Wells v Wells
| Jurisdiction | England & Wales |
| Judge | Lord Justice Hirst |
| Judgment Date | 23 October 1996 |
| Judgment citation (vLex) | [1996] EWCA Civ J1023-4 |
| Docket Number | QBENF 95/1117/C QBENF 96/0236/C |
| Court | Court of Appeal (Civil Division) |
| Date | 23 October 1996 |
[1996] EWCA Civ J1023-4
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
(HIS HONOUR JUDGE WILCOX)
(MR. JUSTICE COLLINS)
(MR. JUSTICE DYSON)
Royal Courts of Justice
Lord Justice Hirst
Lord Justice Auld
Lord Justice Thorpe
QBENF 95/1117/C
QBENF 96/0081/C
QBENF 96/0236/C
Case 1
and
Case 2
and
Case 3
CASE 1
MR. J. LEIGHTON-WILLIAMS Q.C. and MR. R. METHUEN (instructed by ITT London & Edinburgh Insurance, Legal Department 4, Worthing, Sussex) appeared on behalf of the Appellant/Defendants.
MR. C. PURCHAS Q.C. and MR. G. GADNEY (instructed by Messrs Waterson Hicks, London, EC3M 8AJ) appeared on behalf of the Respondent/Plaintiff.
CASE 2
MR. K. COONAN Q.C. and MISS C. LAMBERT (instructed by Messrs Hempsons, London, WC2E 8NH) appeared on behalf of the Appellant/Defendant.
MR. R. OWEN Q.C. and MR. P. HAVERS Q.C. (instructed by Messrs Compton Carr, London, EC1N 2JT) appeared on behalf of the Respondent/Plaintiff.
CASE 3
MR. J. LEIGHTON-WILLIAMS Q.C. and MR. R. METHUEN (instructed by Messrs Lawrence Graham, London, WC2R 1JN) appeared on behalf of the Appellant/Defendant.
MR. C. PURCHAS Q.C. and MR. M. KELLY (instructed by Messrs Russell Jones & Walker, London, WC1X 8DX) appeared on behalf of the Respondent/Plaintiff.
| INDEX | ||
| INTRODUCTION | Pages 2–5 | |
| PART I | The General Point of Principle | Pages 6–48 |
| PART II | The Individual Cases: | |
| WELLS v WELLS | Pages 49–78 | |
| Pages 78–100 | ||
| PAGE v SHEERNESS STEEL | Pages 100–112 | |
| APPENDIX | Pages 113–125 |
INTRODUCTION
These three appeals raise matters of considerable importance concerning the assessment of damages for anticipated future losses and expenses in personal injuries litigation. This is the judgment of the court, to which we have each contributed.
All three cases are tragic ones, and nothing we say in this judgment in any way diminishes their inherent gravity.
Mrs Thelma Wells, then aged nearly 58, sustained very grievous head injuries in a road accident in which her husband, the appellant, was the driver, and for which he admitted liability. She was awarded approximately £1.619m by Judge Wilcox sitting as a Deputy Judge of the High Court on 13th June 1995.
James Thomas was born suffering from cerebral palsy in the Royal Sussex County Hospital, which is under the aegis of the Brighton Health Authority, who admitted liability for maladministration of a drug to his mother, during labour. He is now aged 7 and was awarded approximately £1.285m by Collins J on 7th November 1995.
Mr Kelvin Page, then aged 28, suffered brain damage as a result of an accident at work when in the employment of Sheerness Steel plc, who admitted liability. He was awarded approximately £906,000 damages by Dyson J on 4th December 1995.
The respective appellants appeal against the quantum of damages awarded. The three cases are reported successively starting at 1996 PIQR page Q26.
Each appeal raises detailed questions in relation to individual items of assessment, with which we will deal in Part II of this judgment, where we set out in greater detail the individual circumstances of each case. There are also a number of similar detailed issues raised by respondents' notices on behalf of each respondent.
However, over-arching all three cases is a general point of principle as to the appropriate multiplier to be applied to the annual amount assessed for future losses and expenses (the multiplicand). In each case the judge, having heard expert evidence from both sides, departed from the well-established conventional approach of awarding a multiplier consistent with a return of 4–5% per annum on the capital sum, and fixed the multiplier by reference to the return on Index Linked Government Securities (ILGS) at 3% per annum, with the result that the multiplier was very significantly higher, and the damages greatly increased.
