that they are deductible; a Scottish Inner House decision (Lewicki) ruled that they are not.

There has been a continuing and unresolved debate about which case should be followed, or whether the two cases are reconcilable.  Section 3 of the Damages (Scotland) Bill cuts through the debate and reflects the overwhelming majority view expressed by consultees, namely:  where an employee has contributed financially to the scheme, any payments received under the scheme should not be deductible from the employee’s damages for personal injury. 

A “financial contribution” may take the form of a direct money payment (for example, a regular deduction shown on a wage slip);  or additional tax or national insurance contribution reflecting the benefit provided by the scheme;  or the fact that the employee has foregone higher wages in order to benefit from the scheme.

Private medical treatment, care, accommodation, and equipment (section 4)

Section 2(4) of the Law Reform (Personal Injuries) (Scotland) Act 1948 is a long-established provision confirming that an injured person is entitled to seek private health care despite the availability of medical treatment under the National Health Service.  A similar common law principle applies to care, accommodation, and equipment.  Section 4 of the Damages (Scotland) Bill simply confirms the current position, and provides one statutory source affirming that the injured person is entitled to seek medical treatment, care, accommodation and equipment from the private sector despite the availability of certain medical treatment, care, accommodation, and equipment from the NHS, local authorities, or other publicly-funded sources.  Section 4 replaces section 2(4) of the 1948 Act.

Extending the meaning of “relative” (section 5)

As the Damages (Scotland) Bill offers a suitable vehicle for any necessary reforms of the concept of a “relative”, consultees were asked to give their views about 21^st century family structures.  What emerged from the consultation was a desire to include the following persons in the definition of “relative”:

• A former cohabitee or partner of the injured person.
• Someone who was accepted into family as a sibling of the injured person.
• Someone who was accepted into family as a grandchild of the injured person.
• Someone who was accepted into family as a parent or a grandparent of the injured person.

Supervision of damages payable to children (section 6)

There has been growing awareness of the potential vulnerability of injured children who are recipients of awards of damages.  The basic premise is of course that parents and guardians seek to achieve the best outcome for an injured child.  However there may be cases where inexperience in handling large capital sums, or conflicting interests, or lack of advice, may hamper the arrangements being made for the child.  Management of any award can be particularly important where it is intended to provide for the child’s future care and accommodation.  The setting up of a trust might be envisaged, in which case the terms of the trust deed, and the identity and qualifications of the trustees, might be important for the child’s wellbeing.  The proposed new procedure places a duty on the court to consider a written proposal outlining how the damages are to be invested, administered, and applied for the benefit of the child.  A remit to the Accountant of Court is envisaged, and where no such remit is made, the court has a duty to lodge a written report, explaining why a remit was thought unnecessary.

Ultimate aim

The proposed reforms are intended to modernise the Scots law of damages for personal injury; to resolve some areas of difficulty and unfairness;  and to facilitate and make more transparent the calculation and management of damages for personal injury.  

Written by Lady Paton, Chair of the Scottish Law Commission.

[1] [2010] CSIH 9;  2010 SC 411.

[2] Damages (Scotland) Act 2011, s 5.

[3] 1982 Act, s 12(1)(b).

[4] See Quinn’s Exr v Wright’s Insulations Ltd [2020] CSOH 21, 2020 SCLR 731 and Kelman v Moray Council [2021] CSOH 131, 2022 Rep LR 64.