Car accident victim to be compensated in instalments under new damages law

Wednesday 28 April 2021

A young man, who was left with a traumatic brain injury after a car accident when he was a child, has become the first person to receive compensation payments in instalments under Jersey’s new Damages Law.

The Royal Court approved the Periodical Payments Order (PPO) – whose sum has been kept confidential – last month, but the judgment only became public this week.

The car accident happened 10 years ago when the young man - referred to only as 'Zac' in the judgment - was a child. He was then treated and underwent rehabilitation in Southampton for six months before returning to the island.

Now in his 20s, the Court heard that he is now able to live independently with the regular support of care workers. However, he was still said to “suffer from the consequences of the brain injury and will do for the rest of his life, which is predicted to be of near normal length.”

“He has profound and permanent cognitive, executive and behavioural deficits which make him vulnerable and dependent on others and mean that he is unlikely to ever be capable of more than therapeutic employment,” the judgment added.

It had been previously agreed that a settlement would be paid to the young man by the party that admitted liability for the accident, but it took several years for the exact sum to be assessed because the full extent of the accident on Zac and the care he would require would not be known until he was older.

Last month, the Royal Court was asked for approval for this sum to be paid by way of a PPO. It was not asked to make a decision on the value of the payment, which was privately agreed.

Having considered the principle that individuals who suffer an injury “should receive full compensation for the loss which he has suffered as a result of the defendant’s tort, not a penny more but not a penny less”, the Court agreed that a PPO was “appropriate”.

“We reach this conclusion for four principal reasons. First, the parties are agreed that a periodical payments order is appropriate and have agreed to settle the proceedings (avoiding a four week quantum trial) on that basis. Secondly, the Plaintiff is young and has a long life expectancy. Thirdly, his needs may change over time. Fourthly, such a disposal is a method that is fair to both Plaintiff and Defendant,” the Court reasoned.

They then had to assess whether the payment would remain secure over time, which it decided it would because there were “four levels of security”, including the resources of the insurance company involved and the bank it was linked with.

The case was the first test of the PPO provision in Jersey’s Damages Law, which was ushered in by States Members in 2018.

The aim of the new law was to temper the size of compensation awards by allowing various discount rates to be applied and enabling the awards to be paid over an amount of time, rather than in a single lump sum.

The principle of the law was that individuals should only receive compensation for the loss they have suffered and no more or less – if they were to receive a lump sum, the value of the award could significantly appreciate or depreciate over time.

The new law therefore created PPOs, which allow individuals to receive payments in instalments over the course of their lifetime, to ensure they do not end up over- or under-compensated.

It came in the wake of a record £200m claim against the Government on behalf of two siblings, who were currently resident in UK facilities due to their severe mental health issues.

It was alleged that they could have avoided a decade of “appalling” abuse if the former Health Minister had put them up for adoption as babies.

The case was eventually settled out of court. The payment sum was never disclosed.