CONSULTATION ISSUES AND OPTIONS FOR REFORM

1. Fair compensation.
2. Consistency and uniformity.
3. Predictability.
4. Comprehensibility.
5. Workability and simplicity.

SHOULD DAMAGES FOR NON-PECUNIARY LOSS BE AVAILABLE AT ALL?

SHOULD ENGLISH LAW ADOPT THE CANADIAN 'FUNCTIONAL' APPROACH TO THE ASSESSMENT OF DAMAGES FOR NON-PECUNIARY LOSS?

1. Certain non-pecuniary damages would form part of the pecuniary loss, measurable in the cost of providing substitute pleasures, which places unacceptable evidential burden on plaintiff.
2. To assume that substitute pleasures can provide solace to a plaintiff is unrealistic. Still have to make up the loss of capacity to enjoy life that remains.
3. Requires the abandonment of tariff approach for non-pecuniary loss. Difficult to determine the reasonableness of what would provide solace.
4. Substitute pleasures cannot act as a solace for what has already been endured. Thus, damages in respect of pre-trial non-pecuniary loss would be precluded.
5. In Canada, where this approach is used, judges continued apply tariff approach to assessment, leading to inconsistency.

SHOULD A PLAINTIFF WHO IS UNAWARE OF HIS OR HER INJURY BE ENTITLED TO DAMAGES FOR NON-PECUNIARY LOSS?

The Commission takes the view that if the plaintiff is incapable of suffering it is arguable that non-pecuniary loss should be assessed subjectively. Such an approach would result in a nil award for non-pecuniary loss for a permanently unconscious plaintiff. Further, on present medical understanding, the law can take it as a fact that some plaintiffs are, and will remain, permanently unconscious.

A nil award may be said to be perverse, in that it is cheaper to injure someone more seriously than less seriously. However, it is compensation of the plaintiff that is in issue, not punishment of the defendant.

The Commission believes that any remedy for the grief of the plaintiff's dependants should be addressed directly and not disguised through an award to the plaintiff.

SHOULD THERE BE A THRESHOLD FOR THE RECOVERY OF DAMAGES FOR NON-PECUNIARY LOSS?

Reasons for imposing a threshold:

1. The cost of compensation: Minor injuries are over-compensated, especially for non-pecuniary loss. Research suggests litigation costs for minor injuries are disproportionate to the awards.
2. Evidential problems: In minor injuries most loss comprises of pain and suffering (subjective). A threshold for recovery "could ... serve as a demarcation between cases where there is some tangible evidence of injury and cases where there is none."
3. Triviality: Minor or transient losses ought to be tolerated not compensated. Reasons against introducing a threshold:
4. Litigation costs should be reduced through procedural reforms rather than alteration of common law principles.
5. May encourage claimants to exaggerate or prolong their symptoms to ensure that they satisfy the test.
6. Some injuries have little or no pecuniary loss - some wrongs go completely unremedied.
7. The first three months is the period when pain is most intense, therefore should not be excluded from damages.

WHAT SHOULD BE THE LEVEL OF DAMAGES FOR NON-PECUNIARY LOSS?

High awards are thought to contribute to high insurance premiums. Other jurisdictions (whose damages are assessed by juries) have imposed judicial and legislative ceilings on awards for non-pecuniary loss.

Some consumer organisations claim that levels of compensation are too low. In 1988, one proposed a Compensation Advisory Board with the power to recommend new (hopefully higher) levels of award. Referred to:-

• views of plaintiffs and public at large.
• arguments of hidden costs in disability, at present not compensated.
• higher levels of compensation in claims for injury to reputation.

The National Consumer Council believes "that levels of damages are too low because those who fix them do not have the expertise to take into consideration all of the factors associated with the loss. Courts rely instead on precedents which were not adequate to begin with and are rarely reviewed. Settlements are influenced by the same inadequate precedents."

HAVE AWARDS FAILED TO KEEP PACE WITH INFLATION?

In Walker v John Mclean & Sons the Court of Appeal recognised awards by judges from 1973-1978 were lower in real terms than those made in the 1960's and early 1970's. The court indicated that £35,000 for March 1978 restored parity with earlier sums.

Using the RPI in Kemp and Kemp:

June 1994 update	£104,165
JSB Guidelines June 1994	£95,000 (maximum)

It would appear that awards have fallen slightly behind the inflationary rate since 1978. However, the central question is did Walker restore parity with the sums of the 1960s and early 1970s?

