Amendment No. 8 is an alternative to amendment No. 7 and amendment No. 18 is related to amendment No. 7. Amendment No. 19 is an alternative to amendment No. 18 and all may be discussed together. Is that agreed? Agreed.
SECTION 2.
I move amendment No. 7:
In page 3, subsection (1)(a), line 32, to delete "£15,000" and substitute "£20,000".
The maximum amount of compensation payable for mental distress in fatal injury cases is set at £15,000. My amendment Nos. 7 and 18 would increase that figure to £20,000. As I indicated on Second Stage, damages for mental distress in fatal injury cases were first introduced in 1961. The maximum level was fixed at £1,000. This was increased to £7,500 in 1981. It is important to recognise that the compensation provided for mental distress under the 1961 Act is a form of solatium or compensation for injured feelings. It is intended to give solace to the claimants and has its basis in the principle of ethical compensation. I also stress that damages are in addition to what may be awarded by way of general damages or special damages.
The maximum figure of £15,000 in the Bill as it stands was the subject of much discussion on Second Stage and I undertook to look at it again. That figure takes into account increases in the consumer price index since the 1981 Act increase. However, I was impressed by some of the arguments put forward in the House for a bigger increase. Had I initially stuck rigidly to the change in the CPI between 1961 and current values the figure would have been less than £14,000. Instead of £15,000 I propose £20,000. Deputy Lenihan suggested a figure in the region of £20,000 to £25,000; amendments Nos. 8 and 19 propose £30,000. I believe that £20,000 strikes the right balance and my amendments provide for that.
I am happy with the amendment. Initially, there was an increase from £7,500 to £15,000 and on Second Stage this was felt to be too tight. We wanted it to be increased and proposed £30,000. That proposal was based on the increase in inflation without taking in the increase in house prices of about 25 per cent announced today. That was not included in these calculations which are based on figures up to the first quarter of 1996. However, prices have increased a good deal in 1996. Two different yardsticks can be taken and the Minister, as I pointed out at the time, took the consumer price index as his yardstick. He went modestly above that from £14,000 to £15,000. If the figure is to be taken on the basis of house price inflation the figure should have gone to £30,000. In 1961 one could have bought a house anywhere in the country for an average price of £2,128. Some people find that hard to believe.
I bought mine in 1960.
Touché, so did I. The inflation in house prices has been——
That was before my time.
The Deputy was surely born then.
(Carlow-Kilkenny): She was only interested in dolls’ houses at that time.
In the first quarter of 1996, before the rapid inflation of house prices mentioned in today's statement, the same house would have cost £61,377. It would now cost even more.
(Carlow-Kilkenny): That is because of a booming economy, not inflation.
We must be careful that it does not become a spendthrift boom but there will probably be plenty of discussion about that on the Estimates.
I have not heard the phrase "rapid inflation" for years.
That is because of the Government's good policies.
It is just spending now. The Minister is being reasonable in going in the direction we requested. It is important to bear in mind that some people can make no other claim for compensation and consequently this amount becomes important for them.
A question which arises both now and on a later section concerns how this money is spread between members of a family — in recent times we have seen a sum being spread between a widow and up to 12 children. There should be a method whereby the number of children can be taken into account so I ask the Minister, between now and Report Stage, to come up with a formula which provides for the differences in family sizes. One case may involve a widow on her own, in another the widow may have five or more children, yet when the father is lost the overall sum given is the same. In many cases it is the father who brought income into the household. Perhaps an amendment could be brought forward to meet that point. I appreciate it will be difficult to devise one. I will look further at the matter before Report Stage. I accept the suggested amendment and I thank the Minister for listening to what was said on Second Stage and for increasing the amount to £20,000.
At the end of Second Stage the Minister said he would re-examine the figure and he has done so. Although the amount he proposes is a compromise and is lower than I would have liked, at least he listened to the arguments put and from that viewpoint I am prepared to accept his amendment and withdraw mine. During the course of that debate we had much discussion on how the amount should be fixed. We also discussed how the money would be divided if a number of family members were involved; that is a different issue but the Minister's amendment goes some way to alleviating that concern.
Amendment agreed to.
Amendment No. 8 not moved.
Amendments Nos. 9 and 20 are related and we can take them together. Is that agreed? Agreed.
I move amendment No. 9:
In page 4, subsection (1)(b), to delete lines 17 to 24 and substitute the following:
"(1B) A draft of every order proposed to be made under subsection (1A) shall be laid before each House of the Oireachtas and the order shall not be made until a resolution approving the draft has been passed by each House.',".
