damages for personal injury: non-pecuniary loss - Law Commission

More documents

Recommendations

Info

(6) An exclusion, on the Pearson model, of damages for non-pecuniary loss in the first three months after the accident would in many case exclude compensation when a victim’s pain is at its worst. 17 We were convinced by these arguments and therefore provisionally proposed that no threshold be introduced, particularly given that we could not recommend, within our terms of reference, a trade-off with a new no-fault compensation scheme. 18 2.27 A large majority of those who responded on this issue, 93 per cent, agreed with our provisional recommendation. There was support for the reasons given by us for our conclusion. In addition, it was thought that a threshold would be seen by the public as unfair and would lead to injustice and inconsistency (because it would be impossible to draw a clear line between those cases which attracted compensation and those which did not). Mention was made of practical issues. Many saw the risk of exaggeration as a decisive factor weighing against a threshold, citing experience with the Criminal Injuries Compensation Board in support of this contention. 19 2.28 In accordance with our provisional conclusion and the views of consultees, we do not recommend the introduction of a threshold for the recovery of damages for non-pecuniary loss. 5. SHOULD INTEREST BE AWARDED ON DAMAGES FOR NON-PECUNIARY LOSS AND, IF SO, HOW MUCH INTEREST? 20 2.29 We noted in the consultation paper that the award of interest on damages for personal injury is compulsory, unless there are special reasons to the contrary. The court is, however, given a discretion as to what part of the total award should carry interest, in respect of what period and at what rate. Subject to developments following Wells v Wells 21 discussed below, 22 the present guideline for non-pecuniary loss, as laid down by the Court of Appeal in Birkett v Hayes 23 and confirmed by the House of Lords in Wright v British Railways Board, 24 is that interest should be awarded on the whole sum at a rate of 2 per cent from the date of service of the writ until the date of trial. 17 See para 2.41 below. 18 See particularly the description of item 11 in the Fifth Programme of Law Reform (1991) Law Co No 200. Also see paras 1.1 above and 3.60 below. 19 This point was made by the Judges of the Queen’s Bench and Family Divisions and by Peter Weitzman QC. 20 See for discussion of this issue Damages for Personal Injury: Non-Pecuniary Loss, Consultation Paper No (1995) paras 4.105-4.125. 21 [1998] 3 WLR 329. 22 See para 2.57 below. 23 [1982] 1 WLR 816. 24 [1983] 2 AC 773. 11
2.30 The recovery of interest on the non-pecuniary aspect of personal injury damages has been the subject of some controversy. In 1973 the Law Commission recommended that there be no interest on this element of an award. 25 It was contended that since damages for non-pecuniary loss were already adjusted for inflation, awarding interest led to double recovery. The Pearson Commission exposed the flaw in this argument: claimants are, in theory, protected from the effects of past inflation because damages are awarded in the money of the day of the trial or settlement. This does not, however, compensate for loss consequent on being kept out of the damages. 26 The Pearson Commission nevertheless concluded that interest should not be payable on non-pecuniary loss. 27 It did so for two reasons: first, in times of high inflation an investor cannot generally expect to do much more than maintain the real value of his or her investment, once inflation and tax are taken into account. It is therefore sufficient merely to award damages according to values at the time of trial. Secondly, it was seen as inappropriate to apply detailed financial calculations to figures which are essentially arbitrary. Moreover, in principle a distinction should be made between past and future nonpecuniary loss, but in practice this would be difficult and highly artificial. 2.31 In our consultation paper we considered that the Pearson Commission’s first argument could be met by provision for a low rate of interest. Indeed this was the basis of the decisions in Birkett v Hayes 28 and Wright v British Railways Board. 29 In relation to the second point, we observed that, although the sum of damages for non-pecuniary loss is conventional, the claimant is entitled to have it paid promptly. There is as much justification for interest to be paid on damages for past non-pecuniary loss as for past pecuniary loss. We also noted the pragmatic argument that the accrual of interest may encourage defendants to settle or to bring cases to trial quickly. We reached the provisional conclusion that interest should continue to be awarded on damages for non-pecuniary loss, and asked consultees if they agreed. Of consultees who responded to this question, 82 per cent agreed with our conclusion. 