Remedies in Tort PDF

5 Remedies in Tort LEARNING OUTCOMES When you have completed this chapter, you should be able to: understand the purpose of an award of damages in tort; in the context of damages for personal injury, distinguish between pecuniary and non-​...

5 Remedies in Tort LEARNING OUTCOMES When you have completed this chapter, you should be able to: understand the purpose of an award of damages in tort; in the context of damages for personal injury, distinguish between pecuniary and non-​ pecuniary elements in awards; explain and critically evaluate the principles by which damages are assessed; explain the damages awards which are relevant when the victim has died. 5.1 Introduction to remedies in tort 5.1.1 Harm suffered and the appropriate remedy So far, we have looked in detail at how a claimant may establish liability in the tort of negligence. This chapter considers the question of what the claimant wants to recover from the defendant if they are successful in their claim, ie the remedies that they want. A lawyer in practice needs to be able to analyse the law and determine whether evidence is available to prove each element of the claim. However, the main concern of the lawyer’s client is likely to be the remedy they hope to obtain. In the examples of negligence which have been considered in the book, the kinds of harm the claimants suffered included: damage to property, eg a car damaged in a motor accident; personal injury, eg a broken leg caused in a tripping accident. This can be broken down further. For example, a solicitor is acting for a client involved in a road accident who has suffered damage to their car and a broken leg caused by the negligence of the defendant. In order for the client to be fully compensated for the effects of the accident, the items that would need to be claimed for would include: damage to property –​the car damage: ∘ cost of repairs or replacement; ∘ cost of lost use, eg hire of an alternative car; personal injury –​the broken leg: ∘ compensation for pain and suffering; ∘ compensation for activities the claimant can no longer do, eg play football; 115 Tort ∘ medical expenses, eg prescription charges, etc; ∘ lost wages while unable to work. This is not an exhaustive list, but it provides some examples of the kinds of loss which a claimant might suffer. This chapter considers the remedy of damages. In the example above, the claimant suffers an injury (and property damage) but is still alive. It is also necessary to consider the damages which can be awarded where a person dies before they have been compensated for a tort committed against them. In Chapters 6, 7 and 8, we shall look at some special liability regimes: employers’ liability, occupiers’ liability and liability for defective products. They are referred to as ‘special’ regimes because each of them has some particular rules for establishing liability. However, in relation to remedies they are the same as general negligence. Torts in each of these areas could cause the kinds of harm we have looked at above, and the rules on damages are the same. In Chapter 10 we shall consider torts which deal with interference with land: trespass to land and nuisance. These torts cover kinds of harm which are different from those we have looked at so far. For example, a claim in nuisance is appropriate where a claimant suffers interference with the use and enjoyment of their land, eg unpleasant smells caused by chemical fumes from the defendant’s factory. It might be appropriate for the claimant to seek damages to compensate for the interference. However, damages would not always be enough. The claimant in the above situation would probably also want to stop the defendant from carrying on with the harmful activity. To achieve this they would need to ask the court to grant the remedy of an injunction. The remedy of an injunction is considered in Chapter 10. This chapter concentrates on the remedy of damages. 5.1.2 Compensatory damages and nominal damages Our discussion above looked at damages which are designed to compensate a claimant for losses which they have suffered. Before we examine these in more detail, there is one other kind of damages award that we should consider. That is an award of nominal damages. Where a tort is actionable per se (for example, the tort of trespass to the person and the tort of trespass to land), the claimant does not need to prove any actual damage or loss in order to establish a claim. For example, a store detective wrongfully takes hold of a customer by the arm, but causes no actual hurt or damage. In this kind of situation an award of compensatory damages is not appropriate because the claimant has not suffered any actual damage. However, the claimant’s rights have been infringed (in this example, their right to bodily integrity). The wrong to the claimant may be recognised by an award of nominal damages. That is, an award for a token amount of money. Why would it be worthwhile for a claimant to pursue proceedings only to recover nominal damages? A further example will help to explain this. Suppose your next-​door neighbour regularly takes a short-​cut by walking over your lawn to reach the road. Their footsteps do not damage your lawn, but you still want to establish that they have no right to use your land in this way. If you brought proceedings against your neighbour, an award of nominal damages would recognise that by taking the short-​cut they are trespassing. In this example your concern was not to receive compensation for losses suffered but to establish your legal rights. It is important to note that a claimant who recovers nominal damages in this way will usually be awarded the costs of bringing the claim. This recognises that the claim was properly brought in order to vindicate the claimant’s rights. This should mean that the claimant will not be substantially out of pocket as a result of bringing the claim (provided, of course, that the defendant has the means to pay those costs). 116  Remedies in Tort The remainder of this chapter will concentrate on compensatory damages: for personal injury; on death. We begin by looking at the general principles which apply to all awards of compensatory damages. 5.2 Compensatory damages –​general principles 5.2.1 The measure of damages The aim of damages in tort is to put the claimant in the same position they would have been in if the tort had not been committed. For example, if the defendant’s negligence caused damage to the claimant’s bicycle, the defendant would have to compensate the claimant for that loss either by paying for repairs to the bicycle, or by replacing the bicycle. So, in tort the clock is turned back. In some situations it is relatively easy to comply with this principle. Many of a claimant’s losses will be easy to quantify in monetary terms, and by paying the claimant money the defendant will be able to restore the claimant to the position they were in before the wrong was committed. For example, with money, the claimant can repair a car, replace a bicycle, have earnings restored. However, with personal injuries, the payment of damages would not restore the claimant to their previous position. For example, money cannot mend a broken arm or prevent someone suffering post-​traumatic stress disorder. Here the damages received are seen as compensation for the injury. 