Seanad Éireann debate -
Wednesday, 31 Oct 1990

Vol. 126 No. 8

Statute of Limitations (Amendment) Bill, 1990: Second Stage.

Question proposed: "That the Bill be now read a Second Time."

Minister of State at the Department of Tourism and Transport (Mr. Lyons)

I am pleased to have this opportunity of placing before the Seanad this important piece of legislation. It is designed to remedy an injustice in the present law which can, in certain cases, result in a person losing his right of action for personal injuries before he is in a position to know that he had such a cause of action.

Under the Statute of Limitations, 1957, there is a three year period within which a person who suffers injury because of the wrongful act of another may make a claim for damages from the person responsible for causing the injury. That period is expressed by the statute to run from the date on which the cause of action accrued. The effect of this provision is that if a person does not realise that he has in fact suffered injury within three years of the act that caused it, or if he is aware of the injury but does not realise within three years that it was caused by the actionable deed or omission of another, then he may find that his legal remedy is gone before he knew he had such a remedy. The types of cases I am talking about are generally cases in which the damage caused may not manifest itself for some years afterwards and, in the meantime, the time limit for taking an action has elapsed.

The Law Reform Commission in their 1987 report entitled "Statute of Limitations: Claims in respect of Latent Personal Injuries", pointed out that the law in this area was unclear and possibly unconstitutional. A recent judgment by the Supreme Court has gone some way towards clarifying the present law in that it confirmed that the date from which time begins to run is not the date on which the injury was discoverable. The court expressly reserved its position on the question of constitutionality of the existing law since that question had not been argued before it in the particular case.

This Bill, in implementing the recommendations of the Law Reform Commission in the report I mentioned, will remedy the injustice that exists and will also remove constitutional doubts about the present law.

The Bill achieves this by providing that the three year limitation period that applies in personal injuries cases will run from the date of accrual of the cause of action as at present or the date of knowledge of the injured person. Appropriate provisions which I will go into later are also made in the Bill for circumstances where the person injured is not the claimant.

Section 2 of the Bill defines the date of knowledge by setting out what one needs to know in order to be fixed with knowledge for the purposes of the Bill and in what circumstances one may be treated as already having knowledge of a particular fact. Briefly, the date of knowledge of an injured plaintiff is the date on which he first knew that he had been injured and that the injury was significant and attributable to the wrongful act of another identified person or persons. Such a person will be regarded as having knowledge of facts ascertainable with the help of medical or other expert advice which it would be reasonable for him to obtain but he will not be fixed with knowledge, for example, which he has failed to acquire as a result of the injury.

The principal provision in the Statute of Limitations, 1957, dealing with limitation periods in claims involving personal injuries is effectively replaced by section 3 of the Bill. This section and section 6 are the core provisions of the Bill. The effect of the replacement is to permit the three year limitation period that applies in such cases to run from the accrual of the cause of action or, if later, from the date of knowledge of the person injured. Section 3 of the Bill also makes similar changes to analogous provisions in the legislation dealing with the sale of goods and the control of dogs.

Where a person who had a cause of action has died, that cause of action survives for the benefit of his estate and may be pursued by the personal representative of the deceased. Section 4 of the Bill deals with situations of this kind by providing that a personal injuries action for the benefit of the deceased's estate such as an action in respect of certain pecuniary losses, for example, medical bills or loss of earnings resulting from the injury, may be brought within three years of the death or of the date of knowledge of the personal representative, if later.

In addition, where a personal injury has caused death, the surviving dependants of the deceased may have a claim under Part IV of the Civil Liability Act, 1961, against the person responsible. Existing law provides that an action of this kind must be commenced within three years of the death. Section 6 of the Bill applies the date of knowledge principle to such actions by providing that they may be taken within three years of the death or of the date of knowledge of any person for whose benefit the action is brought, whichever is the latest.

The statute of limitations makes special provision for the circumstances where a person is under a legal disability when a right of action accrues. "Disability" in this context includes incapacity because one has not attained majority as well as mental incapacity. The law at present provides that where a right of action involving a claim for personal injuries accrues to a person while under a legal disability, the three year limitation period will not start to run against that person until he or she ceases to be under a disability. Thus, if a person is injured in childhood, he or she may institute proceedings at any time up to three years after reaching the age of majority which is normally the age of 18.

The Bill, at section 5, applies the date of knowledge principle to the special provisions for disability. Under the new provision, the three year period will run from the cessation of the disability if the right of action accrued while the person in question was under a disability or if that person's date of knowledge was during a period of disability.

All in all, I am satisfied that this Bill achieves a sound balance between two conflicting requirements. These are, on the one hand, the need to compensate an injured person fairly for injuries caused by the wrongful act of another; and on the other, the requirement to offer a measure of certainty and finality so that people may arrange their affairs secure in the knowledge that they will not be exposed to claims long after the event.

Because of fears that the provisions of this Bill could lead to claims being made long after the event, there have been suggestions that there should be a "long stop provision" or a "cut-off provision" which would prevent any claim being made after a certain time had elapsed. The Law Reform Commission rejected that suggestion and I suggest they were correct in doing so and that there is no need for such a provision. The courts are ever vigilant to prevent injustice which could be caused to defendants by allowing preceedings to continue long after the event when witnesses may no longer be available or when it may be unreasonable to expect them to be able to recall long past events.

