Non-pecuniary (moral) losses in case of injury to body and health – Comparative perspectives XIII. AIDA Budapest Insurance Colloquium 27-28 November 2014.

Non-pecuniary (moral) losses Non-pecuniary (moral) losses in case of injury to body and health – in case of injury to body and health –

Comparative perspectivesComparative perspectives

XIII. AIDA Budapest Insurance Colloquium 27-28 November 2014

„Solatium doloris from liability insurance point of view – new challenges and questions, possible answers”

Dr. Habil. Ádám Fuglinszky LL.M. (Heidelberg) PhD (Hamburg)

Associate Professor, Eötvös Loránd University (ELTE), Budapest, fuglinszky@ajk.elte.hu

OverviewOverview

• I. Non pecuniary loss: characteristics and challengesI. Non pecuniary loss: characteristics and challenges• II. Structural questionsII. Structural questions

– 1. Infringement of personality rights 1. Infringement of personality rights non-pecuniary non-pecuniary lossloss– 2. Functional analysis No. 1: „Why?2. Functional analysis No. 1: „Why?””– 3. Functional analysis No. 2: „How?3. Functional analysis No. 2: „How?””– 4. Lump sum 4. Lump sum categories categories– 5. The amount (flexibility, individualization, justice 5. The amount (flexibility, individualization, justice standardization + predictability)standardization + predictability)

• III. CombinationsIII. Combinations• IV. Secondary victims, relational lossesIV. Secondary victims, relational losses

– 1. Accessory claims? / legal basis?1. Accessory claims? / legal basis?– 2. Prerequisites / limits / exclusions2. Prerequisites / limits / exclusions– 3. Amounts3. Amounts

I. Non pecuniary loss: I. Non pecuniary loss: characteristics and challengescharacteristics and challenges

• 1) Expressing in terms of money: „just as like you wished to see yourself while asleep” (Prof. Lábady) missing:

– no a priori assigned values (upper limit)– no chance of ‘in integrum restitutio’ ► functional analysis– no a priori decisive aspects on the amount

• 2) Public law impacts • 3) Impact of the economic/financial capacity of the society• 4) Fairness, Justice, Flexibility Predictability, Certainty of the law (a like cases a like)• 5) Individualization Standardization• 6) Temptation: let’s replace the complicated tort law by no fault (insurance) system, cf.

– Québec: Automobile Insurance Act, RSQ, c A-25, art. 73, max $ 175,000 – New Zealand: Accident Compensation Act 2001

II. Structural questionsII. Structural questions

1. Infringement of personality rights 1. Infringement of personality rights non- non-pecuniary losspecuniary loss• Non pecuniary loss (reparation/compensation theory) ► non-pecuniary loss is the prerequisite of damages • Infringement of personality right (personality right theory) ► non-pecuniary loss effects amount only

• (Hungary before the new Civil Code: non-pecuniary damages Mere unpleasure, anger, upset, disappointment, anxiety? Generally Ø, only if recognizable psychiatric illness…)

II. Structural questionsII. Structural questions

2. Functional analysis No 1: „Why?2. Functional analysis No 1: „Why?””

• Reparation/Compensation only?

• Prevention?

• Punishment/deterrence???– are there punitive damages in the legal system– ne bis in idem– liability insurance – grade of fault among the decisive factors?

►practical relevance: a.o. victim in coma?

II. Structural questionsII. Structural questions

3. Functional analysis No. 2: „How?3. Functional analysis No. 2: „How?””• Conceptual/objective approach (QC)

– the injury/disability itself ≈ loss of an „immaterial resource”• Personal/subjective approach

– the particular suffering• Functional approach: reasonable solace for the suffered misfortune (common law, Hungary, etc.)► practical relevance:

– impact on decisive factors– a.o. victim in coma? Austria, France: + / Netherlands debated, but rather Ø / Scotland Ø

► functional approach as synthesis? ► „fine tuning”? (cf. coma)

II. Structural questionsII. Structural questions

4. Lump sum 4. Lump sum categories categories• Common law

– Pain and suffering – Loss of amenities / loss of enjoyment of life– Loss of expectation of life– Disfigurement– Psychological losses (if ever…)

• France– Pretium doloris or souffrances morales ou physiques– Préjudice d’agrément (loss of amenity or loss of well being, also in coma)– Préjudice esthétique (also in coma)– Préjudice sexuel

• Spain/ Portugal: – more or less as in France – perjuicio juvenil / pretium juventutis: impairment of the ability to live out one’s youth

II. Structural questionsII. Structural questions

5. The amount (flexibility, individualization, justice 5. The amount (flexibility, individualization, justice standardization + predictability)standardization + predictability)• 5.1. Free discretion without tables and charts (Hungary, before the new Civil Code), decisive factors:

– Circumstances of the victim: age / the way of living has changed / moving possibilities / additional psychical factors / ability to work or to study– Impact on social relations (family, friends, free time activities, risk of isolation and loneliness)– The injury itself (severity, time of recovery, temporary/permanent, etc.)– Loss of earning capacity (non-pecuniary aspects as f.e. vocation)– Impacts on sexual life / loss of chance of having children– Grade of fault? (Financial situation of the victim and of the tortfeasor? Ø)

