Good morning peeps and welcome to the forum.

This is a fairly complex area that has appeared on the forum before.

I recollect our experts explaining that payments made which are needed to cover ongoing expenditure connected to the incident can usually be kept by the claimant. This might apply to someone injured in a car accident that subsequently has an ongoing care or medical requirement for example.

I suspect that in many other instances some or all of the payment that might be received would be treated as a windfall which would need to be paid into the Trust Deed.

Hopefully one of our experts can bring some clarity to this for you soon...

Hi peeps

The guidance is:

Where a debtor's estate includes a right to sue for patrimonial loss, it is open to the permanent trustee to initiate the necessary action or to sist himself into the process if an action has been / is commenced by the debtor. Where the claim is for solatium, the trustee cannot initiate the action but can sist himself into a process initiated by the debtor.

The Accountant's view has, however, always been that a trustee should not involve himself in speculative proceedings and should be very reluctant to sist himself into damages actions commenced by the debtor lest he find himself personally liable for the costs of the action. It was thought to be unnecessary to do so since, in any event, if the action was successful, the proceeds would vest in the trustee as acquirenda per section 32(6) of the Act.

A decision of the Sheriff Principal of Grampian Highlands held that an award of damages to the debtor would not vest in the permanent trustee unless the date of settlement fell on a relevant day, as defined by section 32(10), unless the trustee had sisted himself to the action. That decision appeared to leave trustees only the uncertain course of seeking a deferment of the debtor's discharge in order to embrace the date of settlement.

Fortunately the Sheriff Principal's decision was overturned on appeal to the Inner House of the Court of Session and the effect of that judgement is that the very raising of an action by the debtor transforms the nature of his claim such that the right to the proceeds of the action automatically vest in the trustee as at the date of tabling of the action.

To summarise, solatium is emotional injury! patrimonial loss is loss of income through physical injury. Therefore, it is likely to come under the control of the trustee.

Mark

Hi Mark,

Thanks for the information. I'm trying hard to get my head around it!!

In laymens terms could you give examples of when the proceeds of an injury claim would need to be paid into a Trust Deed, and when they might be retained by the person injured?

Hi TDA

As usual, there are no specifics and will be at the discretion mostly of the Trustee.

I have always followed a (general rule) if there is a claim for compensation then generally this will fall to the Trustee. If you were in an accisent and off work for 10 weeks unpaid then it would be harsh for the Trustee to look at the 10 weeks wages as he/she previously agreed a contribution from these earnings.

If the injuries were so severe that the claim was to compensate to allow for a future reasonable standard of living ie inhouse carer etc, then I suspect these would not vest in the Trustee.

Not sure if thats any clearer!

Mark

Hi

Sorry to add a couple of questions for Mark McFadyen here but this is the most relevant forum.

On relevant date, is that any date up to and including when the last trust deed payment is made? Or is it any date up to and including the date when all trust deed administration/paperwork is completed?

If an accident compensation payment was made by cheque could you hold the cheque for 11 months until the relevant date was passed? How would the Trustee know that the payment cheque had been created, that the payment had been made? Does the insurance company making the payment have a legal obligation to inform the trustee?

Thanks

Mohmed

Hi mohmed

Relevant date means the period from the date of appointment (Trust Deed signing date) to the date of discharge.

Normally companies will do credit checks etc before issuing the cheque as they can be held liable for any loss suffered by the estate and this will normally show the Trust Deed.

Hope this helps

Mark

This is an interesting question, peeps. The bottom line is that your trustee could seek any sum which you are successfully awarded, though can exercise discretion and may well allow you to keep some of the funds to cover the higher expenses etc that you have incurred.

However you could consider leaving the claim until after your are discharged from your trust deed if you are able, in which case the funds would be yours to keep.

You would have to tell your trustee about the possibility of making a claim, as they may have the right to raise the claim in your place should they wish to do so, but if they choose not to then you would be clear to do so yourself once discharged from your trust deed.

The only issue would be whether you would still be in time to make the claim. I would advise speaking to a solicitor to check the limitation period, ie how long you have after the accident to make a valid claim, and whether the time delay would be likely to have a negative impact on your claim in any way.