Damages: Who Decides How Much?
Posted: Wednesday 28 March 2012
Jury trials to decide the level of damages have been a feature of Scots law since the nineteenth century. There are regular spasms of activity, when the level of jury awards are challenged and, more recently, an attempt has been made to strike at the concept of jury trials altogether. The recent Inner House appeal Hamilton v Ferguson Transport (Spean Bridge) Ltd (where we acted for the Pursuers) may initially look like a simple appeal by an insurance company, disputing the level of award given in a fatal accident case, but a five judge bench was summoned in the Court of Session to consider fundamental questions about the appropriateness of juries awarding damages for claims in civil court, and the repercussions that could follow from it for the future of the entire jury system in Scotland.
The circumstances were that on 18 December 2007 Caroline Hamilton was killed in a road traffic accident when a timber lorry pulling a heavily-laden trailer overturned on top of her car as it passed in the opposite direction. Her husband Ian and daughter Kirsty (then aged 17) raised an action under the old Damages (S) Act 1976 (as amended) seeking damages including a claim for solatium under s1(4) of the Act for grief, loss of guidance and loss of society. At a jury trial on 15-16 February £80,000 was awarded to husband Ian (£50,000 to the past and £30,000 to the future) with £120,000 to Kirsty ( £50,000 to the past with £70,000 for the future) -- Ian, at 69 years of age at trial, was much older then his daughter. Both awards were the largest made: Ian’s for a spouse losing a partner with Kirsty’s the largest of any type for a relative under S 1(4). The defender appealed but only in respect of Kirsty’s award.
The award under section 1(4) of the Damages (Scotland) Act 1976 (now S4 (3) (b) of the Damages (S) Act 2011) was challenged as being excessive i.e. one which "no reasonable jury would have made". It was also submitted that juries in recent cases have gone so far beyond the range of judge-based awards due to sympathy, inexperience and lack of guidance that a system had been created which led to inherent uncertainty and arbitrary decisions, and that this was contrary to both Article 1 Protocol 1 and Article 6 of the European Convention of Human Rights. In this case the jury awarded about six times the most recent judge-based award.
To bring themselves within the ambit of the ECHR, the Appellants relied upon Lord Reid’s dicta in the recent Supreme Court decision in Axa that as a general rule the concept of possessions can include a wide range of economic assets and resources and that by making an excessive award their Article 1 Protocol 1 rights were being unjustly interfered with. The court robustly tested this argument and commented that Axa was about imposing a fresh liability, whereas the current issue was distinct from that and was about the amount of damages, and that the appropriate test to use may be Article 6, as the issue was a procedural question of fairness. The Appellants submitted that the state had not provided a process for jury trials with adequate safeguards to protect against the risk of disproportionately large. This was rejected by the Respondents.
The "no reasonable jury" test was debated at length, with the Respondents submitting that, as there had been recent jury decisions of comparable awards, this test was not met here, and the award of damages made by the jury should stand. They further submitted that the fundamental test was what is considered to be excessive, and questioned the use of judicial awards for comparison. It was argued that these may not adequately reflect changing societal values. They then submitted that uncertainty already exists in the court system as courts at different levels can decide the same case in a different way, and that this does not necessarily make the system unfair. The Respondent also challenged the value of the so-called hierarchy of awards which had historically been applied by Judges. Thus there was no reason by modern standards why a spouse should necessarily get more for losing a partner than a child for losing a parent: it depended upon the relationship and circumstances of each case.
The Appellant stated that because the written issue contained the only damages figure given to the jury, they may be influenced in an upward direction in making a valuation. The remedy could be the issuing of non-binding guidance from the bench following agreement by the parties about appropriate ranges of compensation, and some reference as to where to begin their considerations. Details of the form that this guidance would take were not put forward by either counsel, and the bench acknowledged that while England had removed the jury system from civil awards, they had encountered a different set of problems with judicial awards.
The Appellant submitted that the system required to be reformed from within and one option for the court was to recommend that the matter be sent to the rules council and the law commission for review.
It is difficult to determine what approach the court will take on this issue, but there seemed an unwillingness to launch a full scale attack on the civil jury system by the back door. Novel arguments were launched by both sides and there was an understanding that what was being discussed may have significant repercussions for future awards and indeed the entire concept of judicial awards in Scotland.
From our position acting for Kirsty Hamilton our inclination is that the award is likely to survive the challenge. The court may suggest some changes to the way jury trails are conducted, but a wholesale revision is unlikely. The decision is awaited…
If you would like to discuss the issues raised by this case, or the subject of damages more generally, please contact Jim Herd at jim.herd@morton-fraser.com.