Third edition Kemp and Kemp :

average figure-paraplegia in 1967	£25,000
March 1967 update	£75,874
June 1994 update	£225,811

Before 1970:

No division into pecuniary and non-pecuniary and Kemp may include element for future pecuniary loss. However, in June 1963 a male paraplegic received a sum for non-pecuniary loss due to reduced life expectancy of ten years of £16,500

March 1978 update	£58,429
June 1994 update	£173,893

June 1971, Court of Appeal awarded a sum for non-pecuniary loss to a paraplegic for unusual and serious elements of £20,000

March 1978 update	£47,411
June 1994 update	£141,102

It appears that awards for paraplegia have failed to keep in pace with inflation and are not comparable to late 1960 and early 1970 awards.

Quadriplegia

In Housecroft v Burnett the Court of Appeal was asked to considered awards for quadriplegia in 1983 too low when compared with figures of late 1960s early 1970s. Courts view:-

1969/1970 not a true comparison because included items that now claimed separately as pecuniary loss.
1973/1978 not a true comparison (see reasons in Walker).

Conclusion:-
More recent awards a better guide:

JSB Guidelines April 1985	£75,000
June 1994	£114,502
JSB Guidelines June 1994	£105,000 to £125,000
This suggests that awards since 1985 have kept up with inflation, but compared with 1960/1970 did Housecroft guideline decrease conventional sum for injury? Kemp and Kemp:
Average sum 1967	£35,000
April 1985 update	£207,072
June 1994 update	£316,136
But for the reasons given in the last section, Kemp and Kemp may not be a proper basis for comparison. Therefore turn to specific awards (non- pecuniary loss approved by Court of Appeal pre 1973):-
Feb. 1970 dreadful case high award but not unfair	£25,000
April 1985 update	£131,639
June 1994 update	£200,972
Nov. 1970 young quadriplegic, life expectancy 10 years,
award not excessive	£20,000
April 1985 update	£99,611
June 1994 update	£152,076
In 1961 in Wise v Kaye, Diplock LJ expressed the view that £15,000 to £20,000 was maximum pecuniary award for a fully aware quadriplegic
April 1985 update	£107,950 to £143,933
June 1994 update	£164,806 to £219,742
These updated values are significantly higher than Housecroft or JSB Guidelines figures. Ignoring the courts criticism of awards between 1969 and 1970, the guideline figure in Housecroft decreased the conventional sum for this type of injury. Very severe brain injury For very severe brain damage including permanent unconsciousness:
June 1994 JSB Guidelines	£105,000 to £125,000
Wise v Kaye, Feb. 1961, Court of Appeal, a young woman permanently unconscious and completely unaware of surroundings awarded £15,000
June 1994 Update	£171,853
Wise v Shepherd, May 1962, House of Lords upheld award to woman severely disabled physically and mentally due to brain injury of £17,500
June 1994 update	£187,435

This is greater than current awards made for this injury as suggested by JSB Guidelines.

In Lim Poh Choo v Camden and Islington AHA, 1980, House of Lords considered cross appeal of award by Bristow J (Dec. 1977) of £20,000 to a woman of 36 who had suffered severe brain damage leaving her sentient but completely dependent on others and unable to appreciate her condition, with a life expectancy substantially the same as prior to the accident. Argued that sum too low as the values of awards in Wise and West updated to Dec. 1977 were £56,722 and £61,865 respectively. Appeal dismissed: Lord Scarman said that an award for pain, suffering and loss of amenities is dependent only in the most general way upon the movement in money values- provided that the sum is substantial in current money values, the updating requirement is met.

June 1994 update

£60,595

This is approximately half the amount that a plaintiff with similar injuries would expect to receive today. Thus the value is today greater in real terms than that implied by the House of Lords in 1977, but less than that awarded in the 1960s. To this extent the awards for non-pecuniary loss for this serious injury have failed to keep pace with inflation.

Conclusions

However, comparisons are very rough. Pre-1970 the courts rarely itemised awards for general damages. Any distinctions of non-pecuniary from other losses are so few that they cannot be regarded as truly representative of the going rate. Therefore, sums for non-pecuniary loss in the late 1960s may be misleadingly high. However, if we discount the awards for very serious injuries used above by 15% it would still show that awards from the late 1960s to the early 1970s have failed to keep up with the rate of inflation.

SHOULD ANY FORM OF LEGISLATIVE TARIFF BE INTRODUCED?

Fixed sum

Least discretionary, most certain form of tariff. Once injury categorised no room for reflecting. Fairly mechanical but a process of assessment that is relatively simple, speedy and inexpensive.