5.2.2 Mitigation of loss The guiding principle in assessing damages is that claimants should be put back in the position they were in prior to the wrongdoing having been committed. This means that the claimant should be no worse off because of the occurrence –​but also no better off. That is, the claimant should not profit from the incident. This principle also means that claimants cannot claim damages for losses which they could have avoided by taking reasonable steps themselves. This is the duty to mitigate. It means that a claimant must take all reasonable steps to keep the losses they are claiming to a minimum. In practical terms this means that, for example, the claimant who loses their job because of the defendant’s wrongdoing, but who is still capable of working, should look for alternative employment. A claimant who needs a vehicle to earn a living and has had their vehicle destroyed by the defendant’s tort should replace the vehicle, either by purchasing an alternative or by hiring one. The principle even extends to seeking medical care. A claimant who unreasonably refused medical treatment would not recover damages for harm which the treatment would have avoided. 5.2.3 The one action rule A claimant can bring only one claim based on one set of facts. This means that when a court assesses the claimant’s damages, it must award a single lump sum to cover both losses already suffered up to the time of trial and losses which the claimant is expected to suffer in the future. Future losses could encompass, for example, continuing pain and suffering and loss of earnings. A judge has to make an assessment of the claimant’s future losses. Once an award of damages has been made, a claimant cannot go back to court with a second claim simply 117 Tort because the injury worsens rather than improves. This can cause difficulties for the claimant, the defendant, and even the judge. For example, it is not always possible to predict accurately how far someone might recover, or what that person might have achieved in life if the accident had not occurred. A limited exception to this rule in the case of provisional damages and periodic payments is considered at 5.3.3 below. 5.2.4 General and special damages A distinction is drawn between special damages and general damages: Special damages –​those losses which are capable of being calculated precisely at the time of the trial and which are stated in the form of a calculation. This covers financial losses incurred before trial, such as loss of earnings. General damages –​those losses which are not capable of being calculated precisely and are therefore left to the court to determine. They must still be stated but no definitive figure can be placed on them. This includes pain, suffering and loss of amenity and all losses incurred after the trial. 5.3 Damages for personal injury The theory behind damages is considered above. The next matter to consider is the actual damages that a successful claimant in the tort of negligence, who has suffered personal injury, might hope to recover. In considering how the damages will be calculated, it is necessary to divide the losses into the two categories of damages which the courts use in awarding compensation: pecuniary and non-​pecuniary losses. The distinction between the two is: Pecuniary losses are those which are capable of mathematical calculation in money terms. These losses may have been suffered pre-​or post-​trial, but they can nevertheless be calculated in terms of money. An example of pecuniary losses would be the claimant’s loss of earnings and medical expenses. Non-​pecuniary losses are not capable of being calculated in money terms. The main example of non-​pecuniary losses is the claimant’s personal injury. 5.3.1 Non-​pecuniary losses The main example of non-​pecuniary losses is the claimant’s personal injury which is made up of the claimant’s pain and suffering and ‘loss of amenity’ caused by the injury. Example A solicitor acts for a client who has fallen off a ladder and suffered a broken leg caused by the negligence of the defendant. The information required from the client in order to be able to assess the damages which they should receive as compensation for pain and suffering and ‘loss of amenity’ includes: Full details of the injury suffered –​eg type of fracture? Medical treatment received –​eg was the claimant in hospital? For how long? 118  Remedies in Tort Pain and suffering –​eg how painful was the injury? How long did the effects last? Drugs and prescriptions –​eg did the claimant need pain-​killing drugs? How much relief did they give? Continuing effects –​eg does the claimant still suffer pain from the injury? Future effects –​eg will the claimant continue to suffer pain from the injury? How long is that expected to last? (Medical evidence would be required on this last point, and generally in order to support the client’s account of their pain and suffering.) Are there any activities which the claimant can no longer do, eg play football, or run over rough ground? What were the claimant’s previous interests which they can no longer enjoy, eg playing sports? Are there any other detrimental effects of the injury? For example, has the claimant been forced to change to a job which they enjoy less? The last set of questions above asked about the effects of the injury on the claimant’s enjoyment of life. This is what lawyers call ‘loss of amenity’. Damages for pain and suffering and loss of amenity are considered in more detail below. 5.3.1.1 Pain and suffering This head of damage covers the pain and suffering which the claimant has incurred as a result of the injury. It covers past, present and future pain, physical and mental anguish, the fear of future surgery, etc. It also covers the claimant’s anguish of knowing that their life expectancy had been shortened because of the accident (Administration of Justice Act 1982, s 1(1)(b)). The court needs to assess the claimant’s pain and suffering to reach a monetary figure for compensation. In general the court will just give one figure, which includes both pain and suffering and loss of amenity. How a figure is reached is dealt with after consideration of loss of amenity. However, there is one more point to note on damages for pain and suffering. The case of Wise v Kaye 1 QB 638 establishes a subjective test for awarding a sum for this head of damage. This means that the claimant must be aware of the injuries to be able to claim for pain and suffering. If a claimant was unconscious, they would not recover damages for pain and suffering for that period because they would not be aware of it and would fail the subjective test. (However, they would still be able to recover for loss of amenity, as discussed below.) 5.3.1.2 Loss of amenity This head of damage aims to compensate the claimant for the loss of the enjoyment of life, and it therefore covers a wide area of loss, eg loss of freedom of movement, loss of sight, loss of smell, loss of marriage prospects, inability to pursue hobbies, etc. It therefore follows that a claimant who was very active prior to the accident will receive more under this head of damage than a claimant who was inactive. Unlike pain and suffering, the test for this head of damage is an objective test (West v Shephard AC 326), and a claimant will be able to recover under this head whether conscious or not. 119 Tort 5.3.1.3 Quantification of non-​pecuniary damages There is no easy way to assess the value of, say, the loss of a leg. Such a loss would mean different things to different people, depending on age, sex, hobbies, etc. This means that to assess damages for non-​pecuniary loss, the courts have to consider the individual facts of each case. Example A solicitor acts for a client who has fallen off a ladder and suffered a broken leg caused by the negligence of the defendant. The client would like to seek to reach an agreed settlement of the claim if possible. The agreement would be based on the likely amount a court would award for the client’s injuries. In practice, lawyers will turn to the Judicial College Guidelines for the Assessment of General Damages in Personal Injury Cases and practitioner texts like Kemp on Damages, which contains thousands of cases in which damages have been awarded. The lawyer then finds those cases which are most like the one under consideration, to obtain a rough guide to the amount of damages the client may be able to recover for the non-​ pecuniary heads. Even the best, most experienced litigation lawyers are only able to estimate the amount of damages that a claimant might receive. Non-​pecuniary damages for pain and suffering and loss of amenity are, therefore, general damages, because they are not capable of being calculated precisely. 