Wood v British Coal Corporation
| Jurisdiction | England & Wales |
| Judge | Lord Mackay of Clashfern,Lord Bridge of Harwich,Lord Brandon of Oakbrook,Lord Templeman,Lord Lowry |
| Judgment Date | 11 April 1991 |
| Judgment citation (vLex) | [1991] UKHL J0411-2 |
| Date | 11 April 1991 |
| Court | House of Lords |
[1991] UKHL J0411-2
Lord Chancellor
Lord Bridge of Harwich
Lord Brandon of Oakbrook
Lord Templeman
Lord Lowry
House of Lords
My Lords,
I have had the advantage of reading in draft the speech prepared by my noble and learned friend Lord Templeman. I agree with it and with his conclusion that these appeals should be dismissed with costs, and that a certificate for three counsel should not be granted to the respondents.
My Lords,
For the reasons given in the speech of my noble and learned friend Lord Templeman I would dismiss these appeals.
My Lords,
I have had the advantage of reading in draft the speech prepared by my noble and learned friend, Lord Templeman. I agree with it, and for the reasons which he gives I would dismiss the appeals with costs. I also agree with him that the respondents should not be granted a certificate for three counsel.
My Lords,
There are two appeals before the House. Both appeals raise the same question, namely, whether a plaintiff who is disabled from earning his living by an accident, resulting from negligence or breach of statutory duty on the part of his employer, must in the assessment of damages payable by his employer for loss of earnings give credit for a disablement pension.
In the first appeal, the plaintiff, Mr. Smoker, who joined the London Fire Brigade on 21 July 1969, was employed as a professional fireman at all material times by the Greater London Council. The defendant authority, the London Fire and Civil Defence Authority, are liable for any damages against the Greater London Council by virtue of the provisions of the Local Government Act 1985 and statutory instruments made thereunder. On 7 February 1985 the plaintiff was disabled while on duty as a fireman in an accident caused by negligence or breach of statutory duty on the part of his employer. The plaintiff lost £13,525 which he would, but for the accident, have earned between 15 December 1985 and 15 December 1987 when he would have reached pensionable age and retired in any event. Between 15 December 1985 and 15 December 1987, the plaintiff received from the authority £9,926.89 by way of ill-health pension, injury gratuity and injury pension. The question is whether the authority must pay £13,525 for loss of earnings in which case the plaintiff would be £9,926.89 better off than he would have been had no accident occurred, or whether the authority is only liable to pay £3,598.11 on the grounds that the damages suffered by the plaintiff must be reduced by the amount he received by way of ill-health pension, injury gratuity and injury pension.
When the plaintiff became a fireman he became, by the terms of his employment, a member of the Firemen's Pension Scheme. He contributed 10.75 per cent. of his wages to the scheme and the authority contributed twice as much. Under the scheme a fireman who retires after 25 years' service receives a retirement pension of one half of his retiring pay. A fireman who retires as a result of permanent disablement receives an ill-health pension. A fireman whose disablement is occasioned by an accident on duty receives, in addition to his ill-health pension, an injury gratuity and an injury pension. The amounts of ill-health pension, injury gratuity and injury pension depend on the fireman's length of service at the date he retired and are a proportion of his retiring pay.
In the second appeal the plaintiff, Mr. Wood, was on 14 April 1982 injured in the service of the defendant corporation, the British Coal Corporation, in an accident for which negligence or breach of statutory duty on the part of the corporation was responsible to the extent of 75 per cent., the balance of 25 per cent. being attributed to the plaintiff's own negligence. The corporation's liability for damages was assessed at £54,959.55 after deducting £8,699.94 on account of pension receipts to which the plaintiff became entitled under the provisions of the Mineworkers' Pension Scheme. The question is whether the sum of £8,699.94 is deductible.
Under the Mineworkers' Pension Scheme, the plaintiff contributed 5.14 per cent. of his pay and the corporation contributed a like amount. A member of the scheme who retires after 45 years' service receives a retirement pension. A member who retires early, as a result of ill health, receives one ninetieth of his retiring pay for each year of service and a lump sum equal to three years' pension.
