Damages to individuals who have suffered personal injury are regulated by the Tort Liability Act (Skadeståndslagen). Compensation is payable for costs, loss of income, pain and suffering, disfigurement, and other permanent conditions. The overall guiding principle is that an injured person shall be compensated fully for his or her loss.
The Traffic Damage Act (Trafikskadelagen) refers to the provisions of the Tort Liability Act that regulate the assessment of damages and the right of reconsideration. Also, Patient Insurance (Patientförsäkringen), Pharmaceutical Insurance (Läkemedelsförsäkringen), and Job Security Insurance (Trygghetsförsäkring för arbetsskada) basically follow the same provisions of the Tort Liability Act.
Reconsideration of Damages
In many circumstances, damages for personal injuries are determined at a point in time when it is still difficult to foresee what the full effects of the injuries will be. Often, the assessment is of necessity based on a variety of assumptions that eventually may prove not to be reasonably correct.
The Tort Liability Act offers a “safety net” by providing a right of reconsideration in situations where there is a significant change in the conditions constituting the basis for assessment of damages.
Initially, only damages for loss of income and loss of pension benefits could be subject to reconsideration. By a change of the Tort Liability Act that took effect on January 1, 2002, all types of compensation under the Act can be subject to reconsideration.
What Circumstances Qualify for a Right of Reconsideration?
According to the legislative preparatory works, the legislature is focused on the considerable deterioration of the injured person’s physical condition. The difference between assumed and actual injury should be of such significance to warrant that a reconsideration takes place, with the impetus linked to the change of circumstances rather than to the resulting difference in compensation that may follow. As would be expected, this fairly general statement has proved insufficient as guidance in the many situations that could occur. Thus, the court system has become involved — and will probably continue to do so.
Two Recent Supreme Court Decisions
The Swedish Supreme Court recently decided two cases on requirements for right of consideration:
I. Adjustment of Wage Levels in Previous Occupation
The claimant was injured in a traffic accident in 1986, and the claim was settled in 1991. It was then established that the claimant was fully compensated for loss of income by her social insurance benefits and additional compensation from Occupational Insurance (Arbetsskadeförsäkringen). At the time, Traffic Insurance compensation was not a consideration.
Eventually, the claimant noted that she was no longer fully compensated, as wages had increased in her former occupation, causing a deficit.
In a 1998 decision, the Supreme Court found that an adjustment to wage levels in the injured person’s former occupation qualifies for reconsideration. But, an additional issue remained: whether an accumulation of yearly increases of wages should be the basis for the assessment if the change was sufficiently significant or if the assessment should be based on each of the relevant years separately.
The Supreme Court noted that the benefits the claimant received (annuities from the Social Insurance and Occupational Insurance) corresponded to 88.4 percent of the wages she should have received had she not been injured in the traffic accident.
After a lengthy reasoning the Court further stated that a reasonable starting point when assessing if there is an essential change, which qualifies for reconsideration, is if circumstances have changed since the compensation was determined (also where it was determined to be nil) so that the remaining income and benefits do not amount to 90% of the income the claimant should have earned but for the traffic injury. Thus, the basis for the assessment should be the accumulation of wages.
Accordingly, the change was considered essential and the claimant entitled to reconsideration of her right to compensation from the Traffic Insurance (Trafikförsäkringen).
II. Fifty Percent Permanent Disability Pension Converted to 100 Percent
The claimant received a concussion from a traffic accident in 1993. She was granted a 50 percent permanent disability pension in 1998, and in 2001, her loss of income due to the traffic accident was settled.
The claimant’s physical condition eventually deteriorated. She was granted a full permanent disability pension in 2004,which resulted in a reduction of her total compensation by 3.6 percent, for which she claimed compensation from Traffic Insurance.
The Supreme Court stated initially that the right of reconsideration should be reserved for situations where the circumstances have changed considerably in comparison with what the parties anticipated when the compensation was decided. When a change is not considered essential, the matter can be tried again later if additional changes take place.
In a decision rendered in 2001, the Supreme Court arrived at the conclusion that the right of reconsideration never becomes time-barred. This came as a surprise to the Swedish insurance market. The “reconsideration claim” that can occur due to essentially changed circumstances is, however, subject to time bar pursuant to relevant legislation, in this case the Traffic Damage Act (Trafikskadelagen).
In this matter, the Supreme Court had to specifically decide whether the relevant circumstance had changed sufficiently for a right of reconsideration — or if the change has had an essential effect on the level of compensation.
The Supreme Court held that in cases where the future capacity of work has changed essentially (as it had in this one) there is a right of reconsideration regardless of how the reduced working capacity effects the loss of income.