II. Structural questionsII. Structural questions

5.2. Free discretion with non binding tables and charts in the practice• NL: Smartengeldbundel (Verkeersrecht)• F: medical experts: a.o. Association pour l'étude de la réparation du dommage corporel / „loterie judiciaire”

– pretium doloris / souffrances physiques et morales / Thierry tables très léger (very light) / léger (light) / modéré (moderate) / moyen (medium) / assez important (quite severe) / important (severe) / très important (very severe) between € 1,000 (1,500) – 15,000 (25,000; 30,000)– préjudice esthétique medical expert gives points between 0 and 7 + sex + age + marital status + occupation

II. Structural questionsII. Structural questions

5.2. Free discretion with non binding tables and charts in the practice•D: Schmerzensgeld (§ 253 BGB) + Tabellen (orientation)• A: Schmerzensgeld (§ 1325 ABGB): duration + intensity / impact on health

– light ability of abstraction but not without pain app. € 100/day– medium ability of abstraction is limited to some activities app. € 150-220/day– strong no ability of abstraction, only the pain remains... app. € 200-350/day

• S: Tables by the Traffic Accident Compensation Board (Trafikskadenämnden) invalidity % + age• England free discretion, but Kemp and Kemp: The Quantum of Damages + Judicial Studies Board’s Guideline for the Assessment of General Damages in Personal Injury Cases

II. Structural questionsII. Structural questions

5.3. Free discretion but binding thresholds (scaling down?... a like cases a like…)

– the cap• Canada: „the trilogy” 1978: Andrews v. Grand & Toy Alberta Ltd.; Thornton v. Prince George School Board; Arnold v. Teno rough upper limit, $ 100,000/1978• New South Wales: Civil Liability Act 2002, Personal Responsibility Act 2002 $ 350,000 cap in the most extreme cases

– de minimis threshold• New South Wales not under 15% of the most severe case

II. Structural questionsII. Structural questions

• 5.4. Binding amounts prescribed by law– The Danish Liability for Damages Act (cap, fixed amounts, de minimis threshold 5%)

• § 3 Pain and suffering DKK 130 (app. € 17) / day, max. DKK 50,000 (app. € 6,721)• § 4 Permanent injury medical nature + scope of the injury + inconvenience caused 100% = DKK 573,500 ~ € 77,091 (special cases max DKK 687,500 ~ app. € 92,416) (1%/year reduction over 39 years of age, additional 1%/year reduction over 59 years of age)

III. CombinationsIII. Combinations

Flexibility

Individ. ■ Infring. Persona-lity rights

■ Non-pecuniary loss

■ Also prevention

deterrence

■Reparation

Only

■Personal / Subjective

■Functional

■Conceptual / objective

■ Lump sum / overall evaluation

■Categories

■ Free discretion

■ FD + orientating charts

■ FD +binding caps / thresholds

■Amounts by law

Predict.

Standard.

IV. Secondary victims, IV. Secondary victims, relational lossesrelational losses

1. Accessory claims? / legal basis?1. Accessory claims? / legal basis?• Nervous shock? Cf. England: Alcock v Chief Constable of South Yorkshire Police [1992] 1 AC 310:

– perceiving a shocking event with own senses – being present – sudden shock – close tie of love and affection – foreseeability

• Impacts on / injury to health? (Cf. PETL: it is a different base of claim!)• Impact on the life of the relative (but not necessarily injury to his/her health, cf. Hungary, but see also „right to live in a complete and uninjured family“)• The loss and the emptiness felt upon it itself? (grief and sorrow) / close relationship

– formally in law?– de facto? (even de facto cohabitation, step parents, or as in France: parents-in-law, nephews, nieces, uncles, aunts f.e. if they brought up the child … but mere friendship?... )– both? (DCFR)– rebuttably presumed in case of family relationship?

IV. Secondary victims, IV. Secondary victims, relational lossesrelational losses

2. Variations (prerequisites / limits / exclusions)2. Variations (prerequisites / limits / exclusions)• No claim, unless nervous shock – medically ascertainable impairment of health, beyond mourning (Germany, Ireland)• No claim, unless medically ascertainable impairment or:

– Gross fault (intention, gross negligence), and– Close family relationship to the primary victim, and– Close personal relationship. (Presumed: parent, child, spouse.) Finland (similar, cf. Tort Liability Act, C. 5 S. 4a (1))

• No fixed list of relatives + general prerequisites– certainty and directness of damages – emotional proximity France, Québec

• Fixed list of relatives + amounts set by law (supplemented by nervous shock cases)

– „Loss of guidance, care and companionship” (Canada, common law provinces + Cf. Alberta, Manitoba, Saskatchewan: fixed amounts!))– „Bereavement” (England, Fatal Accidents Act, 1976 c 30)

IV. Secondary victims, IV. Secondary victims, relational lossesrelational losses

3) Amounts3) Amounts• Fixed by law (some fatal accidents acts)

– England Bereavement (£ 10.000)–Canada, common law provinces Loss of guidance, care and companionship

• Alberta spouse, parents: $ 82,000 / child $ 49,000• Manitoba spouse: $ 30,000 / others: $ 10,000 • Saskatch. spouse: $ 60,000 / child, parent: $ 30,000

• Free discretion– Québec Augustus v. Gosset: circumstances of the death, age, nature and quality of the relationship, the personality of the victim and his/her ability to manage the emotional consequences, impact on his life, etc.– Hungary …