In putting this Bill before you, I must not neglect to express my appreciation of the careful research and analysis carried out by the Law Reform Commission in their report on Latent Personal Injuries. This Bill substantially implements their recommendations in that report.

I commend this Bill to the House.

Mr. Neville

I welcome the Minister here today and the Statute of Limitations (Amendment) Bill. It has been Fine Gael policy for some years that the law on limitation of actions as applied in latent personal injuries should be amended. The Bill closely resembles the Private Members' Bill introduced by a former Fine Gael Deputy George Birmingham in 1988. That Bill was not enacted at that time and the Bill before us replaces it.

We in Fine Gael accept the key principle in the Bill that the three year limitation period in personal injury cases will run from the date on which the person injured discovered or should have discovered that there was a cause of action. On most occasions this will be from time of occurrence but allows for injuries which do not immediately manifest themselves.

As the Minister said, the Law Reform Commission in its deliberations considered and dismissed other options, such as no time limits, which would be likely to provoke fraudulent or speculative claims. Witnesses in these circumstances would become less clear in their evidence or might even die before the matter came to court and records could be lost. A longer limitation period of, say, ten to 12 years since the time the injury was sustained would allow some latent injury cases to be processed but would not allow all. There would, however, be difficulties with poor quality of evidence and it would reduce the incentive for the injured party to get on with their case in their own interest. Judicial discretion to extend the period where justice required this was also considered by the Law Reform Commission. This would introduce uncertainty in the law and discretion would tend to be exercised somewhat differently from judge to judge. This would lead to different outcomes which are impossible to reconcile.

The approach taken in the Bill is the correct one. The limitation period will run from the time the injured party could have reasonably discovered his or her injury rather than when he or she sustained it. However, the concept of discoverability is not clear-cut. Does the text embrace cases where the plaintiff was at all times aware of his injury but did not discover the legal implications for several years after the injury, or does it cover ignorance of the person's right resulting from bad legal advice? Does the time run until the injured party discovers the legal identity of the defendant, say, in the case of a hit-and-run accident?

On the introduction of the Bill it is evident that more claims will be admissible to the courts. The cost of settling cases will be increased and this will be directly reflected in an increase in insurance premiums. The increased costs will be borne by the policyholders in the first place and ultimately passed on to the consumer as price increases on goods and services. This will go against the stated aim of the Government which is to reduce insurance costs which are high in comparison with other countries and represents a threat to the competitiveness of Irish firms.

The Government should tackle high insurance premiums in conjunction with the Bill. Motor insurance premiums in Ireland are four times greater than that of our nearest neighbour, the UK and public and employers' liability insurance is three times higher. This is having a serious effect on the competitiveness of Irish industry and should be tackled. Costs to the Irish motorist are totally out of line with his British and EC counterpart and this needs urgent action. The growth in litigation consciousness in Ireland has been criticised and rightly so. It seems to be a way of making a quick buck. This should be controlled without removing the rights of the people. The Bill before us will compound this problem. Have the Minister and his Government plans to counteract this negative aspect of the Bill?

Section 2 states that the discoverability test must cover the person's knowledge that the injury was significant. This covers cases where a trivial impairment of his mental or physical condition deteriorates over time. It is logical that a minor impairment may go unnoticed but that should not militate against the injured party. The Bill does not define the term "significant" which adds uncertainty to the concept of discoverability in the Bill. In George Birmingham's Bill of 1988 this was defined in section 4 (2) as follows:

For the purposes of this section that is reference to a person's date of knowledge] an injury is significant if the person whose date of knowledge is in question would reasonably have considered it sufficiently serious to justify his instituting proceedings for damages against a defendant who did not dispute liability and was able to satisfy a judgment.

I welcome the Bill and look forward to the Minister's reply. As I said at the outset, Fine Gael have been promoting this concept for some years. We welcome the Bill and look forward to its passage through the House.

Mr. O'Donovan

I, too, welcome the Minister and support the Bill. This legislation is both prudent and necessary because under the statute of limitations the three year period applicable in personal injury claims for some time has been deemed to be inadequate. As Senator Neville pointed out, the Law Reform Commission have looked at this under the latent defects arising out of personal injuries and have recommended that this amending legislation be introduced. Indeed, a former member of Mr. Neville's party, Mr. Birmingham, introduced a parallel Bill during the period of office of the last Coalition Government. In addition to the recommendations of the Law Reform Commission, the Supreme Court in a decision issued on 8 February 1990 referred to the inadequacy of this legislation. However, in the particular case which was put before it, Hegarty v. O'Loughran and Edwards, the constitutional point was not at issue but the Supreme Court adverted to the problem which existed.

