The plaintiff was injured in an accident at work. His employer was partly responsible. For 13 weeks he received full sick pay in accordance with his contract. He then received half his pre-accident earnings under the permanent health insurance scheme for which his employer paid. The injuries prevented him from resuming his pre-accident work as a machine operator. The employers offered alternative, less well-paid employment as a weighbridge operator.
Held: His claim for damages in respect of loss of earnings fell to be reduced by the amounts of the payments from his employer through the schemes. The payments were indistinguishable in character from the uninsured sick pay in lieu of wages: ‘They are payable under a term of the employee’s contract by the defendants to the employee qua employee as a partial substitute for earnings and are the very antithesis of a pension which is payable only after employment ceases. The fact that the defendants happen to have insured their liability to meet these contractual commitments as they arise cannot affect the issue in any way.’ The general rule was that: ‘prima facie the only recoverable loss is the net loss. Financial gains accruing to the plaintiff which he would not have received but for the event which constitutes the plaintiff’s cause of action are prima facie to be taken into account in mitigation of losses which that event occasions to him. In many, perhaps most cases, both losses and gains will come into the calculation.’ Lord Reid’s dichotomy in Parry ‘must not be allowed to obscure the rule that prima facie the only recoverable loss is the net loss’. Describing the benevolence exception: ‘Secondly, when the plaintiff receives money from the benevolence of third parties prompted by sympathy for his misfortune, as in the case of a beneficiary from a disaster fund, the amount received is again to be disregarded’. ‘There are however, a variety of borderline situations where a plaintiff may receive money which, but for the wrong done to him by the defendant, he would not have received and where there may be no obvious answer to the question whether the rule against double recovery or some principle derived by analogy from one of the two classic exceptions to that rule should prevail. Some of these problems have been resolved by legislation, sometimes in the form of a compromise solution providing that a proportion only of certain statutory benefits is to be taken into account when assessing damages. But where there is no statute applicable the common law must solve the problem unaided and the possibility of a compromise solution is not available. Many eminent common law judges, I think it is fair to say, have been baffled by the problem of how to articulate a single guiding rule to distinguish receipts by a plaintiff which are to be taken into account in mitigation of damage from those which are not.’
Judges:
Lord Bridge of Harwich
Citations:
[1988] AC 514
Jurisdiction:
England and Wales
Citing:
Cited – Parry v Cleaver HL 5-Feb-1969
PI Damages not Reduced for Own Pension
The plaintiff policeman was disabled by the negligence of the defendant and received a disablement pension. Part had been contributed by himself and part by his employer.
Held: The plaintiff’s appeal succeeded. Damages for personal injury were . .
Appeal from – Hussain v New Taplow Paper Mills Ltd CA 1987
The worker had been injured at work. His employer was partly at fault. The employer had a compensation scheme for which it paid, and sought to deduct the payments to the worker from the damages it was to pay. The Court was also invited by the . .
Cited by:
Cited – Longden v British Coal Corporation HL 13-Mar-1997
The plaintiff was injured whilst at work in one of the defendant’s collieries. The House considered the deductibility from damages awarded for personal injury of a collateral benefit.
Held: The issue of deductibility where the claim is for . .
Cited – Dimond v Lovell CA 29-Apr-1999
Mrs Dimond had a car accident as a result of Mr Lovell’s negligence and sought to recover from him the cost of the hire of a replacement vehicle while her car was being repaired. Under clause 5 of the hire agreement the hire company had the conduct . .
Cited – Pirelli General Plc and others v Gaca CA 26-Mar-2004
The claimant was awarded damages from his employers, who claimed that the benefits received by the claimant from an insurance policy to which the defendants had contributed should be set off against the claim.
Held: McCamley was no longer good . .
Cited – McCamley v Cammell Laird Shipbuilders Limited CA 1990
The plaintiff suffered injury at work and claimed damages. He had received a lump sum under insurance provided by the defendant’s parent company for the benefit of employees injured at work. Did the lump sum payment fall to be deducted from the . .
Cited – O’Brien and others v Independent Assessor HL 14-Mar-2007
The claimants had been wrongly imprisoned for a murder they did not commit. The assessor had deducted from their compensation a sum to represent the living costs they would have incurred if living freely. They also appealed differences from a . .
Lists of cited by and citing cases may be incomplete.
Personal Injury, Damages
Updated: 29 April 2022; Ref: scu.183063