A Bill to introduce the Damages Act was unanimously passed by Parliament during the meeting of 15 July 2019.
The Bill was published following consultation with stakeholders, including representations from members of the legal profession and insurance industry professionals, as well as the Honourable the Chief Justice and the Financial Secretary.
The Act covers two separate matters relating to the award of damages in civil cases before the Courts of Gibraltar. Firstly, the applicable rate of return on investment of damages for personal injury, referred to as the ‘discount rate’; and, secondly, the guidelines to be used in the assessment of general damages in personal injury cases.
The position in England and Wales has historically been adopted in Gibraltar in respect of both these matters. However, uncertainty arose following rulings of the Honourable Mr Justice Jack, as he then was, in two cases before the Supreme Court of Gibraltar. Settlements have, as a result, been harder to reach and legal costs have consequently escalated.
The Act removes the uncertainty by providing for the Minister to set a discount rate by Order. Similarly, the Honourable the Chief Justice may set local guidelines insofar as the assessment of general damages in personal injury cases is concerned. In the absence of such an Order or Guidelines, the Act provides that the England and Wales rate and guidelines shall apply, these being the rates and guidelines that most practitioners had historically taken as applicable in Gibraltar, in any event. The spiralling costs of litigation would have eventually led to increased premiums for consumers and potentially entirely priced out insurance companies from offering products in Gibraltar – both consequences are as unacceptable as they were avoidable.
The Minister for Health, Care and Justice, the Honourable Neil F. Costa MP said: “I wish to thank those who have contributed to the passing of this Act. This measure removes the recent, unwelcome, and costly uncertainty concerning damages in personal injury claims, which has had a harmful effect on both claimants and defendants. The Act provides for certainty and will be of benefit to the administration of justice and to the community generally.”