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

case following issue, which may be difficult where a person has started proceedings
prematurely to ensure entitlement to interest from an early date.
2.43 In any event, it was thought that making interest payable from the date of the writ
does not affect the date on which claimants issue proceedings. If there is a concern
to reduce delay there are many more effective ways in which courts can penalise
dilatory claimants. Some consultees suggested that the courts retain a discretion to
reduce the period for which interest is payable in cases of delay. The point was
made, however, that delay is rarely deliberate, but more likely to be the result of
inexperience or incompetence.
2.44 Amongst those who agreed with the present rule, there was support for the
grounds of the decisions in Jefford v Gee 40
and Wright v British Railways Board. 41
Also, dating interest from service of the writ acted as a balance to the failure to
divide pre and post trial damages for non-pecuniary loss. Practical arguments were
stressed. Aside from the point that payment of interest from the date of the
accident would lead to delay on the part of claimants, it would not always be easy
to ascertain the date from which interest should be payable, for example in disease
cases. There might also be unfairness to defendants, where proceedings were
delayed because an accident victim was subject to a legal disability, for example if
he or she were a minor when the accident occurred.
2.45 While we can see the force of some of the arguments put forward by consultees in
favour of awarding interest from the date of the accident, we consider these to be
balanced by the benefit to claimants of interest being awarded not only on
damages for past non-pecuniary loss, but also on damages for future nonpecuniary
loss. Hence, we recommend that payment of interest on damages
for non-pecuniary loss should continue to run from the date of service of
the writ.
2.46 Turning to the rate of interest, which has been laid down to be 2 per cent, 42
we
noted that in our Report on Structured Settlements and Interim and Provisional
Damages we recommended that to determine the expected return on damages for
future pecuniary loss and thus the appropriate rate of discount to be applied when
assessing those damages, legislation should be introduced requiring the courts to
take account of the net rate of return on an index-linked government security
(“ILGS”). 43
We considered that ILGS constituted the best evidence of the real
40 [1970] 2 QB 130.
41 [1983] 2 AC 773.
42 See para 2.29 above.
43 (1994) Law Com No 224, paras 1.12, 2.24-2.36 and 6.2-6.4. This recommendation was
not implemented in full in the Damages Act 1996. Instead s 1 of the Damages Act 1996
provides:
“(1) In determining the return to be expected from the investment of a sum awarded
as damages for future pecuniary loss in an action for personal injury the court
shall, subject to and in accordance with rules of court made for the purposes of this
section, take into account such rate of return (if any) as may from time to time be
prescribed by an order made by the Lord Chancellor.
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