Wed 23 Jan 2019

Parliament moves forward proposals on significant change to compensation awards in Scotland

On 18 December, the Scottish Parliament gave the green light to the principles of a government Bill designed to make significant changes to financial awards arising from medical negligence claims in Scotland. 

The Damages (Investment Returns and Periodical Payments) (Scotland) Bill seeks to regulate more effectively the way that awards of damages are calculated, in addition to making changes on how funds are paid to those who have successfully pursued a claim.

At present, an award of damages or settlement figure agreed between parties must be paid in full to a Pursuer at the conclusion of the case. The only exception to this rule is where separate agreement has been reached between parties. That agreement must be voluntary, and the Court has no specific authority to compel a Defender to make payment to the Pursuer on the basis of an instalment arrangement.

The Bill that has been brought before Parliament seeks to change that. If passed, it will allow the Court to compel a Defender to make payment to the successful party in specified instalments (known as 'Periodic Payment Orders'). These would be linked to inflation and the arrangement would endure for such a period as the Court considers necessary.

Among the most significant outcomes of this would be that where there is a dispute on the issue of life expectancy, the Court will no longer require to make a determination on that point after considering the expert medical evidence. Presently, the annual sum due to the Pursuer every year is calculated (for future care, housing or other costs) and this sum is multiplied by the figure decided by the Court as best representing the anticipated life expectancy. That figure is paid in a one-off lump sum. If the change were to be implemented, the Court could instead decide on the annual figure that the Pursuer is entitled to, and then compel the Defender to make payment of the sum (linked to inflation) each year for as long as the funds were required.


For both parties, this removes the risk that arises from the uncertainty of future events. It increases efficiency in the Court process by removing the requirement for detailed medical evidence to be heard and a decision made in the face of - often - entirely contradictory expert opinion on prognosis. It is also likely to allow settlement discussions to be concluded more efficiently where the only matters remaining in dispute are related to the value of the claim itself.

Of course, many will see the change as restrictive to a Pursuer who seeks the freedom of a lump sum payment, and cumbersome to a Defender who is tied in to a payment arrangement with no end date in sight. Ultimately, it will be for Parliament to determine whether this change represents a practical solution to the challenges faced in high value, complex litigation where the calculation of future damages has a profound effect on a Pursuer many decades after the case has concluded. 

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