The new method for the assessment of damages under Spanish law

 Assessment of damages, new method

Assesment of demages, by David SánchezThis article intends to serve as a first point of contact with the new Spanish regulation for the assessment of damages in personal injury claims that is coming into force 1 January 2016.

In principle, this system is only compulsory for the assessment of damages arising out of road traffic accidents (RTAs), but it is standard practice to use this assessment method in other personal injury matters as well.

The new regulation (the so-called New Baremo, ‘NB’) has been enacted under Act 35/2015 of 22 September 2015 amending Royal Decree 8/2004 of 29 October Regulations on civil liability and insurance in road traffic matters and although it continues to be based on a compulsory fixed tariff method for the assessment of non-pecuniary losses, the NB introduces major developments
in particular in respect to the assessment of pecuniary losses.

I will now summarise those aspects of the NB that constitute a major development in the assessment of damages for personal injury in Spanish law.

Assessment method for the valuation of personal injury in the NB

The NB establishes two main categories of injuries that entitle the injured victim to compensation:

  1. Award for persisting symptoms

    Under Spanish law the victim of an RTA is entitled to an award for damages for the nonpecuniary losses arising out of the permanent symptoms caused by the RTA, ranging from the most severe injuries (tetraplegia, paraplegia, etc) to minor injuries such as whiplash injury.

    The award for persisting symptoms will compensate the victim for the intangible losses arising from the physical and psychological pain and suffering arising out of the accident.

    This award will be made on the basis of a points system where each type of injury will attract a certain number of points (eg, arm amputation: 45-50 points, post-traumatic arthrosis of the ankle: 1-8 points, etc). The judge will determine the number of points within the range given considering the severity of the injury and each point will have different economic value depending on the age of the victim and the number of points accumulated.

    On top of this award, the victim will be entitled to claim an additional compensation where as a result of the injuries his/her quality of life is affected on a permanent basis.

    Additional compensation

    In particular, the NB provides that the victim is entitled to a lump sum payment in the region of €90,000 to €150,000 to compensate the psychological damage where the victim is unable to perform the essential activities of his day to day life (getting up, getting dressed, eating, etc).

    The NB further provides that the victim is entitled to a lump sum payment in the region of €40,000 to €100,000 to compensate the loss of amenity where he/she is no longer able to perform most of the socalled ‘personal development activities’, including those aimed at achieving personal fulfilment (leisure activities, social sport, sports, development and performance of a professional career).

    The precise amount within those ranges will be determined on the basis of the age of the victim and the number of personal fulfilment activities impaired.

    On top of the compensation for nonpecuniary damages, the victim will be able to claim for the pecuniary losses arising out of the accident, including the loss of earnings. The NB puts an end to a poorly conceived system where the injured party could only recover a small part of the economic loss arising out of the RTA.

    The NB contemplate lifelong medical treatment for the seriously injured victims, to be provided by the insurers or the Spanish Social Security at the costs of the insurers. As a novelty, the NB further provides that the victim is entitled to recovery of future replacement costs for orthopaedic items. The same applies to rehabilitation treatment in the event of severe injuries.

    Increase of the award

    Also favourable to the victim is the increase of the award for home refurbishment expenses where the victim’s home requires adaptation as a consequence of his injuries (up to €150,000).

    The NB further provides specific compensation for future travel expenses. The newly regulated award for travel expenses will take into consideration the extent to which the mobility of the victim is compromised as a consequence of his injuries and will award compensation up to €60,000. Unlike the old system, the NB will take into account future vehicle adaptation costs.

    Another major advance of the NB is the new approach in respect of care and assistance, which contemplates compensation for gratuitous care and assistance provided by family and friends. The NB includes detailed tables setting out the number of hours of care and assistance that is required for each type of injury taking into consideration the age of the victim and the nature of his injuries.

    Future loss of earnings

    Another major development of the NB is the regulation of the award for future loss of earnings. In the old system the award for future loss of earnings was calculated not by reference to the victim’s expected loss but for the accident, but rather as a percentage uplift to the non-pecuniary damages in accordance with the statutory tariffs.

    In accordance with the NB and where the victim is no longer able to carry out any remunerated job, the claim for future loss of earnings will take into consideration the full loss of earnings until retirement age. The calculation will also take into account factors such as the public pensions to which the victim may be entitled.

    In the event of victims who are no longer able to perform their pre-accident occupation but are able to perform other types of remunerated work, the quantum will be calculated taking into consideration 55 per cent of the victim’s annual earnings until he is 55 years old and 75 per cent from then on until retirement age.

    Where the victim is partially unable to perform his pre-accident remunerated job, the award shall be calculated taking into consideration two years of income.

    The NB also takes care of those exclusively dedicated to household chores (eg, housewives) who will be entitled to claim for future loss of earnings even though their job is not remunerated.

  2. Award for temporary injuries

    This typically Spanish concept of ‘temporary injuries’ continues in the NB. Basically it refers to the damages during the period of time until the injuries of the victim stabilise.

    The NB contemplates a daily award during that period of time where the Claimant is ‘temporarily injured’ ranging from €30 (if the victim has been able to resume his daily activities but his injuries have not yet stabilised) to €100 per day (if the victim is hospitalised in the intensive care unit of a hospital).

    Finally, on the award for temporary injuries, the NB contemplates the recovery of the travel expenses incurred by family and friends to visit the victim in hospital, which was not contemplated as recoverable under the old Baremo rules.

To summarise, on 1 January 2016 a new method for the assessment of damages will enter into force in Spain that will bring higher damages for victims and the possibility of recovering heads of loss that were not recoverable under the old regime.

View profile David Sánchez Almagro