5.3.2 Pecuniary losses Pecuniary losses are those which are capable of mathematical calculation in money terms. These losses may have been suffered pre-​or post-​trial, but they can nevertheless be calculated in terms of money. Example A solicitor acts for a client who has fallen off a ladder and suffered a broken leg caused by the negligence of the defendant. The information required from the client in order to be able to assess the damages which they should receive as compensation for their pecuniary losses includes: Was the client absent from work as a result of the accident? Did they lose wages/​receive any sick pay? Are they still off work? How long do they expect to be off work? (The solicitor would need medical evidence in support of this.) Did they incur any medical expenses? For example, the cost of private treatment, prescription charges. Did they incur any other expenses? For example, extra travel costs, costs of nursing care, costs of special equipment. For how long will those medical and other expenses continue? (The solicitor would need medical evidence here too.) 120  Remedies in Tort These are all examples of pecuniary losses which the client might suffer. How these losses would be quantified is considered below. 5.3.2.1 Medical expenses The claimant is able to recover any medical expenses that have been incurred. If the expenses are incurred pre-​trial, they will be special damages and are calculated simply by adding together all of the expenses. If they are to be incurred post-​trial, they will be general damages. In this case, the court will base its assessment on the annual cost of treatment and the number of years the treatment is likely to continue. The claimant can claim for any reasonable medical expenses which result from the accident. Examples might include the cost of wheelchairs, adapting the house, special dietary needs, travelling to and from hospital to receive treatment. If the claimant has received medical treatment from the National Health Service, generally this will be free of charge. This means that the claimant has not incurred any treatment costs to recover from the defendant. (In some circumstances, the defendant may be required to make a payment towards the costs of NHS medical treatment. However, this does not form part of the claimant’s damages.) A claimant may choose to pay for private medical treatment. The effect of s 2(4) of the Law Reform (Personal Injuries) Act 1948 is that a claimant cannot be found to have failed to mitigate their loss by paying for private treatment rather than obtaining free treatment under the National Health Service. A claimant can recover the reasonable cost of private medical treatment. However, damages are to compensate the claimant for losses actually suffered. This means that although a claimant can recover private treatment costs which they have actually paid (or intend to pay for future treatment), a claimant who is treated by the NHS free of charge cannot recover what it would have cost them to have private treatment. 5.3.2.2 Loss of earnings pre-​trial Loss of earnings pre-​trial are relatively easy to calculate. The guiding principle is to put the claimant back in the position they would have been in if the accident had never happened. For any loss of earnings before the trial, this simply means calculating the net earnings for that period. As this is a loss suffered before trial, and it is capable of precise mathematical calculation, this element of the award would be special damages. It is necessary to ascertain net earnings, ie after deduction of tax and national insurance contributions, because claimants should receive as compensation the same sum of money they would have taken home with them if they had been able to work. Another deduction that would be made from the claimant’s gross earnings would be any pension contributions which are normally deducted at source from wages. As the payment should put the claimant back in the same position they would have been in if the accident had never occurred, if the claimant regularly earned overtime or bonuses, these should be included in the calculation. Also any perks of the job which the claimant received, eg a company car, reduced rate mortgage, share options, should be included in the calculation. 5.3.2.3 Loss of earnings post-​trial Loss of earnings post-​trial are much more difficult for the court to assess. Since they are after the trial, and are not capable of precise mathematical calculation, they are general damages. 121 Tort The difficulty for the court is that it must make the assessment at the date of trial. However, it is seeking to determine how much the claimant would have been capable of earning in the future, if the accident had not occurred. In some cases the claimant will never work again. In other cases the claimant is still working, but earning less than prior to the accident. It is also common for a claimant to need several months (or years) off work to recover, after which they will be able to work again. In each case the court has to assess, at the date of the trial, the future loss to the claimant. The court will award one lump sum to compensate for that future loss. The method by which the court could work out a claimant’s future loss of earnings is considered below. Example A client falls off a ladder and loses a leg due to the negligence of the defendant. The client is aged 35. They were employed as a window cleaner. They earned £25,000 per annum. Medical evidence suggests that they will be unable to return to work as a window cleaner. In order to be able to assess the damages which they should receive as compensation for their future loss of earnings, the questions to consider include: How long did the client have left in their working life? If they would have retired at 60, they would have 25 years left to work. Should their current earnings of £25,000 per year be used to estimate their loss over 25 years? Could they do some other kind of work which would give them some earnings? This is a simplified example, but it illustrates the issues which can now be considered in more detail. The court applies a formula to enable it to calculate the future loss of earnings of the claimant. Each of the elements of that formula is examined further below. Multiplicand The first step in the process of assessing future loss of earnings is for the court to ascertain the claimant’s gross annual loss as at the date of the trial. If the claimant would have had an increase in earnings due to, for example, promotion, and that increase was very likely to happen, the court can take that into account in assessing the amount of the claimant’s loss. (However, the salary cannot be increased for the effects of inflation. This is because a claimant can counteract the effects of inflation by investing the lump sum compensation they receive and earning interest.) From the gross salary the court will deduct tax, national insurance, and pension contributions deducted at source. The resulting figure, the net annual loss, is known as the ‘multiplicand’. Multiplier The court then needs to calculate for how long the claimant will lose this money –​the period of future loss. If the claimant is not expected to work again, this period will be based on the claimant’s pre-​accident working life expectancy, ie the length of time they would have to work until normal retirement age. This period of time is called the ‘multiplier’. 