Mr Justice Cross handed down a judgement today [18 December 2014] in the High Court case of Russell (a minor) v HSE, which has caused significant concern in the Irish Insurance market. Justice Cross awarded the boy €13.5m.
The male plaintiff suffered brain damage at birth, and as part of his case argued that the discount rate used to calculate the lump sum paid by the liable party for losses in the future (currently 3%) was insufficient, and that it should be revised.
The market expectation was that the judge would reduce the rate to 2% or 2.5%. However, the judge awarded the Plaintiff a rate of 1%, which is much more that was predicted by the Insurance market and the legal profession.
Actuarial calculations show that if applied in the case of a 20 year old male who claims care and attendance for life, the new rate will increase this heading of damages in excess of 60%. Insurers will have to review their reserves, and revise these cases to assess what funds they will require to meet liabilities in serious injury cases in the future.
Informed sources have advised that there is likely to be an appeal to new Court of Appeal by the State Claims Agency, which represented the defendant in this case.
The team in Ireland provide a triage assessment service in serious cases and will be pleased to be of any assistance to Insurers seeking guidelines in significant cases. Please contact Gavin Campbell or Rhona McGrath for any further enquiries.