2.32 We therefore recommend that interest should continue to be awarded on damages for non-pecuniary loss in personal injury cases. 2.33 We went on to consider whether interest should be awarded only on pre-trial nonpecuniary loss. We noted that the present practice is for interest to be awarded on the whole sum of damages for non-pecuniary loss, on the basis that non-pecuniary loss is by its nature indivisible and so cannot be split between past and future loss. 30 We put the argument that principle and fairness required a different 25 (1973) Law Com No 56, paras 273-277 & 286. 26 The Pearson Commission, Report on Civil Liability and Compensation for Personal Injury (1978) Cmnd 7054, Volume I, para 746. 27 Ibid, paras 747-748. 28 [1982] 1 WLR 816. 29 [1983] 2 AC 773. 30 It is noteworthy that in arguing that no interest should be paid on damages for nonpecuniary loss, the Law Commission in 1973 and the Pearson Commission, both concluded that no attempt should be made to provide for separation of damages for past and future non-pecuniary loss. See (1973) Law Com No 56, para 273 & The Pearson 12
Page 1 and 2: The Law Commission Law Com No 257 D
Page 3 and 4: THE LAW COMMISSION DAMAGES FOR PERS
Page 5 and 6: v Paragraphs Page (5) How should aw
Page 7 and 8: the latest edition of the Judicial
Page 9 and 10: Chancellor’s Department, who advi
Page 11 and 12: 2.5 We rejected adoption of the “
Page 13 and 14: distinctions to be made on the basi
Page 15: 2.22 There was support for higher a
Page 19 and 20: interest is the date of service of
Page 21 and 22: eturn on any investment where the r
Page 23 and 24: likely to be small. On the other ha
Page 25 and 26: or not death was caused by the inju
Page 27 and 28: PART III WHERE CHANGE IS REQUIRED I
Page 29 and 30: variation between some consultees a
Page 31 and 32: special damages. For example, more
Page 33 and 34: 3.13 Of those who favoured one over
Page 35 and 36: Plaintiffs with substantial claims
Page 37 and 38: (a) Damages for non-pecuniary loss
Page 39 and 40: four bands, made up of those who re
Page 41 and 42: injuries in the present scale of aw
Page 43 and 44: (under the present law), but there
Page 45 and 46: woman which are among the worst tha
Page 47 and 48: amenity was £50,000. This becomes
Page 49 and 50: Up to the current maximum TABLE 2 4
Page 51 and 52: view the research findings indicate
Page 53 and 54: 3.63 We accept that there is truth
Page 55 and 56: seem to us quite wrong for the gene
Page 57 and 58: victim”, rather than to produce a
Page 59 and 60: earnings and expenses at a purely n
Page 61 and 62: The experience of other jurisdictio
Page 63 and 64: although the pattern is not entirel
Page 65 and 66: that a judge sitting on his own wit
Page 67 and 68:
and Wales has tended to fall behind
Page 69 and 70:
(V) THE LAW COMMISSION’S RECOMMEN
Page 71 and 72:
(1) Should juries play a greater ro
Page 73 and 74:
(a) Creation of a Compensation Advi
Page 75 and 76:
3.125 Some consultees raised the di
Page 77 and 78:
tariff. Persuasive arguments were m
Page 79 and 80:
with the “tariff” will be overt
Page 81 and 82:
3.146 Yet in Wright v British Railw
Page 83 and 84:
3.148 Housecroft v Burnett 181 is a
Page 85 and 86:
award of very much less will be app
Page 87 and 88:
judgments by the Court of Appeal an
Page 89 and 90:
3.162 We acknowledge that it is ent
Page 91 and 92:
3.167 In this regard we have found
Page 93 and 94:
the award in year 5 should be £x p
Page 95 and 96:
quadriplegia plus blindness plus de
Page 97 and 98:
personal injury cases recommended b
Page 99 and 100:
authorities. It was thought that th
Page 101 and 102:
PART IV WHERE CHANGE IS REQUIRED II
Page 103 and 104:
compensatory (including aggravated)
Page 105 and 106:
acket, and we envisage that in the
Page 107 and 108:
3. THE ASSESSMENT OF COMPENSATORY D
Page 109 and 110:
persuaded, in the light of consulte
Page 111 and 112:
not agree on the level at which a s
Page 113 and 114:
(7) Does the question of overlap (b
Page 115 and 116:
(4) Punitive and restitutionary dam
Page 117 and 118:
Damages (Role of Jury) 1 DRAFT OF A
Page 119 and 120:
EXPLANATORY NOTES This draft Bill i
Page 121 and 122:
APPENDIX C LIST OF PERSONS AND ORGA
Page 123 and 124:
Irwin Mitchell Martin Kramer, Kathe
Page 125 and 126:
The Medical Defence Union Ltd Natio
show all

damages for personal injury: non-pecuniary loss - Law Commission

Create successful ePaper yourself

Delete template?

Save as template?