Learning Outcomes
This article examines the principles governing compensatory damages awarded in tort claims for personal injury and death. You will learn the distinction between different types of damages, the aims of compensation, the key statutory frameworks, and the methods used for calculating awards, particularly for future losses. This knowledge is essential for advising clients on potential recovery and quantum in personal injury and fatal accident litigation, enabling you to apply these rules effectively in SQE1 assessment scenarios.
SQE1 Syllabus
For SQE1, you must understand how compensatory damages function within tort law, particularly in negligence claims involving personal injury or death. This involves understanding the fundamental principles and practical application of damage assessment rules. Your revision should concentrate on:
- The primary aim of compensatory damages in tort.
- The classification of damages into pecuniary and non-pecuniary, and general and special damages.
- The main heads of damage recoverable for personal injury claims, including pain, suffering, loss of amenity, loss of earnings, and expenses.
- The principles for calculating future losses, including the multiplier/multiplicand method.
- The statutory frameworks governing claims following death: the Law Reform (Miscellaneous Provisions) Act 1934 and the Fatal Accidents Act 1976.
- The types of damages recoverable under fatal accident claims, including bereavement awards and loss of dependency.
- Factors affecting the final award, such as mitigation and contributory negligence.
Test Your Knowledge
Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.
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What is the fundamental principle guiding the award of compensatory damages in tort?
- To punish the defendant for wrongdoing.
- To restore the claimant to their pre-tort position.
- To provide a fixed sum based on the severity of the injury.
- To cover only the claimant's legal costs.
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Which of the following is an example of non-pecuniary loss?
- Cost of physiotherapy treatment.
- Loss of earnings up to the date of trial.
- Compensation for pain and suffering.
- Cost of adapting the claimant's home.
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Under the Fatal Accidents Act 1976, who is typically eligible for a bereavement award?
- All close family members.
- The deceased's employer.
- The deceased's spouse or civil partner.
- Any friend who provided care.
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True or False: Special damages relate to losses that are not easily quantifiable in monetary terms, such as loss of enjoyment of life.
Introduction
When a claimant succeeds in a tort claim, typically for negligence, the primary remedy sought is damages – monetary compensation. The fundamental aim of compensatory damages is restitutio in integrum: to put the claimant back into the position they would have been in had the tort not occurred. This principle applies to claims involving personal injury and those resulting from death. This article explores the classification, calculation, and relevant legal principles governing compensatory damages in these contexts, focusing on knowledge required for the SQE1 assessment.
Types of Compensatory Damages
Compensatory damages are broadly divided into two categories: pecuniary losses and non-pecuniary losses. Further classification distinguishes between general and special damages.
Pecuniary Damages
These are losses that can be quantified in financial terms. They represent the actual financial expenditure and loss of earnings resulting from the tort.
Key Term: Pecuniary damages Financial losses that can be calculated with relative precision, such as lost earnings or medical expenses.
Pecuniary losses include costs already incurred up to the date of trial (past losses) and those expected to arise in the future (future losses). Examples include medical treatment costs, care expenses, loss of earnings, and damage to property.
Non-Pecuniary Damages
These damages compensate for losses that are not easily quantifiable in monetary terms but represent significant harm to the claimant.
Key Term: Non-pecuniary damages Losses that are not primarily financial in nature, compensating for harms such as pain, suffering, and loss of quality of life.
The main heads of non-pecuniary loss are pain and suffering, and loss of amenity (the loss of enjoyment of life resulting from the injury). Assessing these damages is inherently subjective and relies on judicial guidelines and precedent.
General and Special Damages
This classification relates to how damages are pleaded and calculated, overlapping with the pecuniary/non-pecuniary distinction.
Key Term: Special damages Losses that can be specifically calculated and proven up to the date of trial, typically encompassing past pecuniary losses like pre-trial loss of earnings and expenses.
Key Term: General damages Losses that are not capable of precise calculation at the date of trial. This includes all non-pecuniary losses (pain, suffering, loss of amenity) and future pecuniary losses (future loss of earnings, future care costs).
Damages for Personal Injury Claims (Living Claimant)
Where the claimant survives the tortious event but suffers personal injury, damages are assessed to cover both pecuniary and non-pecuniary losses.
Non-Pecuniary Losses
Pain and Suffering
This head compensates for the physical pain and mental anguish experienced due to the injury, both past and future. It is assessed subjectively – the claimant must be aware of the pain to claim for it. Therefore, a claimant who is unconscious cannot claim for pain and suffering during the period of unconsciousness.
