A man was recently awarded over €665,000 as compensation for damages sustained as a result of a traffic collision, when his car was rammed into at high speed by a truck while he was stationery at the traffic lights. As a result the man suffered grave injuries which eventually cost him his job and his lifestyle. While responsibility for the accident was not contested by the truck driver, no agreement was reached over the compensation due. The victim therefore filed an action for damages before the First Hall of the Civil Court seeking fair compensation for all his losses. The court delivered its decision in the case Trevor Grech vs Lawrence Agius on the 17th October 2018.
Prior to the motor collision the claimant suffered from no illnesses or conditions. He was a perfectly healthy 35 year old with a normal, active lifestyle and a good job with prospects of advancement in his IT career. In particular his eyesight was good and he suffered no abnormalities or visual impairments of any sort. The accident was to change his life forever. Although he suffered no apparent serious trauma injuries, the claimant soon began to feel pain and discomfort behind the eyes, dizziness, difficulty in focusing and sensitivity to light. He was eventually diagnosed with accommodative asthenopia, a condition subsequently confirmed by court appointed experts, one of whom attributed such effects to the mild traumatic brain injury sustained. As anticipated the effects did not subside; on the contrary they grew worse such that the pain became chronic. The victim’s ordeal did not stop there. The effects caused were not limited to the permanent disability related to his sight. This disability led to other consequential ailments and conditions. Since even the slightest exertion would cause him tremendous pain the claimant was prevented from carrying out any physical activity. This led to obesity, which together with other side effects led to depression, which in turn was further aggravated by his inability to work and his dependency on his family. The claimant’s suffering was not just physical or psychological. He lost his job together with all prospects for a bright career in IT, and effectively lost close to all his future earnings. He thus lost his independence and his quality of life. He had entered a downward spiral from which he could not emerge.
Compensation sought by IURIS
The victim was assisted by Dr. Simon Galea Testaferrata of IURIS Advocates. The Court was asked to liquidate all the damages sustained, starting from costs incurred otherwise referred to as ‘damnum emergens’.
This claim was not limited the recovery of expenses incurred to date, but was extended also to anticipated expenses, such as medical and care costs which the victim is likely to sustain in the future. It was argued that such costs were certain to be incurred given the victim’s worsening conditions, and the fact that he would have nobody to care for him once his parents are no longer. Since no concrete evidence was brought in this respect, it was pleaded that the court ought to use its discretion arbitrio boni viri in establishing the amount of compensation to be awarded.
The victim primarily sought compensation for the loss of earnings related to the visual disability sustained as a direct result of the accident. While various medical opinions were sought, the court experts concluded he suffered a 30% permanent disability to his eyesight. Applying this rate together, with his salary and age in the multiplier formula would lead to a compensation of just over €240,000. It was argued that this would still not compensate the victim sufficiently for his losses, certainly not in the manner established in leading case-law such as Butler vs. Heard, nor in terms of the principle of restitutio in integrum embraced in articles 1033 and 1045 of Civil Code of Malta. For while the victim suffered a 30% disability to his eyesight, the loss he effectively sustained to his income was far greater (79%), which loss should also be addressed and remedied. If one were to apply this rate in the multiplier formula, this would entitle the victim to a compensation for loss of earnings to the tune of €604,000, thus making a more just reward for the actual loss borne.
Further disability & Compensation
For the victim to be truly compensated for all his troubles emanating from this accident it was argued that the court should take into account, not merely the accommodative asthenopia affecting his eyesight, but also all other consequential physical and psychological debilities – the ‘effective loss’ contemplated in article 1045 of the civil code. In the course of the lawsuit new conditions emerged (obesity, water retention, eczema and depression), while others became graver (pain, lack of mobility and loss of independence). This rendered such conditions permanent. No grade of disability was established by the court in this respect, and here too the court’s discretion was invoked.
Reference was also made to the proviso to article 1045 which entitles one to seek moral damages when the loss emanates from certain criminal offences. This is a new addition to our statute books, since until recently moral damages could not be claimed save for a few instances.
Personal Injury judgement
In its decision the First Hall of the Civil Court, presided over by Judge Grazio Mercieca, underlined the fact that the scope of an action for damages is restitutio in integrum, as reflected in article 1045 (1) of the Maltese Civil Code which states “The damage which is to be made good by the person responsible in accordance with the foregoing provisions shall consist in the actual loss which the act shall have directly caused to the injured party, in the expenses which the latter may have been compelled to incur in consequence of the damage, in the loss of actual wages or other earnings, and in the loss of future earnings arising from any permanent incapacity, total or partial, which the act may have caused”.
