Damages
a. Introduction
Purpose of compensatory damages
o Livingstone: Damages is intended to put C in the position he would have been if he had
not sustained the wrong
Possible tort actions
o Action by living claimant
o Action by administrator of deceased claimant’s estate suing in deceased claimant’s
name Law Reform (Miscellaneous Provisions) Act 1934, s.1(2)
o Action by dependants of deceased suing in their own names, but their action is also
derivative Fatal Accidents Act 1976
b. Damages for Personal Injury
2 component
o Pecuniary loss (financial)
o Non-pecuniary loss
ci. Pecuniary Loss
Pre-trial pecuniary loss is recoverable in full, but future pecuniary loss is uncertain
Can be given in a lump sum or periodic payments
cii. Lump Sum
Payment includes compensation for both losses already suffered + losses expected in the
future
Use the multiplier x multiplicand to calculate future loss
o Multiplier: Number of years the loss will continue
o Multiplicand: Annual loss (net of deductions) C will suffer
Factors to consider in calculating lump sum
o Vicissitudes of life
o Acceleration element
o Inflation
o ‘Lost years’
ciii. Vicissitudes of Life
Deduction to account for the fact that unfortunate situation may still have occurred even if
D did not commit tort
, Damages
Jobling
o D negligently injured C C got an unrelated illness that would have prevented him
from working anyway
o Held that C was only entitled to recover damages up to the date that his illness took
effect
civ. Acceleration Element
Wells v Wells
If C receives all of damages early may be able to invest it and gain interest risk of
overcompensating C deduction accounts for this
cv. Inflation
recourse to Damages Act 1996 s1; assumed that claimants invest very cautiously
Wells v Wells
Inflation causes the real value of money to fall risk of undercompensating
Court held that damages should be calculated on the assumption that C will invest any
damages they do not need immediately in index-linked government securities (which
would protect their investment against inflation + give interest) confirmed in s.1
Damages Act 1996
cvi. ‘Lost Years’
If the tort has decreased life expectancy C can claim for the loss of years where they
could have been earning money
Pickett
o C got illness while working for D had life expectancy of a year
o Held that C could claim for damages for the lost years calculated the lost years by
looking at his life expectancy ‘but for’ the tort
d. Periodic Payments
Criticism of lump sum system by Lord Chancellor’s Department
o Hard to predict C’s life expectancy C is likely to be over or undercompensated
o Lump sums can grant C a false sense of security/pressurise them to invest it
o Periodical payments offer a guaranteed income and claimants will know exactly
how much they are going to receive and when, without the need for expensive
investment advice
o Better reflects the purpose of compensation to restore the claimant’s prior position,
and place the risks associated with life expectancy and investment on D rather than
C
a. Introduction
Purpose of compensatory damages
o Livingstone: Damages is intended to put C in the position he would have been if he had
not sustained the wrong
Possible tort actions
o Action by living claimant
o Action by administrator of deceased claimant’s estate suing in deceased claimant’s
name Law Reform (Miscellaneous Provisions) Act 1934, s.1(2)
o Action by dependants of deceased suing in their own names, but their action is also
derivative Fatal Accidents Act 1976
b. Damages for Personal Injury
2 component
o Pecuniary loss (financial)
o Non-pecuniary loss
ci. Pecuniary Loss
Pre-trial pecuniary loss is recoverable in full, but future pecuniary loss is uncertain
Can be given in a lump sum or periodic payments
cii. Lump Sum
Payment includes compensation for both losses already suffered + losses expected in the
future
Use the multiplier x multiplicand to calculate future loss
o Multiplier: Number of years the loss will continue
o Multiplicand: Annual loss (net of deductions) C will suffer
Factors to consider in calculating lump sum
o Vicissitudes of life
o Acceleration element
o Inflation
o ‘Lost years’
ciii. Vicissitudes of Life
Deduction to account for the fact that unfortunate situation may still have occurred even if
D did not commit tort
, Damages
Jobling
o D negligently injured C C got an unrelated illness that would have prevented him
from working anyway
o Held that C was only entitled to recover damages up to the date that his illness took
effect
civ. Acceleration Element
Wells v Wells
If C receives all of damages early may be able to invest it and gain interest risk of
overcompensating C deduction accounts for this
cv. Inflation
recourse to Damages Act 1996 s1; assumed that claimants invest very cautiously
Wells v Wells
Inflation causes the real value of money to fall risk of undercompensating
Court held that damages should be calculated on the assumption that C will invest any
damages they do not need immediately in index-linked government securities (which
would protect their investment against inflation + give interest) confirmed in s.1
Damages Act 1996
cvi. ‘Lost Years’
If the tort has decreased life expectancy C can claim for the loss of years where they
could have been earning money
Pickett
o C got illness while working for D had life expectancy of a year
o Held that C could claim for damages for the lost years calculated the lost years by
looking at his life expectancy ‘but for’ the tort
d. Periodic Payments
Criticism of lump sum system by Lord Chancellor’s Department
o Hard to predict C’s life expectancy C is likely to be over or undercompensated
o Lump sums can grant C a false sense of security/pressurise them to invest it
o Periodical payments offer a guaranteed income and claimants will know exactly
how much they are going to receive and when, without the need for expensive
investment advice
o Better reflects the purpose of compensation to restore the claimant’s prior position,
and place the risks associated with life expectancy and investment on D rather than
C