The Bill deals with the unusual circumstances of some hidden or latent defect as a result of an injury coming to light some years down the road. An example of this would be some lung diseases caused by radiation which are not clear and visible to the human eye and consequently may lie dormant in one's system for some time which could exceed the three year period set down under the statute of limitations. At this juncture it is important to emphasise that section 2 of the Bill clearly sets out the restrictive circumstances under which this amending legislation would operate. Under section 2 (a) it is necessary that the person alleged to have been injured had been injured. That must be clearly established to the court. Secondly, the injury in question must be significant and not merely a light superficial injury which the court might decide would not warrant the inception and introduction of this amendment. The injury must be attributable it whole or in part to the act or omission which was alleged to constitute a negligence.

Another point which is clearly specified under section 2 (d) and which might answer one of the queries Senator Neville posed is that the identity of the defendant must be established. In my view in a normal hit-and-run case — an unfortunate vacuum in our law — the postponement being suggested here would not arise. In relation to that I am aware that under certain EC directives relating to hit-and-run accidents there are provisions whereby an injured party can have recourse to some compensation. However, the amount involved here would be minimal and I concur with Senator Neville that there seems to be a problem here. Serious injuries can occur as a result of a hit-and-run accident and there are currently no provisions under Irish law whereby a person can have proper recourse to the law and receive proper compensation for the injuries suffered.

We are dealing here with a proper and prudent amendment which provides that in certain restrictive circumstances the injured person can have recourse to the courts. This brings me to the question of knowledge of the injury. If the injury arises out of neglect by an individual — it may be a pain in his back or head or some obvious defect — to bring it to the attention of a doctor or to seek legal advice, this provision does not apply. It applies in three possible circumstances. An injured person with a latent injury, on his own behalf can avail of this amendment to bring an action outside the existing three year period. There is, as Senator Neville pointed out, no limitation to this extension. For example, in ten years time if somebody, as a result of a Sellafield disaster, discovers he or she has a serious lung complaint or an unusual disease arising from radiation, that person, providing he or she can come within the criteria set out under section 2, can bring an action. A person representing an injured person, or the surviving dependant of an injured person, can avail of this legislation, where the latent injury did not come to the notice of the plaintiff within the three year period specified.

This Bill is welcome. Section 7 states:

...the "date of knowledge" principle to all causes of action involving personal injuries whether they accrue before the enactment of the Bill or after, and also proceedings pending at that time...

In other words, to a certain extent it is retrospective and there is the possibility set out by Senator Neville, that it may give rise to actions against the State and have some economic repercussions for the State. The Sale of Goods and Supply of Services Act, the Control of Dogs Act, 1986, and the Civil Liability Act, 1961, have been amended to take cognisance of this legislation.

The measure is welcome and the fact that it is going through the House a short period after the recommendations of the Law Reform Commission issued in 1987 is to be welcomed. From time to time the Law Reform Commission make recommendations and issue reports which are often left on shelves for decades without being acted upon. This is not the case here and all sides of the House recognise the importance of the Bill. It should also be noted that in 1975 in Britain the legal system and legislature decided that such amendment was necessary. The provisions in this Bill follow those of the United Kingdom who have a common law system akin to ours.

I welcome the Bill and recommend that it be accepted and passed as quickly as possible.

Minister of State at the Department of Tourism and Transport (Mr. Lyons)

I am pleased with the positive response from Members and I thank those who attended during the debate. By so doing, they have shown their keen interest in this important, necessary and worthwhile amending legislation.

This is a technical Bill. Its provision, nevertheless, will have important legal implications for persons who are seriously injured. I am satisfied that changes in the law in this area are necessary, both on their merits and because of the constitutional doubts which have been expressed by the courts about the present law.

Senator Neville referred to the Statute of Limitations Bill, 1988, which was introduced in the Dáil by the then Deputy George Birmingham on 3 March 1988. For the information of Members, it was dealt with at column 1602 in the Dáil Official Report of that date. Second Stage was ordered for Private Members' time on that day. However, the Bill was not taken any further and it lapsed on the change of Government in June 1989 without being debated. It was our intention at that time to support the Bill in principle, subject to certain amendments mainly of a technical or drafting nature. However, the opportunity did not present itself. The Government, as I said, are of the view that reform of the law on the lines recommended by the Law Reform Commission is both necessary and desirable. That is why the Bill is now before the House.

I note the reference by Senator Neville to the high cost of insurance. Of course, we all acknowledge that the high cost of insurance is very serious for everybody but, while a passing reference is accepted, this is primarily a matter for the Minister for Industry and Commerce. However, I can assure Senators that he and his Department are actively engaged in monitoring insurance costs and in examining ways of reducing those costs. The Bill, lest we take it out of context, seeks to remedy an injustice and a possible unconstitutional provision in our law. If that results in an increase in the cost of insurance, that is the price society must pay for having a fairer system. I should point out, however, that when changes similar to those in the Bill were brought about in another country's law, there was no significant leap in insurance costs and I do not see why there should be any major increase in insurance costs here either.

I compliment Senators Neville and O'Donovan on their contributions. Any amendments or suggestions with regard to the Bill will be dealt with on Committee Stage. It is obvious from the contributions of Senators Neville and O'Donovan, as the two Senators who have contributed to the debate, that they welcome this amending legislation and I thank them again for their contributions.

Question put and agreed to.

Committee Stage ordered for Wednesday, 14 November 1990, subject to agreement between the Whips.