This is to provide for a positive resolution whereby the House will have an opportunity to look at the matter. The Bill currently provides that:
Every order made under subsection (1A) shall be laid before each House of the Oireachtas as soon as practicable after it is made and, if a resolution annulling the order is passed by either House within the next 21 days on which that House has sat after the order is laid before it, the order shall be annulled accordingly, but without prejudice to any cause of action that accrued while the order was in effect.
This provision is an amendment to the Principal Act. Our amendment proposes that the order shall not be made until a resolution approving the draft has been passed by the Houses. On Second Stage I pointed out the procedural point made in Irish Current Law Statutes Annotated, published by Sweet and Maxwell, which stated that the requirement that a draft of every order proposed to be made under section 16 (1) of the Courts Act, 1991 be laid before each House and that a resolution of both Houses approving the draft be obtained provides an important degree of scrutiny by the legislature. Together with the fact that this provision clearly specifies that such orders may only vary the jurisdiction limits in accordance with the change in the value of money, this would appear to guarantee the constitutionality of the delegation of legislative power provided for in section 16 (1). My amendment would provide for such a positive resolution.
The Bill as it stands provides that the Minister may, at any time, having regard to changes in the value of money generally, by order vary the monetary amounts specified in sections 2 and 4 for awards of damages in respect of mental distress in fatal injury cases. Every order so made by the Minister must be laid before each House of the Oireachtas as soon as practicable after it is made. Such orders may be annulled by resolution of either House within 21 days of the order having been laid before the Oireachtas. The purpose is to provide an effective and efficient mechanism for updating the amounts in question in line with changes in monetary values. It obviates the necessity of having to introduce amending legislation in the future to keep amounts in line with increases in the consumer price index.
Amendments Nos. 9 and 20 provide that a draft of every order proposed to be made "shall be laid before each House of the Oireachtas and the order shall not be made until a resolution approving the draft has been passed by each House". The amendments are unnecessary given the non-contentious mechanism which will apply to any increases in the future.
I welcome the inclusion of subsection (1B) which goes a long way to meet the requirements of openness and accountability to the House. The positive order goes a step further but I will not press the matter.
Amendment, by leave, withdrawn.
Amendment No. 21 is related to amendment No. 10 and they may be taken together. Is that agreed? Agreed.
I move amendment No. 10:
In page 4, subsection (1), between lines 35 and 36, to insert the following:
"(d) by the insertion after subparagraph (ii) in subsection (l)(a) of the following subparagraph:
‘(iii) where appropriate, aggravated and/or exemplary damages.'
(e) by the deletion in subsection (l)(b) of 'amounts awarded' and the substitution of 'amount awarded to each person'.".
The question of exemplary damages arose on Second Stage when the traumatic death of Mrs. McCole focused our minds on the issue. This amendment seeks to include a provision in the Bill whereby if death is caused by wrongdoing by a person or somebody acting on their behalf it would be possible to award exemplary damages. Such a provision would be appropriate to this Bill. We should also examine the amount awarded to each person, not only the amounts awarded.
Amendments Nos. 10 and 21 are being taken together. Should amendment No. 24, which also deals with exemplary damages, be taken with them?
The issues raised by these amendments are complex. These amendments deal with exemplary damages and also the question of separate amounts for each person, whereas amendment No. 24 only deals with exemplary damages. However, it might be taken with these amendments.
Is that agreed? Agreed.
Amendment No. 24 provides that exemplary damages may be awarded where the death was procured by a deliberate act of the wrongdoer or other parties acting on his behalf or in consort with him, or the death is as a result of actions of the wrongdoer or other parties acting on his behalf or in consort with him which were reckless as to whether death could result therefrom.
The amendment also provides that section 7(1) of the Principal Act will not have effect "in relation to a cause of action that commenced by the issue of proceedings before that subsection comes into operation".
The purpose of the amendment is to enable exemplary damages to be claimed and awarded where the death of a person is caused deliberately by the act of a wrongdoer or another person acting on his behalf. Why should the assets of a criminal, a drug baron for example, who kills or arranges for someone else to kill for him be immune from exemplary damages? Under the present law they are not immune from suit but they are immune from exemplary damages.
This amendment would give a right of action to the dependants of the victims of drug pushers — this would include the children. In circumstances where a drug baron hides behind the pusher there may be difficulties with proof but it would be worthwhile having the possibility of an award of exemplary damages against a drug baron. If a drug baron or a major criminal carries out a killing their assets should be subject to normal and exemplary damages.
