2B.7.1 Compensatory damages

Question 1

What are the remedies in tort?

Answer 1

• Compensatory damages
• Injunctions

Question 2

Compensatory damages

Answer 2

In a tort claim, the court can award a successful claimant compensation for the injuries they have suffered and/or damage to their property. This award is known as compensatory damages.

Question 3

Aim of compensatory damages

Answer 3

To put the claimant back in the position they were in before the tort occurred (restitutio in integrum).

Question 4

Restitutio in integrum

Answer 4

To put the claimant back in the position they were in before the tort occurred

Question 5

Pecuniary loss

Answer 5

A loss that can be easily calculated in monetary terms, such as the cost of:
* Hiring a car while the claimant’s own car is being repaired
* Fares getting to and from hospital for treatment.

Question 6

Non-pecuniary loss

Answer 6

A loss that is not wholly money-based and not strictly quantifiable. This can include, for example:
* Pain and suffering as a result of the accident
* Loss of amenity or a change in lifestyle, such as not being able to play a sport.

Question 7

Types of compensatory damages

Answer 7

• Special damages
• General damages

Question 8

Special damages

Answer 8

Amounts which can be calculated specifically up to the date of the trial of settlements. In other words, they are the pecuniary loss. This could include, for example:
* Vehicle repairs and the hire of a replacement vehicle
* Any loss of earnings while recovering from the accident
* The cost of any medical treatment such as physiotherapy if this is not otherwise available on the NHS.

Question 9

General damages

Answer 9

Non-pecuniary losses and are looking forward from the trial or settlement date. They can include:
* An amount for pain and suffering
* Loss of amenity
* Future loss of earnings
* Future medial expenses, including adapting a house or car to be suitable for a severely injured person and paying for the specialist care.

Question 10

How are general damages calculated?

Answer 10

General damages are speculative and evidence will have to be obtained to support the claim. This will include medical evidence of the effect of the accident on the victim and how long the suffering or injuries will take to heal, if at all.

For future loss of earnings and future medical expenses, there has to be an annual calculation of the loss, multiplied by the number of years of the loss. For example, give years’ loss of earnings at £25,000 each year will lead to a total loss of earnings of £125,000.

Question 11

Nominal damages

Answer 11

Awarded where no actual damage or loss suffered but the tort has taken place.

Question 12

Ways of paying compensatory damages

Answer 12

• Lump sums
• Structured settlement

Question 13

Lump sums

Answer 13

A once-only award. The claimant cannot come back to the court to say that they have exhausted the damages received.

Question 14

Structured settlement

Answer 14

The Damages Act 1996 states:
- Parties who settle a claim agree that all/part of the damages can be paid as periodical payments.

It can be for life or a set period, and the amount can be reassessed at intervals.

Question 15

Which act established structured settlements?

Answer 15

The Damages Act 1996

Question 16

How do structured settlements work?

Answer 16

The defendant (or more likely, their insurer), will purchase an annuity through a financial company, who then pays a set amount at regular intervals to the claimant.

Question 17

Advantages of structured settlements

Answer 17

It will protect the claimant whose condition may become worse (as payments are regularly reassessed).
You could argue this is fairer for the defendant because they only have to pay it whilst the claimant’s condition requires it.

Question 18

Why might a lump sum be unfair to the claimant?

Answer 18

The claimant’s condition in future might become worse.

Where a large award is made for medical expenses, there is the problem of inflation.

To deal with these problems, structured settlements were put into place (periodic payments over a set period of time).

Question 19

Why might a lump sum be unfair to the defendant?

Answer 19

If the claimants condition improves considerably and there is no longer a need to pay for case.

In order to deal with these problems, structured settlements were put into place (periodic payments over a set period of time).

Question 20

Mitigation of loss

Answer 20

The claimant is entitled to be compensated for his loss, but he is under a duty to keep the loss to a reasonable level.

Question 21

Darbishire v Warran (1963)

Answer 21

Judge said “The claimant can be as extravagant as he pleases but not at the expense of the defendant.”

Question 22

Examples of mitigation of loss

Answer 22

• While the claimant’s Ford car is being repaired, the cost of hiring a Bentley cannot be claimed as a replacement.
• The cost of private healthcare cannot be claimed if the treatment is available on the NHS.

Question 23

How might mitigation of loss apply to property damage?

Answer 23

The cost of repairing like-for-like can be claimed, but not a more expensive or extensive repair.

Question 24

Cases where the court penalised the claimant for failure to mitigate their loss

Answer 24

• Darbishire v Warran (1963)
• Marcroft v Scruttons (1954)

Question 25

Marcroft v Scruttons (1954)

Answer 25

The claimant was injured by the defendant’s negligence. He then refused to attend hospital and his injuries worsened. The claimant was unable to claim his losses after his refusal to attend hospital due to his refusal to mitigate loss.

Question 26

Give examples of how the claimant will be expected to mitigate the loss

Answer 26

• If the claimant can work part-time or at a lower wage, they will be expected to do so.
• The amount of this wage will be deducted from the award.