A landmark court ruling may change the way in which the insurance industry pays out compensation to personal injury claimants.
A recent Court of Appeal ruling where a mother was awarded more than half of her ex-husband’s compensation from a personal injury claim could pave the way for a new trend of claimants opting for periodical payments over lump sums of compensation.
Kevin Mansfield was involved in a road traffic accident in 1998. He lost a leg in the accident and suffered spinal injuries. He made a personal injury claim and received damages of £500,000. Five years later, he met his now ex-wife and they went on to have twins but subsequently split up in 2008. As part of the divorce proceedings, Mrs Mansfield claimed that she was entitled to a share of her ex-husband’s personal injury compensation.
The Court of Appeal ruled at the end of last month that the £500,000 compensation award should be regarded as an asset of the family, despite the payout pre-dating the marriage. The court ordered that Mrs Mansfield was entitled to £285,000 for the benefit of herself and her two children.
Sarah Hamilton, partner in Weightmans, commented: “This case may have an impact on how personal injury victims are advised by their solicitors when deciding how to accept their compensation.
“In serious personal injury cases, where high levels of damages are awarded, the court has the power to either award a lump sum, or periodical payments, usually on an annual basis for the rest of the claimant’s life.”
She continued: “In fact, both the lump sum and the periodical payments could be regarded as assets which the court might take into account in subsequent matrimonial cases.
“However it may well be that victims of personal injury who consider that divorce is a real possibility in the future have an added reason to opt for periodical payments – particularly in relation to future care needs – to avoid their spouse getting what they may consider to be an ‘unjustified windfall’.”
Original Article: Insurance Age
Medico Legal News Source: Claims Standards Council
