Introduction

• successful claimant (C) in Negligence personal injury likely to be awarded damages
• various categories of damages: special damages calculated precisely (actual loss) & general damages require court's assessment
• two types of damages: pecuniary & non-pecuniary, with further heads of damage under each
• principle of compensation: restore C to position would have been in if defendant's (D) negligence not occurred

Pecuniary expenses

• pecuniary expenses: losses capable of being calculated in money terms & relating to pre-trial & post-trial

Pre-trial loss of earnings

• special damages: precise figure pre-trial loss of earnings, overtime or regularly received other benefits included

  British Transport Commission v Gourley [1956] AC 185

  • pre-trial loss of earning is net earnings (after tax and national insurance deductions)

  Dews v National Coal Board [1987] 2 All ER 545

  • pension deductions, normally made at source, also deducted from gross earnings

Post-trial loss of earnings

• general damages: unable to be precisely calculated, if unable to work again or if earning potential reduced
• awarded in lump sum at trial, using formula developed by courts

Multiplicand

• multiplicand: court's assessment of C's net annual loss
• gross annual loss up to trial, modified by any potential increase (if promotion was likely) & deduct tax, national insurance & pension contributions, to give net annual loss

Multiplier

• multiplier: period of future loss
• if C unable to work after accident, number will be based on pre-accident working life expectancy (retirement age)
• multiplier produced by taking this figure & converting using 2.5% figure in Ogden tables (actuarial tables based on risk factors)
• conversion: try to avoid C being overcompensated (as lump sum can be invested)

Calculation

• multiplicand X multiplier = future loss of earnings

Lost years

• if C's life expectancy shortened by accident, future loss of earnings are adjusted

  Pickett v British Rail Engineering Ltd [1980] AC 136

  Facts:

  • plaintiff (P), 51 year old, inhaled asbestos causing mesothelioma
  • evidence at trial gave P's life expectancy as 1 yr

  Issue:

  • how should future loss of earnings be calculated?

  Held:

  • Court of Appeal: future loss of earnings should be assessed on basis of 1 yr (multiplier) House of Lords: unjust outcome as prior to inhalation of asbestos P would have been expected to work until 65 yrs old (further 14 yrs)
  • Lord Wilberforce: .. Future earnings are of value to [the plaintiff] in order that he may satisfy legitimate desires... the amount to be recovered in respect of earnings in the 'lost' years should be after deduction of an estimated sum to represent the victim's probable living expenses during those years...
• if C's life expectancy shortened by negligence, loss of earnings can be recovered for lost years
subject to deduction representing an amount that C would have spent on himself: 25% (if married with dependent children) or 33%(no dependants), % may be altered on facts

Calculation

• two- stage calculation:
  multiplicand X multiplier (proportion for years claimant will survive)
  +
  multiplicand (reduced by amount claimant would have spent on himself) X multiplier (remaining proportion: lost years)
  = future loss of earnings

Other considerations in loss of earnings calculations

• in addition to tax, national insurance & pension contributions, further deductions from loss of earnings claim: sums paid to C by employer under legal obligation (statutory sick pay). tax rebates or tax holidays received due to C not receiving full salary, redundancy payments received by C, deductions for daily living expenses saved during hospital stays (under Administration of Justice Act 1982 S5)
• sums C may have received which do not need to be deducted: ex-gratia payments made by his employer (if employer not tortfeasor), state retirement pension or insurance monies received

Loss of earnings of children

• courts have taken approach of looking at C's family circumstances to determine future loss of earnings

  Connolly v Camden & Islington Area Health Authority [1981] 3 All ER 250

  Facts:

  • P was injured at 5 yrs old & would never be able to earn a living

  Issue:

  • how should loss of earnings be calculated?

  Held:

  • court used parent's earnings as an indicator of P's earning capacity

  Cassel v Riverside Health Authority [1992] PIQR Q168

  Facts:

  • P, an 8 yr old, injured at birth & not able to work in his lifetime

  Issue:

  • how should loss of earnings be calculated?

