Damages for Death & Personal Injury in Spain: The New Act
After five years of preparation, on 1 January 2016 the new system for the assessment of damages for death and personal injury caused by traffic accidents in Spain came into force. The new system has been approved by Act 35/2015 which is an amendment of Act 8/2004 on Civil Liability and Insurance of Motor Vehicles, which remains in force.
The new scale system (‘Baremo’) appears as a new section within Act 8/2004 and replaces the old scheme which relied on a number of tables included in the previous Annex 1 to Act 8/2004. This, generally, provided for lower awards for death and personal injury and had become outdated.
The main purpose of the amendments is to make the Spanish compensation system consistent with European Directives and to bring it in line with the requirements of the EU Commission, which considered that Spanish compensation payable to victims in cases of road traffic accidents was unfair in comparison to similar awards in other EU countries.
Although, in theory, the Act only applies to the calculation of compensation resulting from road traffic accidents, as was the case previously, insurers, lawyers and claimants expect that it will be used by judges as a guideline for compensation in respect of all kinds of death and personal injury claims, regardless of how they arose.
Consequently, Spanish insurers and others involved in the Spanish insurance market are reassessing risks and calculating their potential liability in Spain under the new system. The Spanish Government has estimated a possible overall increase in compensation payments of around 50% in cases of death and 35% in cases of permanent injuries.
The new system is based on the civil law principles of full reparation of the victim, structured compensation and objective damage and it sets out new rules under which compensation is to be assessed.
Broadly, it extends the scope of compensation both in the range of people who can bring a claim and the heads of damage which can be claimed. In addition, it provides for increased amounts to be awarded where compensation was already available.
For instance, one of the areas which has been developed, in particular, is compensation for financial losses suffered by the claimant which was not addressed adequately under the previous system.
Insurance companies were in favour of having a structured scheme by which both personal injury and pecuniary losses must be calculated separately and by which, in addition, only compensation contemplated by the system can be awarded. It is hoped that this will provide consistency in awards and resolve the uncertainty of the old scheme by putting an end to the discretion of the Judges when awarding damages which are not duly proven or medically supported.
The Act’s 147 articles cover in depth all aspects of the procedure for claiming damages for death and personal injury. The Act also includes 470 pages of tables with figures for compensation in respect of each kind of injury.
Damages. Ultimately, the ‘Baremo’ distinguishes between three types of claim: death, permanent physical injury and temporary injury. In each case, the claimant might recover three possible types of compensation: basic personal injury compensation; individual personal compensation (moral damages and loss of domestic autonomy and/or quality of life); and compensation for financial loss (expenses and loss of earnings).
New Categories of Claimant. The new Act includes new prejudiced parties in addition to those included under the old system. For example, in fatal cases, besides the victim of the accident, Article 62 now includes: the surviving spouse, ascendants, descendants, siblings and close companions. The figure of a close companion as a prejudiced party has been very controversial because of its wide definition, but the new system has allowed it and it could include any person who can prove a close relationship with the deceased during the last five years before their death.
Procedure. The Act establishes a new procedure to claim for damages for death and personal injury in case of a road traffic accident which is intended to favour out of court settlements and encourage parties to avoid litigation. Thus, some examples of this new framework are: i) the compulsory cooperation of the claimant in allowing access to medical experts appointed by the responsible party or their insurer prior to commencing proceedings; ii) the obligation on the responsible party/their insurer to submit any offer to the claimant based on medical criteria; and iii) the application of accrued interest to be imposed whenever there is unjustified delay in submitting an offer.
In addition to extending the category of claimants, the principal development in this regard is the introduction of compensation for the loss of dependency suffered by any dependant (categorised as an aggrieved party) of the deceased according to the applicable tables. The new Act also contains a fixed compensation of 400 euros which is to be added to the reimbursement of any specific costs incurred, such as repatriation costs or funeral expenses.
Sequelae or Ongoing Symptoms
Sequelae are defined as permanent injuries which remain after the conclusion of any medical treatment.
The basic damages for sequelae cover psychological and physical harm and also aesthetic consequences, which are calculated separately. The ‘Baremo’ contains tables with numeric values assigned to a long list of bodily injuries. Once the particular injury is located within these tables, the figure for compensation in respect of each particular type of injury can then be calculated using an economic table.
The ‘Baremo’ also contemplates compensation for the loss of quality of life of a relative who undertakes the role of carer.
As under the previous system, basic damages will include a daily rate of compensation from the day of the accident until the date when the healing process is concluded.
Although the ‘Baremo’ is intended to encourage the parties to reach out of court settlements, in practice the insurance market expects an increase in the number of claims being made. This is largely due to higher expectations created by the increased amounts of compensation and the extension of the category of parties entitled to claim. It seems likely that the new figures will be embraced by judges when assessing compensation outside the field of road traffic claims. However, it remains to be seen whether the procedural developments will also have an effect in those cases.