Loss of Amenity
This compensates for the reduced ability to enjoy life, pursue hobbies, or engage in activities due to the injury. It is assessed objectively, meaning an award can be made even if the claimant is unconscious and unaware of their loss.
Quantification
Awards for pain, suffering, and loss of amenity (PSLA) are typically made as a single lump sum. Quantification relies heavily on the Judicial College Guidelines and comparable case law, considering the severity and duration of the injury and its impact on the claimant's life.
Pecuniary Losses
Medical and Other Expenses
Claimants can recover reasonable expenses incurred due to the injury. This includes costs of medical treatment (including private treatment, even if NHS care is available), therapies, necessary aids and equipment, adaptations to accommodation, travel costs, and the cost of care (professional or gratuitously provided by family/friends). Past expenses are claimed as special damages; future expenses are general damages calculated using the multiplier/multiplicand method.
Loss of Earnings
Compensation is awarded for income lost due to the injury preventing the claimant from working.
- Past Loss of Earnings: Calculated precisely from the date of injury to the date of trial/settlement, based on net earnings (after tax and national insurance). This is special damages.
- Future Loss of Earnings: Awarded as a lump sum for projected future income loss. This is general damages, calculated using the multiplier/multiplicand method.
Key Term: Multiplier In damages calculation, a figure representing the number of years for which a future loss (eg, earnings, care costs) is expected to continue, adjusted for factors like accelerated receipt and life contingencies.
Key Term: Multiplicand In damages calculation, the figure representing the claimant's net annual loss (eg, loss of earnings, cost of care).
The multiplier is derived from actuarial tables (Ogden tables) considering the claimant's age, working life expectancy, and the current discount rate set by the Lord Chancellor. The discount rate adjusts the lump sum to reflect the investment return the claimant is expected to earn.
Key Term: Discount rate A percentage rate set by the Lord Chancellor, used to adjust lump sum awards for future pecuniary loss to reflect the real rate of return expected from investing the sum.
- Loss of Earning Capacity: If the injury causes a long-term disadvantage on the open labour market, even if the claimant returns to their previous job, an award (a Smith v Manchester Corporation award) may be made for this risk.
- Lost Years: If the injury shortens the claimant's life expectancy, they can claim for loss of earnings during the years they would have worked but for the premature death, subject to deductions for their own living expenses during those years (Pickett v British Rail Engineering).
Factors Affecting the Award
- Mitigation: Claimants must take reasonable steps to mitigate (minimise) their losses. Failure to do so can lead to a reduction in damages.
- Contributory Negligence: If the claimant’s own carelessness contributed to their injury or its severity, damages may be reduced proportionally under the Law Reform (Contributory Negligence) Act 1945.
- Collateral Benefits: Certain payments received by the claimant due to the injury (eg, insurance payouts, charitable donations) are generally not deducted from the damages award. However, specified state benefits received are deducted, with the defendant required to repay these amounts to the state via the Compensation Recovery Unit (CRU).
Damages Following Death
Where the victim of the tort dies, compensation principles are governed primarily by two statutes.
Law Reform (Miscellaneous Provisions) Act 1934
This Act allows the deceased's existing causes of action in tort (except defamation) to survive for the benefit of their estate. The claim is brought by the personal representatives.
- Damages Recoverable: The estate can recover damages for losses suffered by the deceased up to the date of death. This includes:
- Non-pecuniary losses (pain, suffering, loss of amenity) experienced before death.
- Pecuniary losses (loss of earnings, expenses) incurred before death.
- Damage to property.
- Reasonable funeral expenses if paid by the estate.
- Limitations: No damages are awarded for losses that would have occurred after death, nor for the death itself.
Fatal Accidents Act 1976
This Act creates a separate cause of action for specified dependants of a person whose death was caused by another's wrongful act, neglect, or default. The claim depends on the deceased having had a valid claim had they survived.
Loss of Dependency Claim
Key Term: Loss of dependency A claim under the Fatal Accidents Act 1976 by eligible dependants for the loss of financial support or services they reasonably expected to receive from the deceased had they not died.
- Eligibility: Claimants must be within the statutory list of dependants (eg, spouse, civil partner, cohabitee (living together for ≥2 years), children, parents) and prove actual financial dependency or dependency on services provided by the deceased.