  Held:

  • Court of Appeal: used multiplicand over double national average wage, based on P's family history (high academic achievers & successful professionals)
  • Rose LJ: .. [the plaintiff is likely to possess] legal, artistic and entrepreneurial genes...
• using family circumstances can be seen as unfair, courts have developed an alternative method

  Croke v Wiseman [1982] 1 WLR 71

  • court used the national average wage to calculate child's loss of future earnings

Medical expenses

• C may claim for any medical expenses (including cost of adaptations or aids & travel expenses)
• pre-trial: available to court & easily totalled, awarded as special damages
• post-trial calculation: annual cost of treatment (multiplicand) X number of years treatment will be required (multiplier), awarded as general damages
• C may opt for private healthcare

  Poh Choo v Camden & Islington Area Health Authority [1979] 2 All ER 910

  • under Law Reform (Personal Injuries) Act 1948 P has right to choose private healthcare & claim cost in damages, even when NHS provides equivalent treatment

  Law Reform (Personal Injuries) Act 1948

  • S2(4): In an action for damages for personal injuries... there shall be disregarded, in determining the reasonableness of any expenses, the possibility of avoiding those expenses or part of them by taking advantage of facilities available under the National Health Service Act 1977...

Third party losses

• if C incapacitated may need carer or help with housekeeping, provided by third party
• C can recover value of services provided by third party

  Schneider v Eisovitch [1960] 2 QB 431

  Facts:

  • P hospitalised after an accident in France & two family members travelled assist her

  Issue:

  • could the family member's expenses be recovered?

  Held:

  • expenses could be recovered: expenses were reasonably necessary as a result of the accident & were also for reasonable amounts
• if the services are provided by defendant (D) then the cost cannot be recovered

  Hunt v Severs [1994] 2 All ER 385

  Facts:

  • P was cared for by her husband (D)

  Issue:

  • could P claim for the value of the voluntary services?

  Held:

  • House of Lords: awards made for voluntary care were for the purpose of compensating voluntary carer
  • contrary to public policy to allow P to recover money for services rendered by D
• Hunt v Severs [1994] criticised as no obligation on P to pay the money to third party, unless contract
• third party would have no cause of action against D themselves
• court will determine an appropriate amount payable for third parties, whether a professional carer or relative

  Donnelly v Joyce [1973] 3 All ER 475

  Facts:

  • P, was 6 yrs old at time he sustained injuries & required care from his mother & aids

  Issue:

  • how should P's loss be valued?

  Held:

  • P's loss is the need for the items & should be valued at proper & reasonable cost of supplying those needs
  • Megaw LJ: .. [the plaintiff's] loss is the existence of the need for... those nursing services... [the plaintiff] is entitled to recover damages in respect of the fair and reasonable cost of the special attention, necessitated by the defendant's wrongdoing...

  Housecroft v Burnett [1986] 1 All ER 332

  Facts:

  • P suffered severe injuries & her mother gave up her paid employment to provide substantial care

  Issue:

  • how should damages for the care provided be calculated?

  Held:

  • two extremes for valuing services of third party: awarding full commercial cost for supplying the services or awarding nothing
  • value of services of third party who gives up paid employment to attend to P is loss of earnings to maximum of value of commercial rate for providing the services

Loss of earning capacity

• Cs who are able to continue working but have continuing disability may have difficulties in seeking new employment

  Smith v Manchester Corporation (1974) 17 KIR 1

  • if court is satisfied C at risk of losing their job, may award damages for loss of earning capacity
• head of damage cannot be awarded if loss of future earnings is awarded
• if C not working at time of trial or already in lower paid employment he will be compensated under loss of earnings

Other pecuniary expenses

• any reasonable loss suffered due to D's wrongdoing may be compensated: including items damaged at time of accident

Non-pecuniary expenses

• non-pecuniary losses cannot be mathematically calculated in money terms
• personal injury claims not possible to restore C to position prior to incident, so can claim non-pecuniary losses to compensate

Pain and suffering

• pain & suffering covers past, present & future: pain & physical& mental anguish, including fear of future treatment or anguish caused by life expectancy being shortened

  Wise v Kaye [1962] 1 QB 639

  Facts:

  • P permanently unconscious & unaware of her surroundings

  Issue:

  • could damages be awarded for pain & suffering?

