Rationalising Full Compensation of Non-Pecuniary Damages to Reconcile Equal Treatment and Personalisation

Project Information

FullCompensation

Grant agreement ID: 101028723

DOI

10.3030/101028723

Project closed

EC signature date 20 April 2021

Start date 1 April 2022

End date 30 September 2023

Funded under

• EXCELLENT SCIENCE - Marie Skłodowska-Curie Actions

Total cost

€ 131 679,36

EU contribution

€ 131 679,36

Coordinated by

UNIVERSITEIT MAASTRICHT
Netherlands

Periodic Reporting for period 1 - FullCompensation (Rationalising Full Compensation of Non-Pecuniary Damages to Reconcile Equal Treatment and Personalisation)

Reporting period: 2022-04-01 to 2023-09-30

Summary of the context and overall objectives of the project

The FullCompensation project aimed to address the issue of variable and unpredictable non-pecuniary damage awards in the EU under civil liability law. Victims of accidents are entitled to compensation for both economic and non-economic losses, such as medical expenses and pain and suffering, respectively. While it's relatively straightforward to compensate economic losses (pecuniary damages), non-pecuniary damages are more problematic because they lack a market price, leading to subjectivity and biases.

To address this, adjudicators in some EU Member States are using guidelines to help judges award non-pecuniary damages more objectively and consistently. However, concerns remain about the variability and unpredictability of such awards within countries, leading to two critical societal issues. First, it can result in unjustified differences in damage awards for similar losses. Second, it can lead to economic inefficiency, making out-of-court settlements more difficult and increasing the costs of compensation for both individuals and society.

In response to this, FullCompensation aimed to develop a legislative proposal and guidelines for EU Member States and adjudicators to quantify non-pecuniary damages in a way that balances equal treatment and personalization. These documents are meant to inspire, not impose uniformity, and seek to promote fairness in damage awards and reduce the costs of compensation based on literature insights and empirical evidence.

Work performed from the beginning of the project to the end of the period covered by the report and main results achieved so far

FullCompensation's main results include a model legislative proposal and guidelines for EU Member States to quantify non-pecuniary damages while ensuring equity. The research involved literature reviews, comparative analyses of existing guidelines, case law reviews, interviews with adjudicators, and focus groups with stakeholders and policymakers.

Key findings include:

1. Stakeholder involvement is crucial to ensure the legitimacy of guidelines and minimize unwarranted divergences. The model legislative proposal outlines a framework for involving stakeholders and laypeople in guideline development and periodic revisions.

2. Variability in non-pecuniary damages can result from explicit and implicit avenues of flexibility in guidelines. To address this, the proposal suggests standardized monetary amounts with clear instructions on specific personalizing factors and their respective weight.

3. The use of local guidelines can lead to unwarranted disparities in awards. The proposal advocates for nationally uniform guidelines for non-pecuniary damage quantification.

In terms of dissemination, the model legislative proposal and the guidelines, accompanied by an explanatory note detailing the rationale of the proposed solutions, have been publicly shared in Dataverse and the website of the Open Science Framework. They have also been presented to academics and professionals at Maastricht University, as well as at the European Society for Empirical Legal Studies (ELSE) Conference at the Warsaw School of Economics (Warsaw, Poland) and at the conference "Scienza dei dati e innovazione al servizio del giurista" at the Sant'Anna School of Advanced Studies (Pisa, Italy). The national focus groups, as well as the periodic seminars at Maastricht University, were also an occasion to disseminate the project results to academics, stakeholders, and policymakers. The results of the project will also be further disseminated with three scientific publications, which have been submitted to international law journals for review. These publications will be in Open Access.

Progress beyond the state of the art and expected potential impact (including the socio-economic impact and the wider societal implications of the project so far)

The FullCompensation project explores non-pecuniary damage compensation with an interdisciplinary comparative-empirical approach involving various stakeholders. Results align with existing literature on issues like variability in damages within countries, attributed to flexible guidelines and local approaches.

However, the project uncovers new insights, revealing that unclear guideline instructions can lead to emotional and subjective decision-making, resulting in unwarranted disparities. Adjudicators often consider different factors and assign varying monetary weights without a clear rationale.

Additionally, the project emphasizes the importance of the perceived legitimacy and periodic revision of guidelines. Gender neutrality is addressed, suggesting that the loss of domestic work ability be compensated as pecuniary damage, with a proosed solution to ensure gender-neutral guidelines both procedurally and substantially.

The project's main outcome is a model legislative proposal and guidelines that integrate these insights with existing literature. These provide concrete solutions for Member States or adjudicators considering to establish or reform their non-pecuniary damage compensation frameworks, offering potential, practical solutions to promote fairness, predictability, and efficiency in compensation systems.

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