State‐Financed Benefits In Personal Injury Cases
| DOI | http://doi.org/10.1111/j.1468-2230.1974.tb02382.x |
| Published date | 01 May 1974 |
| Date | 01 May 1974 |
STATE-FINANCED BENEFITS IN
PERSONAL INJURY CASES
THE
increase of state-financed assistance to the less fortunate over
the last twenty-five years has led to a proliferation in the number
of benefits available. At the same time the value to beneficiaries
has been increased substantially in real money terms. One major
category of beneficiary is those who suffer physical
or
financial
injury as
a
result
of
an accident. Yet the older form of state
assistance to those whose injuries can be proved to be wholly
or
partly the legal responsibility of another has
so
far remained.
Accident victims therefore may have available two methods of
meeting a loss, benefits and damages. Superficially, there is there-
fore an overlap.
This potential for overlap raises an immediate problem. Should
the administrators of either system bear in mind the possibility
of
receipt of benefit from the other
?
If
so,
to what extent and on what
principles should any set-off occur
?
The answers, in the absence
of
rules provided by Parliament, have been for the courts to seek.
This has proved difficult. The problem is accentuated by frequent
changes in the various benefits payable. The approach of most
post-war governments has been piecemeal, and changes sometimes
take
a
time to work their way into the system.8 But at basis the
difficulty is due to the inability of judges to agree a starting point,
This itself is hardly surprising when Parliament has found it almost
impossible to reach any conclusion and, perhaps for this reason, has
remained largely silent.' Indeed, the partial interference of Parlia-
ment
so
far has served only to confuse, by imposing an answer not
open to the courts. Forced to adopt an all-or-nothing approach,
judges have found themselves choosing what might be termed the
1
This article concentrates
on
recppt changes in this field. For further discussion
of
earlier decisions,
see:
Ganz,
Mitiqtion
of
Damages by Benefit!,Received
"
(1062)
2.5
M.L.R.
559,
and
Atiyab, (10G9)
32
M.L.R. 397, and
Accidents, Compensation,pnd
the
Law,
chap.
18.
See
also
Cooper,,," A Collateral Benefits Principle (1971) Can. Bar Rev.
5.01,
and
Casey, Damages and Social Security Benefits-Recent Developments
"
[lo721
Juridical Review
22.
2
That
tort is
a
state system is often overlooked. Yet not
only
are the
rules,
the
adminietrators and the enforcement agency state-provided,
so
are criminal
laws
to ensure that defendants can pay,
legal
aid to ensure plaintiffs can pay
and, in one case, the defendant itself.
3
See,
e.g.
Lord Reid's references to supplementary benefit, enacted in 10G6,
as
national assistance
in
19G9 in
Parry
v.
Cleaver.
4
This silence means that the tort system, not the
state
system, must solve the
problem
of
overlap.
An
exception to
this
(though not to Parliament's silence)
ie
the Criminal Injuries Compensation Scheme.
If
tort damages are recovered
no
claim is allowed under the scheme, and
any
award must be repaid.
Collateral Benefits Again
281
282
THE MODERN LAW REVIEW
VOL.
37
"
humanitarian
"
approach of ignoring all benefits,
or
the alterna-
tive
"
economic
"
approach of counting all benefit
so
as
to tivoid
overlap.
In this article, some suggested rules and principles for solving
this quandary are examined in the light of the great variety
of
benefits with which the courts are
or
may shortly be confronted.
RELEVANT
BENEFITS
Industrial Injuries Benefits
Under the National Insurance (Industrial Injuries) Act
1065
an
employee who suffers an accident arising out of
or
in the course of
employment may receive industrial injury benefit
or
industrial
dis-
ablement benefit 5
or
both
to
compensate for actual
or
assumed
loss.
If
disablement benefit is claimed, the claimant may be entitled
to additional allowances to supplement the benefit, of the following
types
:
hospital treatment allowance, unemployability supplement,
constant attendance allowance, special hardship allowance.e At the
same time, of course, the employer may well be liable in damages
for the accident, and must be insured to cover such liability.
Potential overlap between the systems was foreseen early on, and,
after consultations,* resulted in the enactment of section
2
of the
Law Reform (Personal Injuries) Act
1948.8
Under this section, one
half of the total value of either
or
both of these forms of benefit
accruing over a period of five years from the time the cause of
action accrued are to be taken into account against loss of earnings
or
profits.a Any payment of constant attendance allowance is to be
ignored.1°
The basis of the
1048
Act was expediency. The proportion that
became deductible was based on the consideration that the employer
and employee contributed in roughly equal proportions to the state
fund. The five-year limit was a
"
shot in the dark."
11
Both relied
on the fact that the courts
''
do not say
so
much is for pain and suffering, so much is for
loss
of
earnings,
so
much is for special expenses incurred. They
take these matters into account in a broad way in coming to a
conclusion as to what is a fair amount, and then give a lump
sum
without breaking it down into specific items."
12
Both rely therefore on assumptions that are no longer valid.lS
5
8.
5.
7
Through the Denartmental Committee
on
6
88.
13-16.
Alternative Remedies
11946)
Cmd.
>I
GSGO.
-
*
ITereinafter called the
1948
Act.
9
8.
2 (1).
10
8.
2
l(2).
11
Per
Lord
Simon,
152
H.L.Deb. col.
1199.
12
Per
Sir Hartley Shawcross, Att.-Gem,
449
H.C.Deb. col.
2170.
13
Nevertheless
the
Law Commission
in
its working paper
no.
41
on
peraond
injories damages suggested
an
extension, retracting it
in
the light
of
corn
To continue reading
Request your trial