122  Remedies in Tort Clearly, if the claimant is expected to be able to return to work at some time in the future, a smaller multiplier will be used, which reflects the period for which they are likely to be off work. In the example above, the client could have worked for a further 25 years, and could have earned £25,000 per year. These figures could be used to calculate a total fi ­ gure as: 25 years (the multiplier) x £25,000 (the multiplicand) =​£625,000 It is an important principle that damages are to compensate the claimant for loss suffered. The claimant should not end up in a better position than they would have been in if the accident had not occurred. For example, a claimant would be over-​compensated, the defendant would argue, if they received their full loss of future earnings at the date of the trial. This is because they would be able to invest that whole lump sum and allow it to earn interest. By contrast, if the claimant received salary monthly, as they did when working, that option of investing and having a return of interest would not be available. On the other hand, the claimant should not be under-​compensated. This would be the case if the interest they receive on their damages does not protect them against the effects of inflation. The rate of interest that a claimant is expected to receive when investing their damages (known as the ‘discount rate’) is, therefore, a crucial consideration. The Lord Chancellor exercises powers under the Damages Act 1996 to set the discount rate. The current discount rate is minus 0.25%. The justification behind this figure is that claimants should be treated as risk averse investors. The discount rate mirrors the performance of low risk investments that do not protect against the effects of inflation. The concern is that claimants would be under-​compensated by assuming that they would invest in better performing, but riskier, investments. The court uses actuarial tables, called the Ogden tables, in order to find the correct multiplier. Litigation solicitors therefore use the Ogden tables to find the appropriate multiplier based on the client’s age and the rate of interest (the discount rate) it is assumed that the claimant could earn on their lump sum. Applying the current discount rate of minus 0.25% to the example above demonstrates how a claimant’s lump sum will be increased. This is because the multiplier is increased: Multiplier (25.2 years) x Multiplicand (£25,000) =​Award for future loss of earnings (£630,000) The principle remains that a claimant must not be over-​compensated. Therefore, the court needs to take into account what might have happened to the claimant in their future working life. One example could be the possibility that the claimant would be made redundant and so lose their income in any event. The courts refer to possibilities like this as the ‘contingencies of life’. It is important to note, therefore, that the court could reduce the basic multiplier figure (obtained from the client’s age and the discount rate as above). It would make this reduction in order to take account of future adverse ‘contingencies of life’. For example, would the window cleaner client have been at a particular risk in any event of losing their job and being out of work? The discussion above considers a relatively simple example of a loss of future earnings. In practice, there may be other matters to be taken into account. For example, it was considered above that the window cleaner client might be able to undertake some other, less profitable work. If that were the case, the calculations would need to take into account the money which they could earn. Also, the example deals with the situation where the claimant will never work again. However, often a claimant is expected to be able to return to work after a period of months or years. The same kind of method as above is used to calculate the claimant’s loss for that limited period. 123 Tort 5.3.2.4 Loss of earnings –​the lost years In the example above the client recovered damages on the basis that had it not been for the accident, they would have continued to work up to their normal retirement age. What would happen if the client’s injury had been so serious that it reduced their remaining life expectancy? Example A solicitor has a client aged 35. Prior to the accident the client was expecting to work to age 60. They had 25 years left to work. However, the medical evidence shows that now, as a result of their injury, they are likely to live and work for only another five years. The client has lost 20 years’ earning capacity. These are the ‘lost years’. The issue to be considered is whether it matters to the client that they have lost those earnings? Does the client need those earnings if they are expected to die? Clearly, this loss of earnings does matter to the client, because they are likely to have dependants, who will rely on those earnings for support. If no award of damages is made for those earnings during the ‘lost years’, the claimant will be unable to provide for their dependants (or leave the money by will to someone else). The claimant is not, therefore, fully compensated. The case of Pickett v British Rail Engineering AC 136 established that claimants whose life expectancy had been shortened by the incident could recover loss of future earnings for lost years. How should the client’s damages for future loss of earnings be calculated in that case? If the method set out above is applied, there is a risk that they will be over-​compensated. If the claimant were working normally, they would spend part of their earnings on themselves (for food, clothing, etc). Only the balance of their earnings would be left over to support their family. So, when the loss of earnings figure is calculated for the period after the claimant is expected to die, it is necessary to deduct the amount which the claimant would have spent on themselves from the multiplicand. Only the balance of their earnings should be awarded as damages. That deduction from the multiplicand is generally set at 25% for a person married with dependent children, and at 33% for those with no dependants. These are average deductions though, and different figures can be argued if the evidence is that a particular claimant would have spent more or less on themselves. It is only relevant to make this deduction where the client’s life expectancy has been reduced so that they are expected to die during the period for which damages are calculated. 5.3.2.5 Loss of earnings –​children If a child is injured in an accident, and will never be able to work in the future, there is nothing which prevents the courts awarding a sum for future loss of earnings. However, it is difficult for the courts to assess the correct level of the child’s future earnings. If a child is very young at the date of the accident, it is virtually impossible to predict what that child’s earnings might have been. There are many ways in which a child’s future loss of earnings might be assessed. One way would be to consider what the child’s parents earn and assume the child would reach a similar level. Another approach would be to take the national average earnings and base the child’s earnings on those figures. If a child has shown any potential in a particular area of future employment, that could be considered in assessing future loss of earnings. 