A Blueprint for Reforming Hong Kong’s Personal Injury Compensation

Abstract

The rationales behind and the effectiveness of the compensation for pecuniary and non-pecuniary losses in Hong Kong’s personal injury disputes will be examined in this project. Special consideration will be given to the assessment of damages for pain, suffering and loss of amenity (“PSLA”). On the other hand, the potential use of structured settlements or periodical payment orders (“PPO”) as a substitute for (or together with) lump-sum awards will also be examined. The primary sources of data comprise all judgments on personal injury issued by the Hong Kong Judiciary during 1976-2016. PSLA involves converting pain into dollars, which is not a process of mathematical measurement. It involves sound judgment and principled discretion guided by moral norms. For the purpose of constructing a coherent and logical framework, the statistical relationship between PSLA awards and other relevant factors, such as medical expenses, will be examined. In catastrophic personal injury cases, the lump-sum awards hinge on estimates of the claimants’ life expectancy and investment returns over inflation. However, claimants may exhaust their funds by surviving longer than their projected life expectancy, or due to lower-than-expected investment returns. PPO provide for regular payments over their lifetime, which are adjusted annually based on an inflation index. In this project, reforms focusing on PSLA and the use of PPO will be recommended.