This is a provision that would have widespread support because people would like to see such criminals subject to exemplary damages. The families of the victims would at least receive appropriate compensation.
I do not wish to cause the Minister to have palpitations when I express sympathy for the views expressed. On Second Stage I expressed the view that damages for mental distress should be considerably increased. I am glad that some progress is being made in that regard.
It is worthwhile that the issue of exemplary damages is discussed. Our thinking on the issue of damages for injuries and fatalities has developed largely from the many claims arising from road traffic accidents. A relatively new issue which arises is that of serious injury or death resulting from the activities of criminals. In the past the criminals involved in such activity had no assets and the issue was not relevant. However, the circumstances have changed. What would happen if the claim against O. J. Simpson was being heard in Ireland? It is an issue that bears some reflection.
Deputy Woods referred to the substantial assets accumulated by those involved in the drugs trade and they must be borne in mind. The Commissioner of the Garda Síochána did not like us referring to these people as drug barons; I do not recollect what he thought their appropriate title should be. These armed criminals accumulate major assets and are involved in heinous activity of all kinds, including murder. If the question of a civil claim arises against a criminal by the dependants of somebody murdered I would want him or her to be milked for every last shilling. I would not want any restriction placed in the way of the victim's next of kin. It is appropriate that we should take cognisance of developments in that area. If the Minister cannot accept the amendment at this stage, he might at least give an indication that the book is not closed on this issue.
Section 49(l)(a) of the Act of 1961 allows damages to be awarded in fatal injury cases to dependants for loss of pecuniary benefits and for mental distress. Amendments No. 10 and 21 propose in part that subsection l(a) should also allow, where appropriate, aggravated and/or exemplary damages. The amendments also propose that damages for mental distress should be available to each of the dependants and not. as at present, for the benefit of all dependants as a class.
In so far as exemplary damages are concerned, the amendments raise considerable questions of principle and some complexity. In reply to the debate on Second Stage I outlined the background for the provisions which exist in law to deal with compensation in fatal injury cases. That background is relevant to the debate on these two amendments because it helps to put matters in context and to inform debate. I should like first to point out the more important features of that background.
Courses of action in tort were, under common law rules, generally destroyed by the death of either party. The harshness of that was remedied by special legislation. The present statutory provisions are as contained in the Civil Liability Act, 1961, which makes clear that, with the exception of actions for defamation, all causes of action which vest in the deceased survive for the benefit of the estate. Those rights are in addition to the special rights conferred on dependants in Part IV of the 1961 Act.
Part IV of the Act is designed to benefit certain family dependants who may suffer loss by the death. The damages are for each dependant's pecuniary loss, actual or prospective. Funeral expenses may also be recouped by the defendant who discharges those expenses. The damages for mental distress are awarded for the benefit of the dependants as a whole. The damages awarded under Part IV of the Act are, by virtue of section 7(4), in addition to the rights conferred in that section for the benefit of the estate of the deceased. This means that awards made by way of general or special damages are not affected by the damages awarded under Part IV to dependants of the deceased.
The point about damages in general is that they are an award to put the plaintiff in the same position after the commission of a civil wrong or tort, as it is often called, as he or she was in before, as far as money can do this. Exemplary damages on the other hand, which are the subject of these amendments, are rarely awarded under the law as it stands because they are awarded only to demonstrate the court's desire to punish the wrongdoer. Such damages go beyond the amount required for mere compensation. These two amendments differ from amendment No. 24 tabled by Deputy Woods in the sense that the exemplary damages in his amendment would benefit the estate of the deceased. Amendments No. 10 and 21, on the other hand, would benefit certain prescribed dependants. That statutory law recognises the concept of exemplary damages is clear from section 7 of the 1961 Act, albeit in the negative sense of excluding such damages where they would benefit the estate of a deceased.
The amendments would also allow aggravated damages. Commentators on the concept of aggravated and exemplary damages have stated that Irish law recognises the concept of aggravated damages as a category of compensatory damages awarded as a response to particularly offensive conduct by the respondent and that in theory they are distinct from exemplary damages. However, in practice the distinction is not clear. The law on exemplary or aggravated damages — unlike law on the tort of negligence, for example, which has for a very long time been the most important tort of the day and has been developed mostly by case law — has not been developed to any great extent in courts here or in England. That lack of development makes for particular difficulty when, as now, it comes to making informed decisions about the further use that should be made of a concept in our law.
That question was raised in England a few years ago when the matter was referred to the Law Commission there for consideration and to make recommendations. The commission produced a wealth of material in a consultative paper on the subject in 1993 but a final report has yet to be published. Points which emerged from the English Law Commission paper are that while compensatory damages enjoy unquestioned acceptance in the civil law, non-compensatory damages, that is to say, exemplary or aggravated damages, have tended to be problematic and require justification.