124  Remedies in Tort 5.3.2.6 Services provided to the claimant Example A solicitor is acting for a client who has been seriously injured. The client is about to be released from hospital to go home. The kind of help and services they might need includes: help with housework/​shopping/​gardening/​laundry etc; nursing care. The key question for the injured client will be: Can they recover the cost of these services as part of their damages award? The law does allow the claimant to recover the cost of services of this kind. This was established in the case of Schneider v Eisovitch 2 QB 430. (The claimant has to be able to show that the need for the services follows from the injury caused by the defendant’s negligence.) It is important to note that the need for services is part of the claimant’s damage. The third party, who provides the services, cannot claim the value of the services themselves from the defendant. The third party does not have a cause of action against the defendant. The defendant owed a duty of care to the claimant, not to the third party. The claimant is able to recover the cost of the services because the claimant is being compensated for their need for care –​which was caused by the defendant’s tort. Services might be provided by a professional carer. However, very often, this kind of help might be given freely by relatives who may have had to give up work. A claimant can recover damages for the services they need, and it does not matter who renders these services. It might be a relative, a friend, or a paid professional. However, the identity of the carer might make a difference to how much the claimant can recover for the cost of care. If a claimant has paid for professional nursing care, they can recover the cost of that care. They must show that the costs were reasonable. That is, that they are in accordance with the usual market rate for such services. Where the claimant’s spouse (or any other relative, etc) has given up paid employment to care for them, the claimant can recover the cost of that care. The way in which that cost should be assessed was decided in Housecroft v Burnett 1 All ER 332. The court held that the starting point was the loss of earnings suffered by the carer. However, the costs could not exceed the commercial rate for providing the services. 5.3.2.7 Loss of earning capacity Another head of pecuniary loss arises where a claimant is injured, and suffers some continuing disability, but is still able to work. The claimant faces the risk that if they lose their job in the near future, they will be disadvantaged on the job market because of their disability. They may find it very difficult to get employment. Alternatively, they may be able to get some employment but find that it is less well paid. An award of damages can be made to compensate the claimant for this disadvantage. However, it is very speculative. The judge must be satisfied that there is a real risk of the claimant losing their job. The judge must then try to put a money value on the chance of that happening. 125 Tort This award is also known as the Smith v Manchester Corporation award after the case in which this head of damage was established (Smith v Manchester Corporation (1974) 17 KIR 1). Note that this award is relevant where the claimant is currently still working in their original job. It will not be relevant if the claimant can no longer work at all, or if the claimant has already been forced to move to lower paid work. In these cases, the claimant will simply make a claim for their loss of future earnings in the normal way, as considered above. 5.3.2.8 Other pecuniary expenses Claimants can recover for any other pecuniary expenses they have incurred due to the incident. For example, the claimant’s property might be damaged in the accident. The claimant could recover such costs as, for example, clothing, jewellery, watches, spectacles, bags, shoes, etc. There is no definitive list of these items. Any reasonable loss incurred by the claimant as a result of the accident can be recovered. 5.3.2.9 Deductions from damages and exceptions The example of a client who loses a leg and is unable to work has been considered. It is also necessary to examine the following further issues: What extra financial support might such a person receive? For example: insurance payments, ill-​health pensions, charitable payments and State benefits. How should that support be taken into account when damages are calculated? The general principle that a claimant should not be better off as a result of the accident should be taken into account. This might suggest that such payments could be deducted from the claimant’s damages. When calculating past and future loss of earnings, the net annual loss figure is used (ie gross annual loss less tax and national insurance contributions). This is to ensure that the claimant is not over-​compensated. They should not be in a better position than they would have been if the accident had not happened. However, as an exception to this general principle, there are some payments which a claimant is allowed to keep in full, even though they are an extra benefit which the claimant has received only because of the accident. Thus, the following payments are not deducted from the damages which the claimant receives: insurance payments; ill-​health pensions; charitable payments. (This would include ex gratia payments made by the claimant’s employer, provided the employer is not the tortfeasor.) If these sums were deducted, it would discourage people from protecting themselves by insurance, or from making charitable payments, because the benefit would simply go to the defendant. In the list of possible sources of support above, it was also noted that a claimant might recover State benefits. If the claimant receives State benefits as a result of an accident, some account must be taken of the receipt of these benefits. On the one hand, if no account were taken and damages not reduced, the claimant would be over-​compensated. On the other hand, if State benefits reduced the damages which the defendant had to pay, the State would be bearing the costs of the defendant’s negligence. The solution is to deduct relevant benefits from the claimant’s damages, and then require the defendant to pay that amount back to the State. This is provided for by the Social Security (Recovery of Benefits) Act 1997. 126  Remedies in Tort Under the Act, State benefits can be deducted from only certain kinds of damage suffered by the claimant. The three heads of damage affected by the Act are: compensation for lost earnings; compensation for cost of care; compensation for loss of mobility. No benefits are deductible from the claim for pain and suffering and loss of amenity. This is a brief summary. A practitioner in this area would need to study the provisions of the Act (and associated regulations) in much greater detail. 5.3.3 Provisional damages and periodic payments Damages in personal injury claims are awarded in one lump sum at the date of trial, and this should cover past, present and future losses which the claimant might suffer. This may cause problems as the claimant might be under-​compensated. On the other hand, the defendant may be ordered to pay compensation at a level which protects the claimant if their condition deteriorates, although it might be the case that this never happens. The limited alternatives that exist to the lump sum award system are within two statutory provisions which create limited exceptions to the rule that damages should be awarded once and for all in a single lump sum: (1) Section 32A of the Senior Courts Act 1981 allows for an award of provisional damages. Example Mandeep has a 10% chance of loss of sight in one eye. On the basis that loss of sight in one eye would be worth £30,000, if the court awarded her 10% of this, Mandeep would receive £3,000. However, if Mandeep does lose the sight in her eye, she will be under-​compensated by £27,000. If Mandeep does not lose sight in her eye, she will have been over-​compensated by £3,000. So, in this situation, because there is a chance of serious deterioration, a provisional damages award would be appropriate. At the trial, the court will assess damages on the basis that Mandeep will not lose the sight in her eye. The judgment will specifically provide that, in the event that Mandeep does lose the sight in her eye in the future, she will be entitled to further damages. (2) In some circumstances, s 