In each of three cases, the plaintiffs had suffered serious injury. They complained that the court had made a substantial reduction of their damages award for loss of future earnings and the costs of future care.
Held: The appeals succeeded.
The purpose of an award of damages in tort was to make good to the injured Plaintiff, so far as money can do so, the loss that he had suffered as a result of the wrong done to him. In awarding damages in the form of a lump sum the Court had to calculate as best it could the sum that would be adequate, by drawing down both capital and income, to apply periodical sums equal to the Plaintiff’s estimated loss over the period during which that loss was likely to continue. The injured Plaintiff was not in the same position as an ordinary prudent investor and was entitled to the greater security and certainty achieved by investment in index-linked government securities, in respect of which the current net discount rate was 3%. The courts should allow for the indexation of investment returns linked with the index-linked government securities index, since the claimants would be unable to risk fluctuations in investment returns from equity based investments.
Lord Hope said: ‘the object of the award of damages for future expenditure is to place the injured party as nearly as possible in the same financial position as he or she would have been in but for the accident. The aim is to award such a sum of money that will amount to no more, and at the same time no less, than the net loss.’
Lord Lloyd of Berwick said of the Ogden Tables: ‘I do not suggest that the judge should be a slave to the tables. There may well be special factors in particular cases. But the tables should now be regarded as the starting-point, rather than a check. A judge should be slow to depart from the relevant actuarial multiplier on impressionistic grounds, or by reference to ‘a spread of multipliers in comparable cases’ especially when the multipliers were fixed before actuarial tables were widely used.’
Lord Clyde said: ‘One clear principle is that what the successful plaintiff will in the event actually do with the award is irrelevant.’
Lord Lloyd of Berwick, Lord Steyn, Lord Hope of Craighead, Lord Clyde, Lord Hutton
Times 20-Jul-1998, Gazette 16-Sep-1998, [1998] UKHL 27, [1999] 1 AC 345, [1998] 3 WLR 329, [1998] 3 All ER 481, [1998] PIQR Q56, [1998] IRLR 536, [1998] 2 FLR 507, (1998) 43 BMLR 99, [1998] Fam Law 593
House of Lords, Bailii
Damages Act 1996 2(1)
England and Wales
Citing:
Appeal from – Wells v Wells; Thomas v Brighton Health Authority; Page v Sheerness Steel Company Limited CA 23-Oct-1996
The plaintiff was a member of a scheme providing permanent health insurance benefits. The issue was whether the insurance monies received by the plaintiff were to be treated as sick pay (and therefore deductible from the damages) or insurance monies . .
Cited by:
Cited – McNulty v Marshalls Food Group Ltd OHCS 7-Jan-1999
(Scotland) The pursuer had no pre-existing degenerative condition of his lower spine, although he had degenerative changes in his cervical spine. As a result of an accident he sustained a prolapsed inter vertebral disc in his lumbar spine as a . .
Cited – Warren v Northern General Hospital Trust CA 10-Apr-2000
It was not open to lower courts to reduce the guideline discount interest rate applied to damages awards to account for future returns. The original figure was set in the Act and by the House of Lords in Wells v Wells. Also the lower rates of . .
Cited – Ogden Tables LCJ 3-May-1999
Given the reduction in levels of interest on government index-linked stocks, and the assumed rate of return for the purposes of the assumed rate of return, the committee would continue to fix the return rate rather than set a method of calculation. . .
Cited – Dharamshi v Dharamshi CA 5-Dec-2000
On a divorce where there were fairly substantial sums at issue, the two parties argued for different bases for calculation of the wife’s interests, either her reasonable needs according to Duxbury tables, or otherwise to reflect the particular . .
Cited – Cooke, Sheppard, Page v United Bristol Health Care, Stibbe and Another, Lee CA 16-Oct-2003
The claimant appealed against his damages award, saying that it should have allowed for the anticipated rises in the cost of providing his care in the future.
Held: Rises in future costs were already factored into the tables used for . .
Cited – Eagle (By Her Litigation Friend) v Chambers CA 29-Jul-2004
The claimant had been severely injured, and a substantial damages award made. Cross appeals were heard as to the several elements awarded. The claimant sought as part of her award of damages for personal injuries the fees she would have to pay to . .
Cited – Collett v Smith and Another QBD 11-Aug-2008
The claimant had been an eighteen year old playing football for Manchester United reserves when he was injured by a foul tackle which ended his football career. The defendant admitted liability, but denied that he would have gone on to be a premier . .
Cited – A v B Hospitals NHS Trust Admn 10-Nov-2006
The claimant baby had suffered catastrophic injuries at birth in the defendant’s hospital. Liability having been admitted, the court now considered whether damages should be paid as a lump sum or by periodical payments.
Held: ‘ the form of . .
Applied – Barry v Ablerex Construction (Midlands) Ltd QBD 22-Mar-2000
After a delay of delay 5 years, the judge deducted two years interest from the award to reflect the plaintiff’s delay. . .
Cited – Barry v Ablerex Construction (Midlands) Ltd CA 30-Mar-2001
It was appropriate to reduce the interest discount rate used to calculate damages awards in personal injury cases for future losses, from 3 per cent to 2 per cent. This reflected the general reduction in such interest rates since the Act came into . .
Cited – Knauer v Ministry of Justice SC 24-Feb-2016
The court was asked: ‘whether the current approach to assessing the financial losses suffered by the dependant of a person who is wrongfully killed properly reflects the fundamental principle of full compensation, and if it does not whether we . .
Cited – Heil v Rankin, Rees v Mabco (102) Ltd, Schofield v Saunders and Taylor Ltd and Other cases CA 23-Mar-2000
The Law Commission had recommended that the general level of damages awarded for pain suffering and loss of amenity in personal injury cases should be raised. The Court now considered several cases on the issue.
Held: The court would do so. . .
Lists of cited by and citing cases may be incomplete.
Personal Injury, Damages
Leading Case
Updated: 01 November 2021; Ref: scu.158958