- Calculation: Damages aim to compensate for the lost financial support and/or value of services. This is calculated using the multiplier/multiplicand method, based on the deceased's net income (less their own living expenses) and the period of dependency. The multiplier reflects the period the dependency was expected to last (eg, until children finish education). The claimant's remarriage prospects or inheritance are disregarded.
Bereavement Award
Key Term: Bereavement award A statutory fixed sum awarded under the Fatal Accidents Act 1976 to a limited class of relatives (primarily spouses, civil partners, cohabiting partners, and parents of unmarried minors) to acknowledge grief and suffering.
The amount is fixed by statute (currently £15,120). Only one award is made per death; if multiple claimants are eligible (eg, both parents), the award is shared equally. Children cannot claim for the death of a parent under this head.
Funeral Expenses
Reasonable funeral expenses can be claimed by dependants if they paid for them (otherwise, claimed by the estate under the 1934 Act).
Worked Example 1.1
Scenario: Ahmed, aged 40, was severely injured in a road traffic accident caused by Beth's negligence. He died from his injuries one week later. Before his death, he incurred £1,000 in medical expenses and suffered significant pain. He earned £30,000 net per year. He is survived by his wife, Chloe, and their 10-year-old son, David. Ahmed paid all household bills and gave Chloe £800 per month for housekeeping. Chloe paid the funeral costs of £4,000.
Question: What claims can be brought following Ahmed's death?
Answer: Two claims can be brought:
- Estate Claim (under LR(MP)A 1934): Ahmed's estate (represented by his personal representatives, likely Chloe) can claim for:
- Pain and suffering endured by Ahmed in the week before death.
- Medical expenses (£1,000).
- Loss of earnings for that week.
- Dependants' Claim (under FAA 1976): Brought by Chloe on behalf of herself and David:
- Loss of Dependency: For Chloe and David, based on the financial support and services Ahmed provided. The calculation would use the multiplier/multiplicand method, considering Ahmed's net earnings (less his personal expenditure) and the expected duration of dependency for Chloe and David.
- Bereavement Award: Chloe is entitled to the statutory fixed sum (£15,120). David is not eligible.
- Funeral Expenses: Chloe can claim the £4,000 she paid.
Worked Example 1.2
Scenario: Priya is injured in a workplace accident due to her employer's negligence. She breaks her arm, causing significant pain and requiring six weeks off work. Her net weekly wage is £400. She also misses a pre-booked, non-refundable holiday costing £500. She attends physiotherapy sessions costing £30 per session for 10 sessions.
Question: Identify Priya's potential heads of damage.
Answer: Priya can potentially claim for:
- Non-Pecuniary Loss (General Damages): Pain, suffering, and loss of amenity resulting from the broken arm.
- Pecuniary Loss (Special Damages):
- Past loss of earnings: 6 weeks x £400 = £2,400.
- Cost of wasted holiday: £500 (consequential financial loss).
- Physiotherapy costs: 10 sessions x £30 = £300.
Exam Warning
Do not confuse the claims available under the Law Reform (Miscellaneous Provisions) Act 1934 and the Fatal Accidents Act 1976. The 1934 Act deals with the survival of the deceased's own claim for losses up to death, brought by the estate. The 1976 Act creates a new cause of action for specified dependants for losses arising from the death. Ensure you identify the correct Act and claimant(s) for each head of damage in fatal accident scenarios.
Key Point Checklist
This article has covered the following key knowledge points:
- The aim of compensatory damages in tort is restitution (restitutio in integrum).
- Damages are categorised as pecuniary (quantifiable financial loss) and non-pecuniary (pain, suffering, loss of amenity).
- Special damages cover quantifiable pre-trial losses; general damages cover non-quantifiable losses and future losses.
- For personal injury, non-pecuniary damages compensate for PSLA; pecuniary damages cover expenses and lost earnings (past and future).
- Future pecuniary losses are calculated using the multiplier/multiplicand method, adjusted by the discount rate.
- The Law Reform (Miscellaneous Provisions) Act 1934 allows the deceased's estate to claim for losses suffered up to the date of death.
- The Fatal Accidents Act 1976 allows dependants to claim for loss of dependency and provides a statutory bereavement award for specific relatives.
- Claimants must mitigate their losses, and damages may be reduced for contributory negligence.
Key Terms and Concepts
- Pecuniary damages
- Non-pecuniary damages
- General damages
- Special damages
- Multiplier
- Multiplicand
- Discount rate
- Bereavement award
- Loss of dependency
