Bill on compensation for damages back before the House

A bill to regulate the way how the courts may calculate compensation for damages arising from disability and death started being debated once more in the House of Representatives yesterday.

The bill was also debated in February but had not been approved through all stages before parliament was dissolved for the general election.

Justice and Home Affairs Minister Tonio Borg explained that the Civil Code currently did not go into detail on how the courts should determine compensation for people who suffered damages, or their heirs.

The Maltese courts had to date refused to grant compensation for moral damages in such cases, but awarded compensation for material damages and loss of future earnings.

Over the years, a number of judges had tried to introduce formulae on how compensation was to be calculated, but there had been judgments which did not tally with each other even when the circumstances were similar.

This bill therefore would set guidelines on how compensation should be calculated and it would also cap the maximum compensation which may be awarded, with the courts retaining their freedom to decide compensation within those parameters.

In this way, one would also avoid exaggerated awards which would disrupt the insurance sector.

When there was a case which resulted in total permanent disability, the total sum payable may not exceed Lm250,000 or any higher sum which the Minister for Justice may from time to time establish in consultation with the Minister of Finance.

This, Dr Borg insisted, did not mean interference in the competence of the courts. This was not a case of pressure being brought to bear on judges over how they should decide cases. To regulate matters through law did not mean interference. Were that to be the case, every law would amount to interference in the judiciary.

He said that when compensation was sought following death, the heirs were eligible for the costs of their court case but they may have no claim for damages based on the loss of future earnings of the deceased.

The courts, however, may award damages to dependents of the deceased. The compensation may not exceed Lm250,000 and shall be based on the amount of maintenance that the deceased person would have been liable to pay had he remained alive as well as the time after which the dependent person would have been able to maintain himself and no longer be dependent on maintenance from the deceased.

When, at the time of death no person was dependent on the deceased but there was a strong likelihood that had the deceased remained alive, such person would in future have required maintenance from the deceased, the court may also grant damages accordingly.

In the case of close relatives who were not dependent on the deceased, the total amount of damages which may be awarded may not be higher than Lm20,000. This reflected a strong element of moral damages, Dr Borg said.

Opposition justice spokesman Anglu Farrugia said the government may have good intentions, but the opposition disagreed that the courts should be subjected to capping on the level of compensation they may award. This amounted to direct interference.

The courts should remain free to responsibly establish the level of compensation for each case on the basis of its merits, even if there were grounds to establish guidelines on who may be eligible for compensation.

Public opinion would react when there was disagreement with court judgments. Malta now also had the Commission for the Administration of Justice which could also consider complaints against judges by members of the public.

The government should seek to raise the public's confidence in the judiciary. Unfortunately, the fact that the government was moving this bill indicated to the people that all was not well in the law courts.

He agreed, however, that the courts should award moral damages and damages for pain and suffering. For there could be instances, for example, when the deceased was a pensioner and although there was no loss of earnings, there were moral damages for the heirs.

Dr Farrugia said insurance companies should hold consultation meetings with the public on matters such as this and they should find other means of raising their revenue instead of increasing premia.

The opposition was also against the proviso that the minister may raise the maximum amount which the courts may award in compensation.

Dr Farrugia said many of the cases for compensation stemmed from traffic accidents and the government should therefore seek to improve road safety.

Parliament should not be influenced by anyone to legislate guidelines for the courts to follow.

Concluding, Dr Farrugia said that one could criticise some court judgments, but the courts should not be controlled in any way and should be free to decide transparently according to the merits of each case.

Dr Farrugia also spoke on various aspects of court administration, insisting that court tariffs should be reduced and enough halls should be provided for judges and magistrates. He also called for the Family Court to start operating as soon as possible.

Dr Joe Brincat (MLP) said a minister may issue regulations for the better administration of legislation, but he felt it was not constitutional for the minister to be given the power to change the capping which this bill imposed on compensation which may be awarded by the courts, since that was an amendment of a substantive nature.

So too were the powers being given to the minister to establish rules to be taken into consideration by the courts in establishing the damages due for loss of earnings in cases of incapacity or death.

Another problem which the bill had was that there was no saving clause to indicate which cases its provisions would apply for, particularly those cases which had already happened.

Dr Brincat said he agreed with the need for legislation to establish formulae on the assessment of compensation and schedules which judges, lawyers and insurers could refer to in deciding disability issues. But the way the government was proposing to introduce regulation was flawed, not just with regard to the constitutional aspects, but also issues such as the rank order of heirs and compensation to cover the period between the time of an accident and the date when the court delivered judgment. Clearly, this bill needed greater reflection.

The setting of a cap on maximum compensation could create an injustice, particularly when the victims were among the top earners. For example, there were some who earned Lm25,000 per year. Giving him maximum compensation of Lm250,000 for permanent total disability meant compensating him only for a period of 10 years.