2 of the Damages Act 1996 allows the court to award damages for personal injury as periodic payments rather than as a lump sum. 5.4 Damages on death This section considers two separate issues: the position if a claimant dies before they have received an award of compensation; and the damages that can be recovered where the defendant’s negligence causes the claimant’s death. It is necessary to understand some of the terminology used when looking at claims following death: 127 Tort Estate –​all of the property belonging to the deceased person. This includes land and buildings, and personal possessions such as money, shares, jewellery, cars, etc. Will –​the document in which a person sets out their wishes as to the distribution of their estate on death. Intestate –​a person who has died without leaving a will. Executors –​people appointed under the will to administer the distribution of the estate according to the deceased’s wishes. Administrators –​people who administer the distribution of the estate in an intestacy. They are appointed according to statute. Personal representatives –​this is a generic term and includes the executors if the deceased left a will, or the administrators in the case of an intestacy. Beneficiaries –​those persons either named in the will or who satisfy the rules of intestacy and who inherit all or part of the deceased’s estate. Dependants –​those persons for whom the deceased used to provide financially. 5.4.1 Law Reform (Miscellaneous Provisions) Act 1934 This section considers the situation where a claimant dies before they have received an award of compensation. A claimant could die because of the defendant’s negligence. For example, where the defendant causes a fatal road accident, or where the claimant is seriously injured by the defendant and dies of their injuries some time later. Alternatively, a claimant might die for some reason which is completely unrelated to their claim against the defendant. For example, where the defendant causes damage to the claimant’s car and the claimant later dies of an illness while the claim in respect of the car is still pending. The rules which deal with the effect of death on the claimant’s claim are the same in both cases and are found in the Law Reform (Miscellaneous Provisions) Act 1934 (the 1934 Act). The 1934 Act does not create any new cause of action. It simply allows existing causes of action to continue after death. Under s 1(1) of the 1934 Act, all causes of action (except claims for defamation and bereavement damages (see 5.4.2)) survive the death of either the claimant or the defendant. A claim by a claimant survives for the benefit of their estate. A claim against a defendant survives against their estate. Under the 1934 Act, no account is taken of any money received by the estate as a result of the death. Examples would be the receipt of insurance money payable on death, or a lump sum payment from a pension. Such sums do not reduce the damages claimed by the estate. Also, any money that the estate has had to pay out because of the death will not be taken into account. Here, the important point is the exception: that reasonable funeral expenses can be claimed, provided they have been paid for by the estate. The rest of this section concentrates on the position of the deceased claimant. The deceased claimant The claim may cover the following: Non-​pecuniary losses: ∘ Pain and suffering and loss of amenity. Naturally, these end at the date of death. Pecuniary losses: ∘ Damage to property, eg clothes or a car damaged in an accident. ∘ Medical and other expenses. Naturally, these will end at the date of death. ∘ Loss of income up to the date of death. 128  Remedies in Tort Where the claimant’s death has been caused by the defendant’s tort, the claim for loss of income under the 1934 Act must end at the date of death. If the deceased claimant leaves dependent relatives, they would be compensated by a claim under the Fatal Accidents Act 1976. This is considered at 5.4.2 below. The claim is brought by the estate, and damages awarded become part of the estate. This means that if the deceased claimant has left a will, the damages will be distributed under the terms of the will. If the deceased claimant died intestate, the damages will pass under the terms of the intestacy. In practical terms, the 1934 Act can affect court proceedings against a defendant, where the claimant has died. First, the claimant might die before they have begun any proceedings against the defendant. In that case their personal representatives will be entitled to commence a claim on behalf of the claimant’s estate. Alternatively, the claimant might die during the proceedings. In other words, the claimant has started proceedings but dies before they are completed. In this case their personal representative will be entitled to continue with the claim on behalf of the estate. What if the claim has already been settled? Finally, note one situation in which the 1934 Act will not be relevant. One application of the 1934 Act is where the claimant’s death was caused by the defendant’s negligence. However, it is possible that a claimant could already have received damages from the defendant before their death. The claimant could have survived for long enough to commence proceedings and receive an award of damages, or the claim could have been settled. In those circumstances there would, of course, be no possibility of a claim on behalf of the claimant’s estate under the 1934 Act after their death. The claimant in this situation has already been compensated in full. Furthermore, the damages paid to a claimant in this situation should reflect their reduced life expectancy (ie that they are likely to die as a result of the defendant’s negligence). They should therefore recover damages for their ‘lost years’ earnings, as considered at 5.3.2.4 above. Those damages should then be available to support the claimant’s dependants after the claimant’s death. 5.4.2 The Fatal Accidents Act 1976 The 1934 Act enables the estate to continue or commence a claim on behalf of a deceased claimant. The estate can claim damages for pain and suffering, loss of earnings, nursing care, property damage, travel expenses, etc, up to the date of death. However, the deceased may well leave behind dependants. The compensation under the 1934 Act does not put these people in the same position they would have been if the accident had never happened. The Fatal Accidents Act 1976 (the 1976 Act) created a new cause of action as it allows dependants to sue for the death of the person on whom they were dependent. A claim under the 1976 Act is usually commenced by the deceased’s personal representatives. A claim under the 1976 Act is dependent on the original cause of action by the deceased person against the defendant. In order to bring a claim under the 1976 Act, claimants have to be able to show that, had the deceased survived, the deceased would have been able to bring a claim against the defendant themselves. Therefore, the defendant must have committed a tort against the deceased. Any defence which was available to defeat the original claim will also defeat the 1976 Act claim. In the case of the defence of contributory negligence, if the deceased’s own damages would have been reduced, damages under the 1976 Act will also be reduced. 129 Tort The nature of the claim under the 1976 Act can be described as being ‘parasitic’ upon the original claim by the deceased. It follows from that ‘parasitic’ nature of the claim that there can be no claim under the 1976 Act –​for dependency or bereavement –​if the deceased person had already completed their claim and received damages from the defendant before they died. If the deceased has already completed their claim, there is no outstanding cause of action to provide the foundation of a claim under the 1976 Act. There are three possible claims under the 1976 Act, which are considered below: a claim on behalf of dependants for loss of dependency; a claim for damages for bereavement –​limited to certain persons only; a claim for funeral expenses –​if paid by the dependants. 