English case law indicates, the commission says, that exemplary awards confuse the civil and criminal functions of the law. This is because of the understanding that the function of damages in civil law is solely to provide compensation for loss. The clear function of the criminal law, on the other hand, is to punish and deter wrongdoers.
The main consideration in the paper was whether awards of exemplary damages are ever justified and, if so, in what circumstances. As in Ireland, exemplary damages have been available in England in very limited categories of case. While some other countries such as Australia, Canada and New Zealand have legislated for a broad punitive principle in their civil law codes — codes which do not necessarily correspond to those in Ireland or in England — an extreme form of punitive damages exists in the USA and has led to some difficulties in what is essentially a compensation culture. Many states in the USA have introduced measures designed to curb excessive awards of exemplary damages. As an example of the diversity of approach in jurisdictions, I might add that in Scotland it appears that exemplary damages do not exist but that aggravated damages exist in a limited number of cases.
The provisional view of the Law Commission paper is that awards of exemplary damages can be justified. The paper attempts to formulate principles upon which they could be based and has sought comments on those. Crucially, the commission concludes that existing law is in an unsatisfactory and unprincipled condition and rejects the suggestion that the status quo be maintained. Subject to the views of consultees, the commission suggests that exemplary damages be retained, but on a principled basis. It favours modifying the existing law at the same time as rationalising the remedy and suggests that exemplary damages in that overall context might be allowed to survive for the benefit of the estate of the deceased.
The concept of exemplary and aggravated damages is not only contentious but complex and a lack of clarity surrounds it. I am not satisfied that amendments No. 10 and 21 in the form in which they are presented, without any guidelines and without regard to the consequences for other areas of the law of tort, is the way to proceed at this time. Much more study needs to be done on this area before decisions can be properly made on its inclusion in statute law.
I refer now to the second parts of amendments Nos. 10 and 21. The 1961 Act's provision under which the maximum amount of compensation is prescribed for mental distress and fatal injury cases is the total amount that may be awarded to dependants as a class of persons. Amendments Nos. 10 and 21 purport to allow the maximum amount to apply to each dependant. On that basis, the overall amount to be awarded could be upwards of £100,000 and more in some cases, depending on the number of dependants.
Damages for mental distress are a form of solacement or compensation for injured feelings. They are in addition to what may be awarded by way of general or special damages. In most actions under part 4 of the 1961 Act in relation to fatal injury cases, the substantial damages payable are those which relate to the loss of pecuniary benefits which take account of the deceased's income and future prospects. Those damages are fixed by the court to compensate for the dependant's future losses. The 1961 Act's provision regarding compensation for mental distress was not framed to place a monetary value on the life of a deceased person. It does no more than recognise in some tangible way the distress caused to dependants by the loss of a person close to them. It is intended to give solace to dependants and has its basis in the principle of ethical compensation. It is no more than that and to attempt to elevate it, as these amendments attempt, to a form of monetary compensation would fly in the face of the principle of an award for mental distress. These amendments would fundamentally change the code of law which applies to fatal injury cases. They ignore the existence of various other heads of damage which already apply to the dependants. Therefore, I cannot accept these amendments.
The Minister might wish to look at amendment No. 24 as we have had no reply on that.
Similar comments would apply here.
That applies to the estate, as the Minister said.
Yes. There is that difference. I am not unsympathetic to the generality of what is being discussed. The English Law Commission prepared a provisional paper but have not given their final report yet. It might be an opportunity for me to consider whether or not I should recommend to the Taoiseach that a report be commissioned on this subject from our Law Reform Commission. I am prepared to consider that.
I thank the Minister for his comprehensive reply. It was a long and complex answer but his comment on the Law Commission in England struck me immediately. This would be part of the work of our own Law Reform Commission to examine this area. From the interim information it appears that the issue is being examined sympathetically. The same attitude would be taken by the Law Reform Commission if they examined it. The Minister has set out the difficulty of encompassing this amendment in the Bill because of these complexities but it was good to hear Deputy O'Keeffe say this opens the door to examining this area. One is recognising the mental pain people go through when a relative is killed. For all of us who have suffered bereavements, those as a result of any form of wrongdoing are even more difficult to bear. That should be recognised, whether it is the result of crime or not.