Upper and lower limits

This establishes a range for each category. Judge has discretion to select the figure most appropriate to the circumstances, but not permitted to depart from it. Similar to current system except currently this has been established by the judiciary and is more flexible in that they are not regarded as absolutely fixed.

Maximum/minimum sums.

Sets the limit on the non-pecuniary award for the particular category of injury. But judge has discretion to award any sum.

Average sums.

Specifies a single figure for each category. Permits a judicial discretion to make an award above or below the average sum giving the judge generous rein.

Assessment of proposals.

If a legislative tariff were to be introduced the real choice lies between fixed sums and one of upper an lower limits. Only these forms of tariff control and regulate judicial discretion in a way which would justify abandoning the present system. They promote more uniformity and consistency in awards. Yet, we consider a fixed sum tariff unacceptable because they eliminate judicial discretion altogether.

If a legislative tariff were to be introduced, one with upper and lower limits, coupled with a non-exhaustive list of relevant factors affecting the level of award, is favourable. This would give opportunity to reassess the level of award and the relative severity of the injuries. Advice could be widely sought, for example, from medical experts and lay people as well as lawyers. The tariff could be reviewed periodically by an advisory board.

IF A LEGISLATIVE TARIFF IS NOT INTRODUCED, SHOULD THE JUDICIARY BE ASSISTED IN FIXING THE AMOUNTS TO BE AWARDED FOR NON-PECUNIARY LOSS?

A Compensation Advisory Board

Arguments against:

• The government is unconvinced that compensation levels should be increased.
• The establishment of a Board may not improve assessment of damages.
• Possible hindrance to the speedy resolution of claims.
• Without a statutory duty increases would not be guaranteed.
• If a Compensatory Advisory Board were to be established:
  1. It should be chaired by a High Court Judge with experience of personal injury litigation and include representatives of medical and legal professions, bodies providing advice or services to injured or disabled persons, insurers, employers, trade unions and lay persons.
  2. It should have a duty to recommend levels of damages to the judiciary.
  3. It should be advisory only. A judge could depart from recommendations for good reasons which must be articulated and subject to review by an appellate court if it has failed to take account of the recommendations.
  4. Recommendations for awards should not be lower than the current levels, taking into account evidence that awards have failed to keep pace with inflation.
  5. Should produce a report recommending new levels within one year. Then meet annually for the first two years, thereafter once every three years.
  6. Automatic annual updating of new levels for inflation, by reference to the RPI.

Guinea-pig jury trials

The Commission is strongly opposed to this suggestion. Jury assessment is unpredictable and inconsistent. In Hennell v Ranaboldo, the Court of Appeal held it wrong for a judge to exercise discretion to order jury trial for the purpose of providing an example of the damages a jury would award.

Greater reliance on medical "scores"

Problems:

Computerised assistance

SHOULD INTEREST BE AWARDED ON DAMAGES FOR NON-PECUNIARY LOSS AND, IF SO, HOW MUCH INTEREST?

The Commission does not accept that the award of interest on non-pecuniary damages is unfair to defendants. Should interest be awarded only on pre-trial non-pecuniary loss?

It is difficult, although not impossible, to separate non-pecuniary into past and future loss. Some jurisdictions already make this separation (some Australian, and Scotland). However, in these jurisdictions the courts apply a higher rate of interest, running from an earlier date, than in England. Should the date of the service of the writ be the date from which interest is payable?

As loss can be continuing or occur later than the accident, it can be difficult to apply interest from date at which the loss occurred. Is the current 2 per cent rate satisfactory?

The Commission recommends that legislation be introduced requiring the courts to take account of the net rate of return taking index-linked government securities (ILGS) as a comparison.

SHOULD DAMAGES FOR NON-PECUNIARY LOSS SURVIVE THE DEATH OF THE VICTIM?

Should the survival of damages for non-pecuniary loss be excluded altogether?

1. Variable effects are unfair to injured persons and families.
2. The injured person may be unfairly deprived of his/her entitlement on death.
3. Victim may die after injury from unconnected causes.
4. Where death is likely, this could cause incentive for defendants to delay settlement.
5. Pressure on dying victims to settle quickly, perhaps for less.
6. It may exacerbate pre-death suffering.

In particular victims of industrial disease would be disadvantaged by a rule precluding the survival of damages for non-pecuniary loss. Should the survival of non-pecuniary loss be subject to conditions?

It is the Commissions view that such a rule ought not to be introduced.

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