5.4.2.1 Loss of dependency In order to claim damages for loss of dependency, a person must satisfy two requirements: They must fall within the class of people listed in the 1976 Act (it comprises current and former married spouses/civil partners, cohabitees who have lived together for at least two years, direct ancestors and descendants, siblings, aunts, and uncles and their descendants, and those treated as children by the deceased in relation to a marriage or civil partnership; the list is definitive, so that if a person does not fall within it, they cannot make a claim). They must show that they had a reasonable expectation of future pecuniary benefit from the deceased. ‘Pecuniary benefit’ does not simply mean provision of money. Dependants can claim for the cost of replacing services which were provided by the deceased. This would cover, for example, childcare, DIY, gardening and housework. Damages are awarded to compensate for the loss of pecuniary benefits from the deceased. In essence, the court needs to look to the future and assess the future pecuniary benefits which the dependants would have received from the deceased. As considered above, future losses are generally calculated by using a multiplicand-​multiplier calculation. Loss of dependency under the 1976 Act is calculated in a similar way. Calculation of dependency The multiplicand The multiplicand is based on the deceased’s net annual earnings. However, the court will also take into account the fact that, if the deceased were alive, they would have spent part of those earnings on themselves. So, not all of the deceased’s salary would have been available to support their dependants. Therefore, in order to avoid over-​compensating the dependants, the deceased’s own living expenses will be deducted from their earnings. That will leave a reduced figure available as the basis for the dependency claim. The conventional deduction is 25% for a married person with children and 33% for a married person without children. Where all of the deceased’s children were no longer dependent upon them at the time of death, then the conventional deduction would also be 33%. The deceased might have contributed to the family’s wealth by means other than net annual salary. If so, such other contributions should become part of the multiplicand calculation. The contributions which may be taken into account include: perks of the job, eg company car, reduced rate mortgage, reduced shopping bills, cheaper holidays, etc; services which were provided to the household which will now have to be paid for, eg gardening, decorating, cooking, cleaning, etc. 130  Remedies in Tort The multiplier In a 1976 Act case the multiplier should be based on the period of loss to the dependant, ie on the period for which the dependency might have continued. Clearly, the longest possible period a dependency could continue would be until the deceased would have ceased to work. In the case of a spouse of a deceased wage earner, it is likely that their period of dependency would continue for this full period –​until the deceased ceased to work. However, if a particular claimant would not be dependent on the deceased for so long, a shorter multiplier should be applied to their claim. So, in the case of a child, the period of dependency would be expected to cease when the child reached the age of 18 or ceased full-​time education. Once the basic period(s) for the multiplier have been calculated, they need to be adjusted –​ in just the same way as for a living claimant. So, in summary, the multiplier in a 1976 Act case would be calculated by taking the period of dependency that the particular dependant might have on the deceased and then converting that into a multiplier by using the Ogden tables. Example The deceased is a married man who, prior to his death, worked full time. His death was caused by the negligence of his employer. He leaves as dependants: his wife; and his grandmother. His grandmother lived rent free and without bills in a granny flat. The basic calculation for the dependency claim under the 1976 Act would be as follows: The multiplicand For the wife –​the deceased’s net earnings +​value of the perks of his job +​value of any services he provided LESS money he spent on himself. For the grandmother –​what it would cost her to pay rent and her bills, etc. The multiplier For the wife –​the multiplier would be based on the balance of the husband’s working life (unless there was any evidence that either of them would die before that time). For the grandmother –​the multiplier would be based on her life expectancy. Clearly, this is likely to be less than the wife’s period of dependency. There are two factors which are not taken into account when calculating the value of a claimant’s lost dependency: damages for a dependent spouse do not take into account their remarriage or prospects of remarriage; the fact that dependants are likely to inherit money from the deceased (under a will or on intestacy). 5.4.2.2 Damages for bereavement The only people who can claim damages for bereavement are: the wife, husband or civil partner of the deceased; the parents (or mother if illegitimate) of a minor who was never married or a civil partner; 131 Tort the cohabiting partner of the deceased, who: (a) was living with the deceased in the same household immediately before the date of the death; and (b) had been living with the deceased in the same household for at least two years before that date; and (c) was living during the whole of that period as the wife or husband or civil partner of the deceased. The amount of bereavement damages is currently £15,120. This is a fixed sum. It is not in the court’s discretion. Only one award of £15,120 will be made in respect of the death which will be split equally between all of the eligible recipients (ie a spouse and a cohabiting partner, or both parents of an unmarried minor). 5.4.2.3 Funeral expenses The third claim permitted by the 1976 Act is a claim for funeral expenses, where they have been paid by the dependants. (Funeral expenses paid out of the deceased’s estate will be claimed under the 1934 Act.) ACTIVITY Damages on death Lucy was severely injured when Chris negligently collided with her on a pelican crossing. Lucy suffered head injuries and was totally paralysed. She was taken to hospital. For a week she suffered intense pain. Then she became unconscious and remained in a coma for 12 weeks, at which point she died. Lucy’s funeral was paid for out of her estate. Under her will, she left all of her remaining estate to her children. Lucy was aged 30 at the time of her death. She was a single mother of two young children aged 4 and 6. She was employed as a financial assistant earning £25,000 per annum. She had good prospects of being promoted to the post of financial manager. She expected to work until she was 60. What claims for damages can be made following Lucy’s death? Explain what the damages will cover and how they will be calculated. Note: We do not expect you to be able to give a figure for Lucy’s non-​pecuniary losses, but we do expect you to know what it should cover. Similarly, we do not expect you to be able to give a final figure for the award for loss of dependency, but we do expect you to know how it would be arrived at. COMMENT Lucy’s Estate v Chris At the time of her death Lucy had an outstanding claim against Chris –​in negligence. What is the effect of her death upon that claim? Under the Law Reform (Miscellaneous Provisions) Act 1934, Lucy’s cause of action against Chris survives for the benefit of her estate. It will be necessary to establish liability in the normal