The Supreme Court yesterday set out a formula which is likely to save the State millions of pounds in Army deafness cases.
It was estimated the formula, on lines proposed by the State, could lead to a one-third reduction in the final bill for the cases.
The formula, which provides for future age-related hearing disability and applies only to cases of up to 25 per cent hearing disability, could also lead to the establishment of a compensation scheme within the Department of Defence for soldiers suffering hearing loss and remove the cases from the courts altogether.
More than £95 million has been paid in hearing loss awards and legal costs by the Minister for Defence and some 10,000 claims are pending. Lawyers acting for the State in the hearing loss cases described the Supreme Court decision - in a test case - as a victory for the State. As well as saving on awards made to soldiers it would substantially reduce legal costs, they said.
The test case involved an appeal by the State against an award by Mr Justice Johnson, in the High Court, of £50,575 damages to Pte Kevin Hanley (36), of Old Cork Road, Limerick. The State had admitted liability for the soldier's hearing disability and the High Court was asked to assess damages only.
The appeal centred on what formula should be used in calculating damages for hearing loss. The State argued against the formula used by Mr Justice Johnson, claiming it was too generous and would lead to excessive awards. At the suggestion of the Supreme Court, the State advanced its own formula but accepted that, as the case was a test case, Pte Hanley would be able to keep his award, irrespective of the Supreme Court decision. Both the High Court formula and the State formula dealt only with hearing disabilities up to 25 per cent.
Yesterday, the Supreme Court rejected the formula advanced by Mr Justice Johnson and set out a more financially conservative formula. Because of the State's acceptance that Pte Hanley should keep his award, all five judges technically dismissed the appeal. All five judges endorsed the State scale but Mr Justice Lynch was alone in arguing it should be increased overall by 25 per cent.
In his decision, Mr Justice Keane stressed that the Green Book - which sets out criteria for assessing hearing loss - and the State formula, "although indispensable in setting out criteria for providing just and reasonable compensation" in Army cases, "cannot be applied rigidly in all cases without some risk of injustice".
Ms Justice Denham agreed the High Court scale leads to excessive awards and said the State scale was an appropriate guideline to determine cases in a just way and enable a consistent level of damages to be awarded. While the formula could be adopted as a guideline, the courts retained their discretion to make appropriate awards in specific cases in light of the particular circumstances and to adjust the awards accordingly.
Mr Justice Lynch also endorsed the State scale but held a minority view that it should be increased overall by 25 per cent. In the High Court, Mr Justice Johnson awarded Pte Hanley £50,575 on the basis he has a hearing disability of 9 per cent, including 2 per cent tinnitus, and that his disability from 60 years would be 22 per cent. The judge awarded £24,750 compensation for the 9 per cent disability from the time it commenced to age 60-62. From the age of 60 onwards, the judge was told it had been agreed the soldier would suffer an additional 13 per cent age-related hearing disability on top of his existing 9 per cent disability, making a total 22 per cent disability.
He awarded damages of £37,500 for this which was actuarially adjusted to £15,825. He awarded £10,000 for future loss of earnings. In his schedule for calculating damages, Mr Justice Johnson set a basic starting figure of £1,500 at age 60 years for each percentage point of noise induced hearing disability up to 10 per cent. That figure rose to £3,000 for each point at age 30 (for disability up to 10 per cent). If the disability was from 11-25 per cent, the basic £1,500 figures at age 60 and £3,000 at age 30 were doubled to £3,000 and £6,000 respectively.
The State argued this was too high. Its proposed baseline figure at age 60 was £750 for each percentage point rising to £1,500 at age 30. Mr Justice Keane, in his judgment, said that while the basic unit in the State scale should be the basis normally used for calculating loss in the Army cases, to that basic unit should be added, multiplied by the appropriate percentage loss, a further amount for Noise Induced Hearing Loss to the extent it will be aggravated by Age Related Hearing Loss at age 60, discounted for present payment and subject to actuarial reduction.
Mr Justice Lynch said the State scale did not make provision for the cumulative effects of noise induced hearing disability and additive age related disability continuing after 60 years. This could best be provided for by increasing the figures in the State scale by 25 per cent.
