Fundamental ruling on forfeiture of the right to loss of earnings

In a recent ruling, the Supreme Court determined that a loss of capacity for work led to a forfeiture of the right to compensation for loss of earnings even though the loss of capacity for work was subsequently changed.

During maternity leave, a woman was involved in a traffic accident resulting in permanent injuries. After the leave, she went back to working part-time, and seven months later, she went on maternity leave again.

After returning to work the second time, she was very frequently reported sick, and she was therefore dismissed and subsequently granted early retirement pension.

The National Board of Industrial Injuries changed the loss of capacity for work significantly

In order to fix the woman's loss of capacity for work due to the accident, the insurance company requested a so-called informative statement under section 10 of the Danish Liability for Damages Act from the National Board of Industrial Injuries.

At first, the Board assessed the loss of capacity for work at 15 % stating that there was uncertainty about the woman's future capacity for work. Based on the facts at that time, it had not been rendered probable or proved that the woman was subject to a permanent loss of earnings of more than 15 %.

At the time when the loss of capacity for work was fixed, the insurance company's obligation to pay compensation for loss of earnings ceased.

Two years later, the Board fixed the woman's loss of capacity for work at 65 %.  The reason for this increase was, among other things, that it had not been possible to assess the woman's capacity for work when first fixing the loss of capacity for work, as she had not completed a work test assessment due to the fact that she was on maternity leave.

The woman brought legal action against the insurance company as she believed that she was entitled to compensation for loss of earnings until the date of the Board's second assessment as it was not until this date that a reasonable basis existed for estimating her future capacity for work.

THE SUPREME COURT: NO BASIS FOR SETTING ASIDE THE BOARD'S FIRST ASSESSMENT

First of all, the Supreme Court stated that an injured person is entitled to compensation for loss of earnings until the time when it is possible temporarily or finally to assess the injured person’s future capacity for work.

The decisive question for the Supreme Court was therefore whether the National Board of Industrial Injuries, when fixing the loss of capacity for work at 15 %, had assessed the woman's permanent loss of capacity for work on a reasonable basis.

The Supreme Court found no reasons to set aside the Board's assessment, which was based on medical and municipal information on the woman's health at the time of the Board's first statement on the loss of capacity for work. It was not important that the Board subsequently stated that the loss of capacity for work should have been fixed at 25 % instead of 15 %.

The Supreme Curt therefore reached the same result as the District Court and the High Court and ruled in favour of the insurance company.

Comments

The Supreme Court ruling shows that, even if the National Board of Industrial Injuries subsequently changes the loss of capacity for work significantly because of new information, this does not imply that the previous assessment will be considered subject to errors to such an extent that the assessment must be set aside.

An assessment from the Board may therefore be made on a reasonable basis even though it is changed significantly later on. The important aspect is whether the information available at the time of the fixing of the loss of capacity for work constituted a reasonable basis.

contacts

Finn Schwarz

Managing Partner

Maria Schmiegelow

Attorney