Submissions to the Consultation Paper on Periodical Payments for Future Pecuniary Loss in Personal Injury Cases
10 September 2018
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- The Consumer Council (the Council) appreciates the opportunity to comment on the Consultation Paper on Periodical Payments for Future Pecuniary Loss in Personal Injury Cases (“Consultation Paper”) issued by the Law Reform Commission (“LRC”) in April 2018.
- We set out below our views on the issues raised in the Consultation Paper.
- In principle, the Council is in favour of the LRC’s proposal that the court should be given, by way of legislation, the power to make periodical payment orders in respect of damages for future pecuniary loss in personal injury cases (“PPO”). This proposal should help address some of the problems currently faced by plaintiffs when an order for a lump sum award is made for future pecuniary loss as there could be either under compensation or over compensation of the injured person.
- The Council supports the proposal to set up an authority empowered to fix and conduct periodical revision of the Discount Rate and also the selection of multiplier. The Council also supports the proposal that the Chief Justice be the authority as long as he/she exercises the power in consultation with 1) the relevant government and/or statutory authorities with the skills and expertise to make recommendations in this aspect; and 2) stakeholders involved in the payment of the awards or in the provision of the medical or nursing care of the injured. In addition to the stakeholders mentioned in the LRC consultation paper, views from bodies such as the Medical Protection Society, or any similar bodies for Chinese medical practitioners/ nurses and dentists should also be ascertained.
- The Council recognises the need to review the Discount Rate to mitigate the risk of over or under compensation. It is proposed that the review be performed at regular intervals. Having said that, the Chief Justice or the relevant authority as the case may be, should be empowered to instigate earlier reviews if that is deemed necessary in the circumstances. This would ensure that there is certainty in relation to the timing of review of the discount rate yet allow flexibility to accommodate unforeseen drastic changes of economic realities.
- In order to safeguard the plaintiffs’ interest due to the potential existence of imbalance in bargaining power, the court should have the power to award PPOs irrespective of the consent of the parties to the proceedings. Having said that, when exercising this power and determining which is the more appropriate order to make, the court should take into account the parties’ views and wishes. This power should be vested widely and not be limited to a specific class of personal injury cases at this stage. The Council considers that it should be the duty of the court to make a PPO to best meet the needs of the claimant which would depend on the circumstances of each case. As such, the Council proposes that the court should have the discretion on which head(s) of claim be included in the PPOs. This would be consistent with the court’s power to award PPOs irrespective of the consent of the parties to the proceedings proposed by the Council in the foregoing.
- As the aim of introducing PPO is to provide a mechanism for a fair assessment of damages over a long period of time, the Council takes the view that it is important that there is the ability to review the original PPO upon the application of either party to the proceedings. However, such review/variation should only be carried out in restricted circumstances relating to the events or the condition of the injured person as specified in the original order, only addressing contingencies which could be foreseen at the time of the trial or settlement.
- To prevent this review process from being a re-run of the original litigation or be seen as encouraging satellite litigation, the Council believes that the review mechanism should be made relatively straightforward, not only to save costs, but also to expedite the process, ensuring its effectiveness to both parties. It is proposed that the review process be regarded as an administrative process rather than a dispute resolution process. The Council proposes that the LRC consider a review mechanism based on a jointly appointed expert’s opinion. A board or panel of experts will have to be established and a Chairman/Administrator (or his/her team) be appointed to oversee applications for review and the appointment of expert.
- Although the LRC paper did not touch upon the costs of the review/variation of the PPO, the Council proposes that in the event the review is successful in the injured party’s favour, the defendant should bear the costs of such review, i.e. the costs of the jointly appointed expert opinion and any related costs, unless the Chairman/Administrator is of the view that the application for review/variation was based on fraudulent evidence submitted, or the injured contributed to deterioration in his/her circumstances, or the application was plainly vexatious / frivolous and the review was unsuccessful. The rationale for so proposing is based on the fact that liability has already been established against the defendant and the award of damages was supposed to be based on the legal principle that the injured should be put in a position that he /she would had been but for the accident. Otherwise, if the costs of the review follows the event, this may become a deterrent for application of review in the neediest of cases. Review should be on a needs basis to be determined by the Administrator.
- The Council supports the proposal to continue with the payment of the PPO in order to enable a dependent to continue enjoy the support /contribution from the periodical payments he/she would have received from the deceased recipient but for his premature death. As a matter of fairness, any other compensation to the dependant from the paying party or other person who may be liable to him/her should be accounted for to prevent duplication.
- The Council sees no conflict in the current mechanism for provisional damages and the award of PPO.
- The security of the periodical payments is of vital importance when making PPOs. The Council has no strong views on whether an independent organisation or institution should be created or whether the insurers should self-fund to ensure there is this security. That said, the Hong Kong Insurance Authority could play a part in this respect.