The Malta Insurance Association has long been calling for a review of the law governing compensatory damages arising from tortious liability, a subject which has been discussed on and off since the turn of this century but never taken any further.
Way back in 2010, we engaged in long and detailed discussions with the government following the publication of a white paper relating to compensatory damages due to victims of torts. In launching that public consultation, Carmelo Mifsud Bonnici, at the time minister for justice and home affairs, had told a press conference that legislative amendments were necessary in order to establish clear standards for fair compensation. He had hoped that such amendments would reduce the number of cases ending up in court and would also make court hearings more efficient.
Although everyone agreed that the law needed change, very little came out from that initiative and we therefore reinitiated discussions with a newly- appointed government commission in 2014 which was again tasked with presenting legislative proposals on civil damages arising in tort following bodily injuries or death.
We had welcomed this study because we were once again hoping that the proposed legislation would provide greater legal certainty as compensation awards would be less affected by conflicting interpretations by different judges. We were also expecting that a codification of the law would lead to a reduction in court litigation and to quicker and fairer awards, with legal certainty providing less reason for the parties to litigate.
Since the commission’s final recommendations were never made public, nor ever discussed with us, we called upon the current minister for justice in order to pursue the government’s earlier initiative on this matter.
If we lay an emphasis on consistent judgments and speedier compensation processes, it is because we and the public in general assume that awards for damages should be fair in the context of our reasonable expectations in today’s modern society.
In practice, no amount of money will ever be adequate compensation for physical or emotional loss whenever a person dies or suffers from some form of permanent disability. The perception of fairness is very subjective because it depends on a complex interaction between our laws, the discretion of judges in their recognition and quantification of losses, the role of medical experts and the scope of social security and private insurance cover.
The interaction of these factors does not always tally with our own notion of fairness and reasonableness, which is why we have constantly been pushing for legal amendments to be approved by our elected representatives in parliament.
We expect parliament to legislate after the government has carried out appropriate consultations and sought reports from relevant organisations including legal and medical experts, professional bodies, trade unions, employers and insurers.
Some compensation awards for similar injuries can today vary immensely, leading to inequitable, lottery-like results. This is not because damages in general are difficult to quantify but because judges and lawyers have at times tried to fill gaps in our compensation regime in a different and inconsistent manner, leading to rather innovative ways of interpreting Maltese law on damages in tort.
No amount of money will ever be adequate compensation for physical or emotional loss whenever a person dies or suffers from some form of permanent disability- Adrian Galea
We do not agree that this is the right way to develop the law on compensation. As with all other realms of civil law, we believe that it is for parliament to provide us with a consistent standard that is fair and this following a reasoned public debate that takes account of our current social and economic realities.
For instance, we expect this debate to consider whether more consistent awards can be favoured through a harmonised system of percentage points for each category of physical or mental impairment. The consultation that followed the 2010 white paper was generally in favour of such a medical table as exists in many European systems. However, that debate also emphasised the need for some court discretion to adjust the rating scale upwards or downwards to cater for the specific occupation of the injured person as, for example, when a professional violinist loses his fingers.
The debate should also take account of the reality that in traffic and most workplace accidents it is the public in general which will end up paying for these damages.
The connection may not appear so obvious when, as normally happens, it is an insurance company that pays compensation, instead of the negligent person who caused the accident.
However, if the law were to substantially and abruptly increase compensation awards, this would lead to higher premiums and public discontent because of their unsustainability. Indeed, a public debate of this nature cannot avoid discussing compensation levels without, at the same time, asking how such compensation is to be funded.
This is key to a discussion of moral or non-pecuniary damages such as pain and suffering, anguish, damage to sexual function, aesthetic damage and so on. When such damages do not result in a financial loss, they often defy quantification and are entirely subjective and unpredictable. Whereas pecuniary damages can be calculated with relative certainty, claimants can often have unrealistic expectations for pain and suffering or mental anguish.
Therefore, insurers, while agreeing that such damages should be compensated, believe that compensation for pain and suffering should depend on preset criteria which parliament perceives to be fair and just and, above all, economically sustainable within our society.
Adrian Galea, director general, Malta Insurance Association