Faculty welcomes bill bringing damages reforms

The bill giving Scottish courts the power to order damages awards to be paid periodically, and changing the way the personal injury discount rate is set, has been welcomed by the Faculty of Advocates.

Responding to the stage 1 consultation on the Damages (Investment Returns and Periodical Payments) (Scotland) Bill, Faculty described the periodical payments power as a “long overdue reform”. It also agreed that legislation was required in relation to the discount rate.

Currently, unlike in England & Wales, courts in Scotland can only make a periodical payments order when both parties consent.

"We have no doubt that it is necessary to provide Scottish courts with the power to order damages to be paid by way of periodical payments orders. We think that the draft provisions provide a reasonable basis to allow this long overdue reform to be made", Faculty states.

"We think that particularly where there is a significant dispute between the parties relative to life expectancy, the ability to make a periodical payments order will be attractive and will be used."

In relation to the discount rate, which aims to reflect the investment returns to be expected on a lump sum award of damages for future loss, Faculty said: "We agree that a statutory methodology for calculating the discount rate is necessary. We also agree that establishing a timeframe for regular review of the discount rate is essential.

"We find it difficult to comment upon some of the specific provisions such as the standard adjustments and the composition of the notional investment portfolio. We would defer to expert professional opinion.

"The key point is that someone who has been catastrophically injured and who is in need of permanent round the clock care should not be required to take any significant risk with investment to meet those anticipated needs."

In response to a specific question whether the bill managed to balance pursuer and defender interests – on a subject which tends to polarise opinion – Faculty said that as an independent body whose members regularly advised both interests, "Our general impression is that, subject to the matters which we would defer to expert professional opinion, the bill balances the interests of parties."

Click here to view the full response.