Damages Flashcards
Exaggeration and confusion about compensation. What is the average payment?
£5,000
What is the aim of damages?
To put the claimant back in his pre tort position.
What are the 2 types of heads of damage?
Special - precisely quantifiable at trial/settlement. Past loss of earnings, cost of cares… Must be specially pleaded
General - naturally arising but not precisely quantifiable. Split into
A) future loss of earnings and
B) non pecuniary loss
What factors do the court take into account when calculating NP loss?
Intensity of pain- thin skull rule applies (Mullins v grey)
Level of insight - if in permanent vegetative state full for loss of earnings but none for pain - west v shepherd
Age - LC argues should be irrelevant
Reduced life expectancy
Pre injuries hobbies
Offset damages for pre existing condition
Failure to mitigate loss
Loss of marriage prospects
Gender
Circumstances of injury
Are wealth and ability to use damages taken into account?
No
In practice what are judges more likely to look at with NP losses calculation?
Previous settlements
Court judgement and reference books
(Kemp Kemp. Quantum of damages)
What 3 conceptual tools are used to calculate future pecuniary loss?
Are they effective?
Seemingly accurate but in practice artificial and uncertain.
Multiplicand (net annual loss)
Multiplier (number of yrs loss)
Discount rate (reduction to allow for investment)
What has the discount rate been changed to?
Originally 4.5%
Wells v Wells - lords moved to 3%
Damages act 1996 changed to 2%
What are the 2 forms of damages?
Structured settlements and lump sum payments.
What are the principles behind, and advantages of the lump sum settlement?
Protects the courts and lessens obligation on D (Fetter v Beale)
Deals with most claims (future financial loss only effects 7% cases)
Assists rehab of C
Offers greater financial freedom
What C wants
Closes insurer’s file
What are disadvantages of a lump sum?
Do not return c to pre accident position
More easily dissipated - inflation/fecklessness
Adds to costs and delays payments
Based on predictions and assumptions
Real return of 2.5% unlikely.
‘Only one certainty. The future will prove the award to be either too high or too low’ scarman in Lim’s case.
What are the problems introducing periodical payment orders?
General economic circumstances change
Medical condition changes
C’s own circumstances change
When can interim damages be paid?
When C is waiting trial and D has admitted liability.
How were structured settlements agreed pre 2005?
Out of court agreement to pay by instalments. Either self funded by D or annuity purchase by D with lump sum.
What are PPOs?
Periodical payment orders, a form of structured settlement which pays in instalments rather than lump sums
Can the court impose a PPO?
Yes. From 2005, removes veto from parties. Only for cases that reach court
What did the president of association of PI lawyers say about the court’s new power of granting PPOs?
‘The most important development ever relating to the law of damages.’
What must the court do under The Courts Act 2003?
Consider periodical payments in all cases of future pecuniary loss and consider them for other losses but only in parties consent.
What factors affect whether court makes a PPO?
Size of award
Claimant’s wishes
Claimant’a yearly needs - bottom up approach
Would pension be enough?
What are some of the results of the Courts Act 2003?
No need for courts to establish lump sum value of pension. D is forced to accept risk of uncertainty. Liability insurer’s find purchase of annuities to find PPOs is expensive.
What are the advantages of PPOs and structured settlements for claimants?
Closer return to pre accident position Security against life ex risk Investment security Tax free continuing income Security against loss by fecklessness
What are the disadvantages of PPOs for claimants?
May be less if premature death
Lower return than lump sum possible
Loss of freedom
What are the Criticisms of the changes to PPOs?
Reform too limited
No coherent policy for compensating disabled.
