Court of Appeal upholds higher damages award decision

Ms Justice Mary Irvine, sitting alongside Ms Justice Mary Finlay Geoghegan and Mr Justice Sean Ryan, said it was wrong for awards to be discounted by 3 per cent in reflection of predicted annual returns on investment of a lump sum payment.

The court upheld a High Court decision to use a reduced “real rate of return” (RRR) of 1.5 per cent in assessing a €15.9 million pay-out to a 9-year old with brain damage.

Ms Justice Irvine said a catastrophically injured person like Gill Russell could not be expected to take the same investment risks as a typical Irish investor.

The court’s ruling says the High Court was entitled to reduce the “unrealistically high” RRR to 1.5 per cent when calculating his claim for future pecuniary loss, and 1 per cent for his claim for future care due to predicted wage inflation over his lifetime.

The court must provide compensation “on a 100 per cent basis” when calculating damages, and therefore not leave in place an “unrealistically high” RRR, it was said.

The ruling is likely to be challenged by the Health Services Executive (HSE) in the Supreme Court.

In a statement issued after the ruling, solicitor Ernest Cantillon said: “The Real Rate of Return (RRR) is the same as the discount rate.

“Traditionally the courts, in calculating the amount of damages to be awarded in respect of future expenditure, have used a RRR of 3 per cent.

“If the RRR is reduced the amount of damages is increased. The courts have now determined that in order to ensure catastrophically injured plaintiffs are properly compensated in full the amount of damages must be increased.

“This is to guard against the real danger of catastrophically injured persons running out of money to pay for carers.”