Reopening of a compensation case. New judgement from the Supreme Court HR-2019-1153-A

The clear starting point in Norwegian law is that agreements must be honoured. This also applies to agreements on the final settlement of damages that the injured party enters into with the responsible insurance company in accordance with the Damages Act. In some cases, however, a situation arises where subsequent circumstances show that the assumptions the parties agreed on when the agreement was entered into turn out to be incorrect. This raises the question of reopening the claim and revising the settlement agreement.

Section 3-8 of the Damages Act gives the injured party the right to bring a new case after a finalised settlement for compensation for pain and suffering or compensation for future loss of income or expenses if a deterioration in the injured party's health changes the basis for the settlement. Alternatively, the injured party may demand a revision of the settlement agreement in accordance with section 36 of the Contracts Act if it would seem unreasonable to enforce the agreement. The Supreme Court clarified the conditions for revision under Section 36 of the Contracts Act in Rt-2013-769. On 18 June 2019, the Supreme Court handed down a new judgment in HR-2019-1153-A, in which the conditions for resumption were further specified.

In Rt-2013-769, the Supreme Court ruled that section 3-8 of the Damages Act does not restrict the scope of application of section 36 of the Contracts Act. The injured party therefore has two alternative legal bases for claiming subsequent settlement of an agreement on final settlement of damages. This was an important clarification, as section 3-8 of the Damages Act only provides a basis for revision of the agreement if the injured party's health has deteriorated. If the injured party's health has not deteriorated, but the occupational disability has nevertheless increased in the years following the settlement, the injured party cannot claim a supplementary settlement under Section 3-8 of the Damages Act.

The Supreme Court ruled in Rt-2013-769 that the following conditions provide good guidance for when section 36 of the Contracts Act should lead to a settlement agreement for personal injury being set aside due to subsequent circumstances:

1. The injury must have changed significantly to the disadvantage of the injured party since the agreement was entered into, either in terms of medical or occupational disability.
2. The change must be outside what both parties expected when the agreement was entered into.
3. In retrospect, the agreement entered into must appear unreasonable and unbalanced in relation to a proper settlement.

In the specific case before the Supreme Court in HR-2019-1153-A, the Supreme Court concluded that the condition that the change must be outside what both parties expected when the agreement was entered into was not met. In paragraph 55, the first judge concluded that «At least one of the three cumulative conditions set out in Rt-2013-769 is therefore not met.»

However, the Supreme Court emphasised that, in exceptional cases, there may be room for contract revision even if not all three conditions are met. However, the threshold for setting aside an agreement after an overall assessment must be extra high in these circumstances.

Although the Supreme Court already stated in Rt-2013-769 that the assessment of contract revision under Section 36 of the Contracts Act and the three conditions must be made on the basis of an overall assessment of all relevant circumstances, the Supreme Court made an important clarification in HR-2019-1153-A. However, the threshold for setting aside the settlement agreement if one of the three conditions is not met is high. In the specific case before the Supreme Court, the court was of the opinion that the circumstances of the case, after an overall assessment, did not exceed this threshold.

The case was argued by lawyer Nora Lund Lefdal on behalf of If Skadeforsikring NUF, and the injured party's counsel was lawyer Einar I. Lohne. Lohne.