COMPENSATION VERSUS PUNISHMENT IN DAMAGES AWARDS
| Date | 01 November 1965 |
| DOI | http://doi.org/10.1111/j.1468-2230.1965.tb02791.x |
| Author | Harvey McGregor |
| Published date | 01 November 1965 |
THE
MODERN
LAW
REVIEW
Volume
28
November
1965
No.
6
COMPENSATION VERSUS PUNISHMENT
IN
DAMAGES AWARDS
THAT
the object of an award of damages is to compensate the
plaintiff
for
his
loss
and not to punish the defendant for his wrong-
doing is
a
modern notion. In an earlier age the separation
of
compensation and punishment was not
so
clear-cut, but as tort
gradually became weaned away from crime and as, much later, the
idea
of
no liability without fault became undermined by principles
of strict liability,
so
the idea that damages might be based on
punishment
as
well
as
compensation waned. These have
appeared particularly in actions arising out
of
personal injury and
wrongful death, where assessments of damages have tended to turn
a blind eye
(1)
to the collateral benefits conferred upon the victim
by third parties and
(2)
to the fact that the victim’s life has been
extinguished, cut down
or
rendered unconscious by the defendant’s
act.
It
is proposed to examine these two central illustrations
of
the tension between compensation and punishment today, and to
show that the modern cases clearly suggest that the penal principle
is losing its final footholds in the law
of
damages and is near
to
final extinction.
Yet lingerings of this idea remain even today.
I.
THE
WANING
OF
THE
CONCEPT
OF
‘‘
MATTERS
COMPLETELY COLLATERAL
)’
There was until recently general acceptance of the rule that the
damages to be awarded against
a
defendant in an action
for
personal
injuries were not to be reduced because part of the plaintiff’s loss
had been recouped by reason of benefits conferred upon him
by
third parties with whom the defendant had nothing to do. Such
benefits were described as
‘‘
matters completely collateral,” as
‘‘
res
inter
alios acta
))
or
as too remote to be brought into con-
sideration. However the essential weakness of this position is that
it ignores the fact that the plaintiff is being overcompensated.
A
decade ago the House of Lords in
British
Transport
Commission
V.
629
VO~..
za
!22
630
THE
MODERN
LAW
REVIEW
VOL
28
Gourley
only today that the full force of that decision is being felt.
set in motion the process of erosion of the rule, but
it
is
1
The courts had first adopted the rule that collateral benefits should
be left out
of
account as early as
1874
in
Bradburn
v.
G.W.
RY.,~
where the benefit received by the plaintiff consisted of the moneys
paid him by his insurance company under an accident insurance
policy which he had taken out. Similarly, no deduction was made
from the damages by reason of pension moneys paid to the plaintiff
in
Payne
v.
Railway Executive.s
As
to social insurance under the
National Insurance Acts,
1946,
there
is
of course
a
specific provision
for deduction, but only of half of the benefits receivable for five
years.4 Unemployment benefit is however omitted from the statu-
tory provision, and although
it
was deducted in full in
Lindstedt
v.
Wimbomte
S.S.
CO.~
the decision had been criticised.e These cases
dealt with benefits conferred as of right; there was also similar
authority in the case of benefits gratuitously conferred. Thus no
deduction was made in
Liflen
V.
Watson
in respect of free board
and lodging provided to the plaintiff by her father, in
Redpath
v.
Belfast
Si.
County Down
RY.~
in respect of charitable donations paid
from
a rail disaster fund,
or
in
Roach
v.
Yates
in respect of
gratuitous nursing attendance rendered the plaintiff by his wife
and sister-in-law. And in addition to refusing to take into account
such benefits, the courts also refused to take into account,
so
as to
reduce the damages awarded for loss of earnings, the income tax
which would have been payable on those earnings: as with col-
lateral benefits,
so
with collateral liabilities. This was decided by
the Court
of
Appeal in
Billingham
v.
Hughes.lo
Now much
of
this has been changed by the decision in
Gourley
that, in an action for damages for personal injuries tortiously
inflicted, the calculation of the plaintiff's damages in respect of his
loss
of earnings, both past and prospective at the time of trial,
must take into account the tax which would have been payable
upon them.
Billingham
v.
Hughes
lo
of course fell with the decision
in
Gourley
itself, but none of the other cases was directly called in
question and at first it looked as if the decision might only affect
the tax issue itself. This was particularly true as
Gourley
dealt
with a collateral liability from which the plaintiff was spared rather
than with a collateral benefit
of
which he was the recipient, which
1
19561
AX.
185.
2
11874)
L.R.
10
Ex.
1
8
[1952]
1
K.B. 26
(C.A.).
4
8.
2
(1)
of
the
Law
Reform (Personal Injuries)
Act,
1948.
5
(1949)
83
LI.TJ.R.
19.
6
See
Kemp
and
Kemp.
The Quantum
of
Damages in Personal Injury Claims
7
j1940
1
K.B.
556
(C.A.).
8
[1947]
N.I.
187.
Q
[1938] 1
K.B.
256
(C.A.).
10
119491
1
K.B.
643
(C.A.).
(2nd
ed.,
1961)
pp,
85-86.
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