OpinionDamages ruling may lead to rise in insurance premiums

Insurers are anxiously awaiting a court ruling on damages claimed by two patients from the Hospital Authority after they were left paralysed following alleged mistaken medical procedures when they received treatment at hospitals.

The High Court case finished on Friday and a ruling is now expected in several weeks that could, insurers fear, lead to a substantial increase in damages and compensation claims arising from similar incidents.

If that happens then insurers will face higher compensation payouts and customers may need to pay higher premiums for policies covering personal injuries.

A key issue in the landmark court case was whether the judge would stick to applying the standard 4.5 per cent expected investment return on the compensation sum awarded for personal injuries, or whether it would fall in line with the outcome of a Guernsey court case which saw the use of a lower expected return, and therefore a higher initial lump sum compensation.

If a lower return is used, the compensation awarded will be higher.

Typically, hospitals and doctors purchase liability insurance to protect themselves from claims arising from medical mistakes. This is why insurers are concerned about the case as they have to pay the compensation.

The outcome could also affect how compensation awards are calculated for all other personal injuries arising from such events as car accidents or workplace accidents. In all these cases it is for the High Court to determine how much compensation should be paid, and to arrive at a lump sum figure the court will need to consider what return could be generated by the lump sum.