I have seen at first hand the effect on a family of the murder of a young woman. The depth of feeling and the effect on her husband and family was such that no money would compensate them. In those circumstances it is appropriate that they should be able to seek exemplary damages. The punitive nature of criminal law as opposed to civil law means one would expect those people to be able to seek damages. Nobody could say that people can be dissuaded from criminal and violent behaviour but this would be another way to show society's abhorrence of it. The Minister is sympathetic to the principles put forward. Within the context of this Bill he might be reluctant to accept the amendments as framed. I would be grateful if he would request the Law Reform Commission to examine this matter further.
I will consider this sympathetically.
I too thank the Minister for his explanations. I felt as though I were taking notes on the subject in the courts. He gave a very good review of the position which will be useful. In that review the Minister said that exemplary damages are rare, only showing a desire to punish. I could say that is what we are talking about. We want to show a desire to punish, especially in cases involving a major criminal known to be a drug baron, although that is not a term the Commissioner likes. These criminals have substantial resources of ill-gotten gains. If one is to award exemplary damages, by definition one is trying to make an example. By doing so, one might be crossing from criminal to civil, but one should make a double example. That may seem strange to the academic looking at the law logically, but it has taken years to get to the seizure of assets. That is the classic case of making an example by seizing the assets as well as implying other criminal sanctions. One then hits the drug baron in his or her pocket, using that as an example to say to the community that we do not accept this. It is horrific and they will not get away it, either criminally or financially. We will take more money from them and give an exemplary amount of damages to the victims.
The recent murder of Veronica Guerin has made us think about this. It was so calculated and cold-blooded that the nation cried out for an example to be made of the perpetrators. The Garda and other authorities are doing their utmost to pinpoint the people responsible. This House, for its part, was prepared to proceed with legislation on the seizure of assets which the Government had been reluctant to do until the murder. We had gone far but were prepared to go further.
In cases such as this, we would have added financial sanctions as well as the usual criminal ones. They would have prevented such crimes happening by financially hurting the perpetrators as well as jailing them. Prison does not bother these people because they have significant power, control and influence both inside and outside prison. It was in that spirit that we tabled these amendments.
I ask the Minister to think again about this question for Report Stage. He may feel it is too difficult to do something but I ask him to examine it again nonetheless.
The situation which used to pertain with regard to death by accident was that it was cheaper to kill than maim. There have been developments in the law over the years and, to some extent, the wheel has now come full circle. Changes have taken place over the years arising from the development of the laws of dependency and on mental distress. Deputy Woods is correct that the cruel murder of Veronica Guerin has concentrated many minds and the perpetrators of that deed may have substantial assets. If that is the situation, all would like to see them hit where it hurts. Veronica Guerin cannot be brought back and the pain of her husband and child relieved. While it would mix criminal law with civil law, there is a strongly-held view that there is a case for exemplary damages in such a case.
On the other hand, I take the cautionary point raised in the Minister's response, that we do not want to go overboard and develop the pervasive compensation culture of the United States. The subject requires further study. Our mission today will have been successful if we succeed in opening the debate on this area, leading to further review and discussion, so that a temperate and moderate response can be available soon.
I thank Deputies Keogh, Woods and Jim O'Keeffe for their comments. It is good to have a preliminary discussion on this important subject. It is extremely complex and will require careful examination and great care. I regret that it will not be possible to deal with it by Report Stage. If it is to be progressed, it must be by way of asking the Law Reform Commission to examine the subject and see how it would impact in all its numerous aspects.
The desire to punish was referred to and that is primarily a matter for criminal rather than civil law. We must also take into account that, while cases such as Veronica Guerin's are highlighted in our minds where fatal injury claims are concerned, the overwhelming majority of cases arise out of road traffic accidents. The number of cases arising out of criminal activity which would have gone to the courts would be minuscule and possibly none have gone. Road traffic accidents form the overwhelming bulk of cases and numerous considerations come into play such as effective insurance premium, amounts of money, applicable cases, etc.
I thank Deputies for their contributions and for raising an important matter. I will give careful and sympathetic consideration to the question of asking the Taoiseach to refer the matter to the Law Reform Commission for examination and report.
Notwithstanding that Deputy Woods said, he would like movement on this matter before Report Stage. The Minister has heard the unanimous call from the committee that something be done to redress an apparent imbalance in the law. It is the cross-party view of the committee that early consideration should be given to the matter and that it should be brought to the attention of the Taoiseach and the Minister's colleagues in Government. The Minister would have the full backing of the committee were he to do so.
Amendment, by leave, withdrawn.
Amendment No. 11 not moved.
Section 2, as amended, agreed to.
Amendment No. 12 not moved.
Section 3 agreed to.