In Smoker's case Auld J. [1991] 2 W.L.R. 422 decided that he was bound by a decision of this House not to allow deduction of the ill-health pension, injury gratuity and injury pension and certified for an appeal direct to this House under section 12 of the Administration of Justice Act 1969. The authority now appeals with leave of the House. In Wood's case the Court of Appeal (Parker, Stuart-Smith and Leggatt L.JJ.) [1991] I.R.L.R. 22 reversing Boreham J. held that the pension receipts to which the plaintiff became entitled under the Mineworkers' Pension Scheme were not deductible from the damages payable by the corporation. With the leave of the House the corporation now appeals.
The question raised by these appeals is not devoid of authority from several common law countries. In Bradburn v. The Great Western Railway Co. (1874) L.R. 10 Ex. 1, it was held in an action for injuries caused by the defendant's negligence that the sum received by the plaintiff on an accident insurance policy could not be taken into account in reduction of damages. Bramwell B. said at p. 2:
"The jury have found that the plaintiff has sustained damages through the defendants' negligence to the amount of £217, but it is said that because the plaintiff has received £31 from the office in which he insured himself against accidents, therefore the damages do not amount to £217. One is dismayed at this proposition."
In the same case Pigott B. said at p. 3:
"The plaintiff is entitled to recover the damages caused to him by the negligence of the defendants, and there is no reason or justice in setting off what the plaintiff has entitled himself to under a contract with third persons, by which he has bargained for the payment of a sum of money in the event of an accident happening to him. He does not receive that sum of money because of the accident, but because he has made a contract providing for the contingency; an accident must occur to entitle him to it, but it is not the accident, but his contract, which is the cause of his receiving it."
The reason for the decision in Bradburn v. The Great Western Railway Co. was said by Asquith L.J. in Shearman v. Folland [1950] 2 K.B. 43, 46 to be as follows:
"If the wrongdoer were entitled to set off what the plaintiff was entitled to recoup or had recouped under his policy, he would in effect be depriving the plaintiff of all benefit from the premiums paid by the latter, and appropriating that benefit to himself."
In Payne v. Railway Executive [1952] 1 K.B. 26 a sailor injured in a railway accident as a result of negligence on the part of the defendant received a disability pension from the Royal Navy. The Court of Appeal declined to allow the defendant to set off the amount of the pension against the damages payable by the defendant. Cohen L.J. at pp. 35-36 cited with approval the statement by the trial judge, Sellers J., as follows:
"'The plaintiff has become entitled to the pension by reason of his naval service, it being one of the benefits such service affords. The pension would have been paid if the accident had been without any negligence on the part of the railway's servants. It was argued for the plaintiff that a pension must be disregarded in making the assessment just as insurance is to be disregarded, and that as a matter of principle a wrongdoer should not get the benefit of the fortuitous circumstance that the plaintiff was serving in the Royal Navy at the time and had consequently received a pension. I agree with that contention. Just as the wrongdoer cannot appropriate to himself the benefit of the premiums paid by the injured party to cover accident risks so he cannot, I think, appropriate the benefits accruing from the injured party's service which similarly entitles him to those benefits.'"
In British Transport Commission v. Gourley [1956] A.C. 185, this House held that in awarding damages for loss of earnings actual and prospective the court must allow deduction for the income tax and surtax which the plaintiff would have had to pay on his earnings. Earl Jowitt said at pp. 197-198:
"The broad general principle which should govern the assessment of damages in cases such as this is that the tribunal should award the injured party such a sum of money as will put him in the same position as he would have been in if he had not sustained the injuries: ….
The principle can … afford some guidance to the tribunal in assessing compensation for the financial loss resulting from an accident, and in such cases it has been referred to as 'the dominant rule of law': … There are, no doubt, instances to be found in the books of exceptional cases in which this dominant rule does not apply, as, for instance, in cases of insurance, or cases calling for exemplary or punitive damages, or in certain cases dealing with the loss of use of a chattel;"
In Judd v. Hammersmith, West London and St. Mark's Hospitals Board of Governors [1960] 1 W.L.R. 328, the plaintiff, who was employed by a local authority, received injuries which rendered him incapable of ever working again as a result of...
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