Loss of future earnings
When dealing with the loss of future earnings the court quoted Lord Goddard in British Transport Commission vs. Gourley in that: “The basic principle as far as loss of earnings and out-of-pocket expenses are concerned is that the injured person should be placed in the same financial position, so far as can be done by an award of money, as he would have been had the accident not happened”. The court looked at the development of the concept of lucrum cessans under Maltese law. It commented that while the law clearly laid down what it sought to achieve, it failed to set the course to such a goal, thus leaving it in the court’s discretion. It thus held that it must rely on its best judgement as implied in article 1045 (2) which states that the matter is to be “assessed by the court, having regard to the circumstances of the case, and, particularly, to the nature and degree of incapacity caused, and to the condition of the injured party”. Referring to previous decisions of the Maltese courts on the matter, particularly Carmelo Grech vs. Michael Azzopardi, the court held that these ‘circumstances’ boiled down to the type and grade of disability suffered (objective criterion), and the victim’s conditions (subjective criterion). If the court is to quantify ‘fair and reasonable compensation’ both criteria must be applied together, since a victim’s personal situation varies from case to case, as do the repercussions. Therefore for the victim to be truly compensated as best as possible, the court had to first establish the true impact of the personal disability, and all other repercussions of the accident, on the victim’s earnings.
To do so the court adopted an unusual method of computation. Basing its calculations on the grade of debility suffered would not do the victim justice. It therefore departed from the generally adopted methods of calculation, and instead chose to base itself on a more realistic approach, namely to consider difference between the victim’s past & potential income prior to the accident, and that which he is now expected to receive – a method which remains faithful to the subjective and objective criteria above-mentioned. In so doing the court made a 20% adjustment of the victim’s salary at the time of the accident, bearing in mind his age at the time and his expected working life, thereby establishing the income he was likely to receive had the accident not occurred. The court then compared this to his post-accident income, noting a 79% reduction, or loss. Such loss of earnings, or lucrum cessans, amounted to €635,713. Thus the court effectively adopted the stance taken by IURIS, not only in basing itself on the actual loss of earnings, but also accepting the same percentage loss. In so doing it indirectly also espoused the reasoning brought forward by IURIS, acknowledging the psychological impact the accident had on the victim, in addition to the permanent physical disability to his eyesight.
Deduction for lump sum payment
This judgement stands out also for discarding the deduction that is typically made when a lump sum compensation is awarded. The reasoning for this was the reality affecting bank savings accounts, from which one can no longer enjoy reasonable interests on the capital sum received as compensation.
Gross pay/Net pay
The court opted to base its calculations on the gross salary, as opposed to the take home pay, as this includes taxes and national insurance contributions, which will not be paid as a result of which the victim’s pension will be adversely affected. Considering the victim would well need his pension in his circumstances, the court felt it only fair to award him such added compensation to make up for such a loss (as well as for the bonuses which the court did not take into account when computing his basic salary).
The court also upheld IURIS Advocates’ submissions that compensation must also be awarded for future costs such as nursing, care and medication, damages which the victim will inevitably sustain (and this apart from those incurred to date, and apart from the loss of earnings). This because ‘actual loss’ ought to include also those losses which the victim, given his circumstances, is reasonably expected to entail. While the court did not adopt the sum claimed by the victim, it nevertheless upheld the recommendation by the victim’s lawyer, Simon Galea Testaferrata, to exercise its discretion arbitrio boni viri, on the basis of which it granted a further of €30,000.
In its judgement the court stated in no uncertain terms that if there ever was a case which merited moral damages, it was this. This notwithstanding it rejected the claim for moral damages in view of the fact that the article invoked was enacted only this year. Being a substantive law which came into force after the lawsuit was filed, the court held it cannot be applied retroactively. It also held that this law afforded moral damages only to crimes of a voluntary nature, when the collision appears to have been an involuntary offence.
Nevertheless it took a cue from IURIS’ submissions, delving into the matter and considering various recent judgements on the subject. This led to its commenting that the law seems to have taken two steps back when recently enacting the proviso to article 1045, which now appears to stifle the reasoning of recent judgements in support of moral damages, also cited in IURIS’ final submissions.
It has yet to be seen whether this judgement will be appealed and if so whether it will be upheld, reversed or modified. Then again it may pave the way to new and fairer manner of compensation in personal injury cases in Malta.