Compensating 'Lucrum Cessans' to pensioners : a review of local jurisprudence

Abstract

This Research Project comprises an analysis of Maltese judgements concerning tort victims who have reached pensionable age who claim for compensation due to the damages suffered as a consequence of the tortfeasor’s actions. What is particularly examined is the manner which local Courts assess damages for lucrum cessans to reimburse the injured party who has reached pensionable age at time of the tortious act. Due to the lacuna in the law, the method for calculating damages for lucrum cessans has always been an issue for the Courts and consequently there have been various theories and approaches taken by different judges. The formula for calculating damages for lucrum cessans established in the landmark judgment Butler vs Heard has been the best method for calculating this head of damages so far. However, if the Courts strictly follow this formula a pensioner would not be compensated or adequately reimbursed for any future damages. This research shows that although the Courts have faced various issues when calculating the pensioner’s damages, they have nevertheless exercised their discretion and compensated the tort victim damages for lucrum cessans. This has been done by either tweaking the formula and adapting it to the circumstances of the case or calculating damages arbitiro boni viri and awarding an amount which the Court feel proportionate to the particular circumstances of the case. The main issue in regard to compensating lucrum cessans to a pensioner is his/her advanced age and the fact that at retirement age one is assumed to have stopped from engaging in any activity which generates an income. Therefore it has been argued that a pensioner is not entitled to be compensated for loss of future income since he/she does not suffer such loss given that he/she has retired and is benefiting from the pension allowance. Nevertheless, this paper reveals how local Courts tackled the relevant issues particularly how they have interpreted and determined the pensioner’s loss of income, the multiplier and the percentage of disability in relation to assessing damages awarded to a pensioner.