During the same period, the same point arose in a number of similar cases, but the judges declined to apply the ILGS multiplier and adhered to the conventional guidelines. As a result the law on this point has been thrown into the melting pot, with the very severe consequence that there is presently a stalemate in major personal injuries claims due to uncertainty as to the appropriate multiplier.
The adoption of the ILGS yardstick followed the recommendations of the Ogden Working Party (2nd Edition November 1993) and of the Law Commission Report No 224 (September 1994), to both of which we refer in detail below.
The Damages Act 1996 received the Royal Assent on 24th July 1996. In the debates during the passage of the Bill through the House of Lords, the Lord Chancellor stated that he awaits the outcome of this appeal, both in relation to the exercise of his powers under section 1 of the Act, and also in connection with the implementation of section 10 of the Civil Evidence Act 1995, which is not yet in force.
Section 1 of the 1996 Act provides:
"1(1) In determining the return to be expected from the investment of a sum awarded as damages for future pecuniary loss in an action for personal injury the court shall, subject to and in accordance with rules of court made for the purposes of this section, take into account such rate of return (if any) as may from time to time be prescribed by an order made by the Lord Chancellor.
(2) Subsection (1) above shall not however prevent the court taking a different rate of return into account if any party to the proceedings shows that it is more appropriate in the case in question.
(3) An order under subsection (1) above may prescribe different rates of return for different classes of case.
(4) Before making an order under subsection (1) above the Lord Chancellor shall consult the Government Actuary and the Treasury; and any order under that subsection shall be made by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.
(5) In the application of this section to Scotland for references to the Lord Chancellor there shall be substituted references to the Secretary of State."
Section 10 of the 1995 Act provides:
"10 Admissibility and proof of Ogden Tables
(1) The actuarial tables (together with explanatory notes) for use in personal injury and fatal accident cases issued from time to time by the Government Actuary's Department are admissible in evidence for the purpose of assessing, in an action for personal injury, the sum to be awarded as general damages for future pecuniary loss.
(2) They may be proved by the production of a copy published by Her Majesty's Stationery Office.
(3) For the purposes of this section —
(a) 'personal injury' includes any disease and any impairment of a person's physical or mental condition; and
(b) 'action for personal injury' includes an action brought by virtue of the Law Reform (Miscellaneous Provisions) Act 1934 or the Fatal Accidents Act 1976."
PART I—THE GENERAL POINT OF PRINCIPLE
The Present Guidelines—The Conventional Approach
The basic rule, which has stood for over a century, and which is accepted on all sides in the present appeals, is that the damages are to be assessed on the basis that the fundamental purpose of an award is to achieve as nearly as possible full compensation to the plaintiff for the injuries sustained. ( Livingstone v Rawyards Coal Co [1880] 5 AC 25 at 39 per Blackburn J, quoted with approval by Lord Scarman in Lim Poh Choo v Camden Health Authority [1980] AC 174 at 187, and also in Pickett v British Rail Engineering [1978] 3 WLR 955 at 979.)
Later in his judgment in the Lim case, at page 198, Lord Scarman also stated that the court must be vigilant to avoid "not only duplication of damages but the award of a surplus exceeding true compensation for the plaintiff's deprivation or loss". (See also per Lord Bridge in Hodgson v Trapp [1989] 1 AC 807 at 819.)
In Hodgson's case at page 826 Lord Oliver of Aylmerton, with whom the other members of the Appellate Committee agreed, stated as follows:
"The underlying principle is, of course, that damages are compensatory. They are not designed to put the respondent, or his estate in the event of his death, in a better financial position than that in which he would otherwise have been if the accident had not occurred. At the same time, the principle of making a once-for-all award necessarily involves an assessment both of the probable duration and extent of the financial disadvantages resulting from the accident which the respondent will suffer in the future and of the present advantage which will accrue to him from payment in the present of a capital sum which he would not otherwise have and which represents his future income loss. In the making of that assessment, account has also to be taken of a number of unpredictable contingencies and in particular that the life expectancy from which the calculation starts may be falsified in the event by supervening illness or accident entirely unconnected with the event for which compensation is being awarded. Such an assessment cannot, therefore, by its nature be a precise science. The presence of so many imponderable factors necessarily renders the process a complex and imprecise one and one which is incapable of producing anything better than an approximate result. Essentially what the court has to do is to calculate as best it can the sum of money which will on the one hand be...
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