  Held:

  • P only claim for pain & suffering if they are aware of their injuries (subjective test), no claim for period P unconscious

Loss of amenity

• loss of amenity: broad head of damage to compensate C for loss of enjoyment of life, including loss of senses, reduced marriage prospects & inability to pursue hobbies
• amount calculated on degree of deprivation: court will consider C's lifestyle prior to incident & larger award likely if previously very active

  West v Shephard [1964] AC 326

  • objective test for loss of amenity, may recover even if P unconscious

Quantification

• no quantum for assessing non-pecuniary damages & therefore, award based on facts & relevant case law

Interest on damages

• courts always exercised discretionary power to award interest on damages & now some statutory guidance

  Senior Courts Act 1981

  35A Power of High Court to award interest on debts and damages

  • 35A(1): interest may be paid on damages
  • 35A(2): interest will be paid on damages for personal injuries or death which exceed £200 (b) 'unless the court is satisfied that there are special reasons to the contrary'
• case law provides principles for determining rates of interest for different heads of damage

  Jefford v Gee [1970] 2 QB 130

  Facts:

  • P suffered several minor injuries & badly broken leg, which required numerous operations & he did not regain proper use of his leg

  Issue:

  • how should interest be calculated?

  Held:

  • court explained principle underlying interest payments & set out guidelines for interest awards
  • .. Interest should not be awarded as compensation for the damage done. It should only be awarded to a plaintiff for being kept out of money which ought to have been paid to him...
  • .. special damages should be dealt with on broad lines... In all ordinary cases we should have thought it would be fair to award interest on the total sum of special damages from the date of the accident until the date of trial at half the rate allowed on the other damages...
  • .. [for non pecuniary losses] he should be awarded interest on the compensation payable. But such interest should not run from the date of the accident: for the simple reason that these misfortunes do not occur at that moment, but are spread indefinitely into the future: and they cannot possibly be quantified at that moment, but must of necessity be quantified later.... interest on this item (pain and suffering and loss of amenities) should run from the date of service of the writ to the date of trial. This should stimulate the plaintiff's advisers to issue and serve the writ without delay - which is much to be desired. Delay only too often amounts to a denial of justice...

  Cookson v Knowles [1979] AC 556

  • special damages interest: half the investment rate for money paid into court, from date of accident to date of trial

  Wright v British Railways Board [1983] 2 AC 773

  • interest on non-pecuniary loss: 2%
• therefore, pain & suffering & loss of amenity: from date of service of proceedings to date of trial at 2%

Provisional damages

• personal injury damages usually awarded in lump sum at trial for C's past, present & future losses
• may result in C being under or over compensated, so courts may award provisional damages in some cases

  Senior Courts Act 1981

  • as amended by S6(1) Administration of Justice Act 1982
  • S32A(1): an order for provisional damages may be made if chance C's condition may seriously deteriorate or serious disease may develop as result of the original tort
  • S32A(2): provisional damages may be awarded if: (a) if the judge awards the damages at trial as if the disease or deterioration will not occur and (b) C returns to court for further award of damages because the specified deterioration or disease occurs

  Hurditch v Sheffield Health Authority [1989] 2 All ER 869

  • time limit may be set within which C must return for further award of damages, if specified deterioration occurs

  Willson v Ministry of Defence [1991] 1 All ER 638

  • provisional damages only awarded if there is a clear & severable risk, continuing deterioration is insufficient

  Johnston v NEI; Grieves v FT Everard [2007] UKHL 39

  Facts:

  • Cs exposed to asbestos due to Ds' negligence & developed pleural plaques
  • pleural plaques have no symptoms & do not cause other asbestos related diseases
  • but may indicate presence of fibres in the lungs, which independently cause life threatening diseases
  • Cs suffered severe anxiety & depression

  Issue:

  • could provisional damages be awarded?

  Held:

  • House of Lords: provisional damages could not be awarded where C failed to establish a cause of action
  • Lord Hoffman: .. Proof of damage is an essential element in a claim in negligence and in my opinion the symptomless plaques are not compensatable damage. Neither do the risk of future illness or anxiety about the possibility of that risk materialising amount to damage for the purpose of creating a cause of action, although the law allows both to be taken into account in computing the loss suffered by someone who has actually suffered some compensatable physical injury and therefore has a cause of action. In the absence of such compensatable injury, however, there is no cause of action under which damages may be claimed and therefore no computation of loss in which the risk and anxiety may be taken into account...

Periodical payments

• periodical payments provide more flexible way of paying damages (payments made at regular fixed intervals based on C's current circumstances
• avoids difficulties of C investing lump sum badly & makes court's assessment easier as future costs do not need to be predicted
• however, periodical payments carry huge administrative costs & leave Ds & insurers uncertain about their liability