8: Entitlement to damages

Question 1

What is meant by statutory interest?

Answer 1

A rate of interest prescribed by legislation, often 8% per annum under the Senior Courts Act 1981.

Question 2

Where does the court’s discretion arise from?

Answer 2

From s35A SCA 1981 for High Court Claims and s69 County Courts Act 1984 for County Court claims, both usually providing an 8% per annum rate.

Question 3

What is another piece of legislation related to statutory interest?

Answer 3

The Late Payment of Commercial Debts (Interest) Act 1998, applicable to commercial debts.

Question 4

Can the court refuse statutory interest if there has been a delay?

Answer 4

Yes, the court can refuse if there has been an unreasonable delay in bringing the claim to court.

Question 5

What is the purpose of damages/an award in tort?

Answer 5

To put the claimant in the position they would have been in if not for the tort.

Question 6

In which document do you make it clear whether you are seeking interest on any amounts awarded by the court?

Answer 6

The particulars of claim.

Question 7

What must be pleaded about the claimant’s physical injuries?

Answer 7

Information on the age of the claimant, effect of the injury, and a medical report substantiating all injuries.

Question 8

How is the medical report classified in terms of evidence?

Answer 8

As expert evidence.

Question 9

What is the main type of award for general damages?

Answer 9

Pain, suffering, and loss of amenity;

Question 10

How will the court assess the level of these damages?

Answer 10

Based on the medical report and claimant’s witness evidence, using Judicial College Guidelines.

Question 11

What time period does the loss of future earnings head cover?

Answer 11

The loss of earnings likely to be suffered from the trial date to retirement.

Question 12

What is a multiplicand?

Answer 12

The claimant’s annual loss, including income increases and career progression.

Question 13

What is the multiplier?

Answer 13

A figure from the Ogden Tables, adjusted for accelerated receipt and mortality.

Question 14

What is the basis of the loss of earning capacity head of damages?

Answer 14

Compensation for disadvantage in the labour market due to injuries, even without actual loss of earnings. (Smith v Manchester)

Question 15

What does loss of congenial employment compensate for?

Answer 15

Loss of enjoyment of the job, particularly for vocations like firemen, nurses, and police officers.

Question 16

What do future expenses cover?

Answer 16

Expenses likely to be incurred after the trial, such as medical care and maintenance.

Question 17

When might provisional damages be necessary?

Answer 17

When there is a chance of disease development or deterioration in the claimant’s condition.

Question 18

What are special damages?

Answer 18

Pecuniary (financial) losses suffered from the accident date until the trial date, aimed at reimbursement.

Question 19

What third-party losses and expenses can be claimed?

Answer 19

Expenses incurred by third parties (carers), such as travel for hospital visits and services provided to the claimant.

Question 20

Can a claimant claim private medical treatment form even though it is free on the NHS?

Answer 20

Yes, they can.

Question 21

Can the cost of nursing care be claimed?

Answer 21

Yes, e.g. reasonable expenses and value of wages reasonably foregone.

Question 22

When must the court award interest on personal injury damages?

Answer 22

When the damages awarded exceed £200.

Question 23

What are the interest rates on different types of damages?

Answer 23

Special damages: half the court’s special account rate (0.625%) from the date of the accident to trial;

General damages: 2% per annum from the date the claim form is issued;

Future loss: No interest.

Question 24

Do claimants have to mitigate their losses in contract and tort cases?

Answer 24

Claimants must take reasonable steps to minimize their loss. The burden of proof is on the defendant to show the claimant failed to mitigate their losses.

Question 25

When is there an entitlement to claim interest before proceedings are issued?

Answer 25

Only if there is a specific contractual clause providing for interest or if the Late Payment of Commercial Debts (Interest) Act 1998 applies (at 8% above the base rate).

Question 26

What are the types of interest entitlement after proceedings are issued up to judgment?

Answer 26

Under an express contractual provision;
Under an implied contractual provision;
By virtue of the court’s discretion to award interest.

Question 27

How is the amount of interest due calculated?

Answer 27

Amount of claim x (Number of days / 365) x (Interest rate / 100);

Round up all figures to two decimal places.

Question 28

Under which laws can interest be claimed if there is no contractual provision for interest?

Answer 28

SCA 1981
CCA 1984
Late Payment of Commercial Debts (Interest) Act 1998

Question 29

What does the LPCD(I)A 1998 apply to?

Answer 29

Debts incurred in the course of business. Creditors can claim for reasonable costs incurred in recovering the debt if the debtor did not pay on time;

Question 30

Under LPCD(I)A 1998, how long do businesses and public authorities have to pay?

Answer 30

Businesses have 60 days to pay, extendable by agreement;

Public authorities have 30 days to pay with no negotiation for longer periods;

Question 31

What are the fixed penalty charges under LPCD(I)A 1998?

Answer 31

Fixed penalty charges:

£40 for debts up to £999.99,

£70 for debts £1,000-£9,999,

£100 for debts £10,000 or more.

Question 32

What is the interest rate under LPCD(I)A 1998?

Answer 32

The Bank of England base rate for the period during which the debt falls due plus 8 percent.

Question 33

What is the difference between the interest rate of the County and Senior Courts Acts and the Late Payments rate?

Answer 33

County/Senior: 8% per year

Late Payments: Base rate PLUS 8%