way, and then deal with the principles by which the amount, ie quantum of damages would be assessed. Liability All of the elements of a claim in negligence appear to be satisfied. Duty of care Chris owed Lucy an established duty of care as a road-​user. 132  Remedies in Tort Breach of duty On the facts, we are told that Chris was driving negligently and collided with Lucy on a pelican crossing. Thus, it seems clear he has fallen below a reasonable standard of care. Causation of damage Causation in fact: on the facts it is clear that, but for Chris’s negligent driving, Lucy would not have been injured and subsequently died. Intervening acts There are no intervening acts to break the chain of causation. Remoteness of damage Lucy’s injuries and death are a reasonably foreseeable consequence of Chris’s negligence and so are not too remote. Quantum of damages The claim for the estate will cover: Non-​pecuniary losses Damages will be awarded for Lucy’s pain and suffering and loss of amenity. On the facts, she suffers pain for one week and then is in a coma. She will recover pain and suffering (and loss of amenity) for the one week when she is conscious. No damages will be recovered for pain and suffering during the 12-​week coma. However, damages for loss of amenity will still be awarded for that period. Pecuniary losses If Lucy suffered a loss of earnings in the 13 weeks between the accident and her death, damages will be awarded to cover that loss. There can be no claim for any loss of earnings after the date of death (s 1(2)(a)). If Lucy’s clothing was damaged, the cost of this will be recoverable. Any other expenses resulting from the accident will also be recoverable, eg any medical expenses. Funeral expenses Lucy’s funeral was paid for by her estate, so funeral expenses can be included in the claim for the estate (provided they were reasonable). Lucy’s dependent children v Chris Lucy’s dependent children will be able to make a claim for damages under the Fatal Accidents Act 1976. The dependants need to establish that, had Lucy survived, she would have had a valid claim against Chris. This is satisfied, as outlined above. The children can make a claim for loss of dependency. They need to be able to show that: they fall within the class of dependants as listed in the Act; and they were actually financially dependent on Lucy. On the facts, both of these are clearly satisfied. 133 Tort How will damages for loss of dependency be assessed? The court will use a ‘multiplier/​multiplicand’ method. It will look at the following: The value of pecuniary benefits Multiplied by The likely period of dependency (the provided by Lucy (the multiplicand) multiplier) The multiplicand will be based on Lucy’s net salary. However, this will be reduced to take account of the amount Lucy would have spent on herself had she been alive. It could also be increased to take account of her prospects of promotion. The aim is to arrive at an annual figure which would have been available for the support of Lucy’s dependants. Thus, the annual figure could also be increased to take account of the financial value of the services which Lucy would have provided, such as housework. The multiplier will reflect the length of time for which the children could expect to be dependent on Lucy. On the facts, the children are aged 4 and 6. Their period of dependency would last until they reach 18, or cease full-​time education. (The court would need evidence to determine whether they are likely to remain in education beyond age 18.) The basic multiplier, obtained by estimating the likely period of dependency, will then be adjusted using the Ogden tables and in accordance with the reduction in the discount rate that came into effect on 5 August 2019. Bereavement damages There will be no claim for bereavement damages on these facts. A child cannot claim bereavement damages for the death of a parent. Finally, on the facts, Lucy left her estate to her children. Thus, the children will inherit the damages awarded to Lucy’s estate under the 1934 Act. They will gain this financial benefit as a result of her death. However, under the Fatal Accidents Act 1976, s 4, this is to be disregarded when assessing the damages for loss of dependency. SUMMARY A person brings a claim in tort because they are seeking a remedy for the harm they have suffered. A lawyer in practice always has to consider two issues when advising a client: ∘ Which tort deals with the kind of harm this claimant has suffered, and what does the claimant have to prove to establish a claim? ∘ What remedy can they expect to obtain? Previous chapters concentrated on the first of these questions –​what the claimant must prove to establish a claim. However, this chapter demonstrates that successfully establishing a claim is only half the story. The most important issue from the client’s point of view is usually what remedy they can obtain. This chapter focuses on the award of damages as this is the usual remedy for a claim in tort. In the context of damages for personal injury, this chapter reviews the principles by which damages are assessed. It has considered the pecuniary elements in an award of damages, such as loss of earnings, and distinguishes these from the non-​pecuniary elements, such as pain and suffering. This chapter also considers the awards of damages which are relevant when the victim of the tort has died. The key distinction is between the claims brought on behalf of the estate under the 1934 Act, and the claims brought by dependants under the 1976 Act. 134  Remedies in Tort Figure 5.1 Remedies: damages for personal injury flowchart Has the claimant established that the defendant is liable in tort? YES. Consider the NO. The claimant will following losses not be compensated in tort for their losses Non-pecuniary loss Pecuniary loss (general damages) Special damages, eg General damages Pain and (PS) Loss of – properly damage (for future losses) suffering amenity (LA) – medical expenses eg medical expenses – lost income (pre-trial/ – cost of care PSLA settlement) (calculated – lost income (amount of compensation using receipts/wage (post trial/settlement) determined using the slips etc) (calculated using the Judicial College Guidelines, multiplier method) Kemp and Kemp and previous case law) Figure 5.2 Remedies: damages on death under the Law Reform (Miscellaneous Provisions) Act 1934 flowchart Did the deceased have a claim in tort against the defendant but died before they received compensation from the defendant? YES. The deceased’s NO. There is no claim claim continues for the for compensation benefit of their estate. by the estate of the The estate may claim deceased under the the following from the LRMPA defendant Deceased non-pecuniary Deceased pecuniary losses Cost of the deceased’s funeral loss to date of death (special damages only) (if paid for by the estate) (general damages) eg property damage, medical (calculated using receipts) expenses, lost income (to date of death) PS LA (calculated using receipts/ PSLA wage slips etc) (amount of compensation determined using the Judicial College Guidelines, Kemp and Kemp and previous case law) 135 Tort Figure 5.3 Remedies: damages on death under the Fatal Accidents Act 1976 flowchart Was the deceased’s death due to tort committed by the defendant and the deceased had not received compensation from the defendant? YES NO Consider the following There is no claim for claims damages under the FAA Loss of dependency: Bereavement award: Funeral expenses did the deceased leave a fixed sum is payable (if paid by a dependant) dependants who: to those on the statutory list 1. Are on the statutory list and (each claimant receives an 2. Were financially dependent equal share of the fixed sum) on the deceased? YES NO Amount of compensation There is no claim for is calculated using the loss of dependency multiplier method 136