Confirmation of Jurisprudence on inexcusable fault, Social Security Financing Bill 2024

An article published in the news at the beginning of the year explained the personal injury compensation process for accidents at work.

In particular, in the event of inexcusable fault on the part of the employer.

This is how the reversal of jurisprudence by the Assemblée plénière of the Cour de cassation (French Supreme Court) in two rulings on January 20, 2023, considering that the annuity paid to the victim following recognition of the employer’s inexcusable fault does not compensate for permanent functional impairment (Cass. Ass.Pl. January 20, 2023, N°21-23.947 and N°20-23.673).

With these rulings, victims are now entitled to receive, in addition to their pension, a separate indemnity to compensate for permanent functional impairment, otherwise known as physical and psychological damage.

In a decision dated July 6, 2023 (21.24-283), the Second Civil Chamber confirmed its case law and transposed it to disability pensions, ruling that the pension paid to a victim does not compensate for permanent functional impairment. The pension is therefore no longer deducted from this item, but only from the loss, future earnings and occupational impact items.

In a ruling dated November 30, 2023, the Second Civil Division of the French Supreme Court (Cour de cassation, 21-24.757) confirmed its position regarding the employer’s inexcusable fault.

The Court also refers to the reversal decision of the Plenary Assembly of January 23, 2023.

« 5. In accordance with Article L. 452-3 of the French Social Security Code, independently of the increase in the annuity or lump-sum payment received under Article L. 452-2 of the same Code, in the event of recognition of the employer’s inexcusable fault, the victim has the right to claim from the latter, before the social security court, compensation for the damage caused by the physical and mental suffering he has endured, for his aesthetic and amenity damage, as well as that of the loss resulting from the loss or reduction of opportunities for professional advancement.

6. It has now been ruled that the annuity or lump-sum compensation paid to the victim of an accident at work or occupational disease does not compensate for permanent functional impairment (Ass. plén., January 20, 2023, pourvois n° 20-23.673 and 21-23.947, published).

7. As a result, the victim of an inexcusable fault can claim compensation for the physical and mental suffering he or she has endured, which the annuity or lump-sum payment is not intended to compensate.
8. The decision found that the claimant had suffered mental anguish linked to the constant fear of a serious progression of his illness and the worry of leaving his son, who was an adult under guardianship, alone, the amount of which was assessed by the court.

9. On these purely legal grounds, partially substituted for those criticized, under the conditions provided for in Articles 620, paragraph 1, and 1015 of the Code of Civil Procedure, the contested decision is legally justified.”

In essence, this ruling is a reminder of the principle of compensation for suffering.

The employer complained that the Appeal Court had awarded compensation for the suffering endured by the victim, even though it considered that this suffering had already been compensated under the heading of permanent functional deficit, itself compensated by the award of an increased annuity.

On the one hand, the Cour de cassation recalls that the victim is entitled, in the event of the employer’s inexcusable fault, to claim compensation for the physical and mental suffering endured, which is never compensated by the permanent functional deficit.

Above all, however, it reaffirmed its reversal of case law, stating that annuities (like disability pensions) no longer compensate for permanent functional impairment.

As a reminder, this has two consequences:

• The permanent functional deficit or AIPP must now be evaluated by a medical expert, following a claim for compensation for an accident at work, even though until now the rate of sequelae was evaluated by the social security doctor,

Thus, the rate set may be questioned by the appointed medical expert. It should be noted, however, that the last consolidation date set by the social security authorities should be retained.

• But this also implies that the In the future, the social security authorities will no longer be able to exercise their right to claim compensation for physical and mental injury.This is because the benefits paid by the social security system are now considered not to compensate for this type of loss.

The compensation of the victim of a work accident is therefore considerably extended.

However, in view of this far-reaching reversal in case law, a bill is currently being studied which could thwart this development in jurisprudence, which is favorable to victims.

The Social Security Financing Bill for 2024 proposes to change the way in which work-related accident benefits are calculated.

As of January 1, 2025, this would be made up of a professional portion and a functional portion, calculated separately.

Article 39 of the Social Security Financing Bill for 2024 provides for changes to the method of calculating annuities paid in the event of an accident at work or occupational disease (AT/MP annuity) when the victim’s permanent disability rate is equal to or greater than a certain threshold (currently 10%).

From now on, this pension will have two components: professional and functional.

The professional portion would compensate for loss of professional earnings and professional impact.

The functional portion would compensate for the permanent functional deficit.

In Article L. 424-2 of the French Social Security Code (amended accordingly), the law would introduce a table of concordance between this benefit and the items of loss it compensates.

This would make it possible to set the basis for the social security body’s recourse when it claims reimbursement from the liable party or insurer.

Until now, in the absence of an official concordance table, it was left to the discretion of the Courts to determine the basis of recourse.

This led to a reversal in the Court’s jurisprudence, ruling that the permanent functional deficit is not compensated by the annuity.

In order to justify this bill, it was stated that “the measure draws the consequences of recent Court of Cassation jurisprudence by redefining the dual nature of the annuity and the evolution of its calculation”.

It seems, however, that the basis of recourse for social security bodies has been reduced by this case law, and it was hoped to quickly remedy the situation.

This project will be examined in greater detail should it be adopted, although it is already clear that the provisions could come into force on a date to be set by decree, but no later than December 31, 2024. The new measures would therefore apply to victims whose condition is consolidated or whose death occurs on or after this date.

To be continued….