Wright v British Railways Board

JurisdictionEngland & Wales
CourtHouse of Lords
JudgeLord Diplock,Lord Fraser of Tullybelton,Lord Scarman,Lord Bridge of Harwich,Lord Brandon of Oakbrook
Judgment Date23 Jun 1983
Judgment citation (vLex)[1983] UKHL J0623-2

[1983] UKHL J0623-2

House of Lords

Lord Diplock

Lord Fraser of Tullybelton

Lord Scarman

Lord Bridge of Harwich

Lord Brandon of Oakbrook

Wright
(Appellant)
and
British Railways Board
(Respondents)
(Leap Frog)
Lord Diplock

My Lords,

1

This is an appeal in an action for damages for personal injuries. It comes directly to this House from the trial judge under the "leap-frog" procedure for which section 13 of the Administration of Justice Act 1969 provides.

2

The only question that arises on the appeal is whether the judge was right to award to the plaintiff/appellant interest at the rate of 2 per cent per annum from the date of service of the writ to the date of judgment, on the sum of £15,000 assessed as general damages for pain and suffering and loss of the amenities of life. I will call this head of damages (Scottice solatium) non-economic loss.

3

There was nothing special about the facts of the case. It was a typical case of a severe industrial injury causing disabilities that are likely to endure after the date of the judgment. The judge accordingly felt constrained to follow the guidance given six months before by the Court of Appeal in Birkett v. Hayes [1982] 1 W.L.R. 816 when it was laid down, as a guide-line to judges exercising their statutory functions in relation to awarding interest on damages, that interest on non-economic loss should be at the rate of 2 per cent. In effect, therefore, this is an appeal against the reasoning of the Court of Appeal in Birkett v. Hayes which led them to substitute for the amount of interest upon damages for non-economic loss awarded by the trial judge for the period from the date of service of the writ to the date of judgment, interest at the rate of 2 per cent, in place of interest at the average rates paid on money in court placed on short-term investment account ("STIA") over that period, that the trial judge had adopted.

4

My Lords, claims for damages in respect of personal injuries constitute a high proportion of civil actions that are started in the courts in this country. If all of them proceeded to trial the administration of civil justice would break down; what prevents this is that a high proportion of them are settled before they reach the expensive and time-consuming stage of trial, and an even higher proportion of claims, particularly the less serious ones, are settled before the stage is reached of issuing and serving a writ. This is only possible if there is some reasonable degree of predictability about the sum of money that would be likely to be recovered if the action proceeded to trial and the plaintiff succeeded in establishing liability.

5

The principal characteristic of actions for personal injuries that militate against predictability as to the sum recoverable are, first, that the English legal system requires that any judgment for tort damages, not being a continuing tort, shall be for one lump sum to compensate for all loss sustained by the plaintiff in consequence of the defendant's tortious act whether such loss be economic or non-economic, and whether it has been sustained during the period prior to the judgment or is expected to be sustained thereafter. The second characteristic is that non-economic loss constitutes a major item in the damages. Such loss is not susceptible of measurement in money. Any figure at which the assessor of damages arrives cannot be other than artificial and, if the aim is that justice meted out to all litigants should be even-handed instead of depending on idiosyncrasies of the assessor, whether jury or judge, the figure must be "basically a conventional figure derived from experience and from awards in comparable cases."

6

So Lord Denning M.R. put it, speaking for a unanimous five-member Court of Appeal in Ward v. James [1966] 1 Q.B. 273, 303. This was the case in which the Court of Appeal laid down a guide-line for the exercise by judges of the discretion, conferred upon them by section 6 of the Administration of Justice (Miscellaneous Provisions) Act 1933, to order trial by jury in civil actions, where the action concerned was one for damages for personal injuries. It was in the interests of uniformity and thus of predictability in these, the commonest of civil actions, that the guide-line that was there laid down and has been followed ever since was that the judge ought not, in a personal injury case, to order trial by jury save in exceptional circumstances.

7

The need for a judge in assessing damages for non-economic loss to have regard to awards in comparable cases has led to progressive general increases in the level of awards, particularly for serious injuries. These have been intended to reflect, though admittedly imperfectly, the general increase in the level of salaries and wages and, more particularly since inflation became rampant, the decrease in the real value of the money due to this cause.

8

It is with the increase in the nominal amount of awards in "the money of the day" (to borrow the apt phrase used by Barwick C.J. in O'Brien v. McKean 42 A.L.J.R. 223) due to inflation that your Lordships are primarily concerned in the instant case. That increase in awards has taken place irregularly by fits and starts rather than followed the actual shape of the rising curve of inflation; and there have been periods, particularly between 1973 and 1979 when it lagged significantly behind the decrease in real value of the money of the day. This was pointed out in Walker v. John McLean & Sons Ltd. [1979] 1 W.L.R. 760, 765, where the Court of Appeal re-affirmed the rule of practice that damages for non-economic loss are to be assessed by reference to the value of money at the date of the trial and not at some other and lower sum calculated by reference to an earlier and higher value of the pound.

9

Guide-lines on the rates of interest appropriate to be applied by the judge to damages for non-economic loss in the exercise of his discretion to include such interest in the sum for which judgment is given, were first laid down by the Court of Appeal in Jefford v. Gee [1970] 2 Q.B. 130, after the change in the law brought about by the Administration of Justice Act 1969.

10

The discretion to award interest on damages for non-economic loss was first conferred upon the court by section 3 of the Administration of Justice (Miscellaneous Provisions) Act 1934. Broadly speaking, the discretion was unfettered but in the case of actions for personal injuries an award of interest was made mandatory by the additional subsections to section 3 that were added by section 22 of the Administration of Justice Act 1969. So far as relevant the statute now reads:

"3.—(1) In any proceedings tried in any court of record for the recovery of any debt or damages, the court may, if it thinks fit, order that there shall be included in the sum for which judgment is given interest at such rate as it thinks fit on the whole or any part of the debt or damages for the whole or any part of the period between the date when the cause of action arose and the date of the judgment:

Provided that nothing in this section—

( a) shall authorise the giving of interest upon interest;

(1A) Where in any such proceedings as are mentioned in subsection (1) of this section judgment is given for a sum which (apart from interest on damages) exceeds £200 and represents or includes damages in respect of personal injuries to the plaintiff or any other person, or in respect of a person's death, then (without prejudice to the exercise of the power conferred by that subsection in relation to any part of that sum which does not represent such damages) the court shall exercise that power so as to include in that sum interest on those damages or on such part of them as the court considers appropriate, unless the court is satisfied that there are special reasons why no interest should be given in respect of those damages.

(1B) Any order under this section may provide for interest to be calculated at different rates in respect of different parts of the period for which interest is given, whether that period is the whole or part of the period mentioned in subsection (1) of this section."

11

In Jefford v. Gee the court laid down two guidelines as to interest to be awarded on damages for non-economic loss. The first was: that the period for which interest should be awarded was one beginning on the date of service of the writ and ending on the date of judgment. The second was: that the rate of interest should be the same as that which is payable on money paid into court which is placed on short-term investment account, i.e. the STIA rate.

12

The guide-line as to the date from which interest should be awarded has been followed ever since. It has not been questioned in the instant appeal. There are several considerations that justify the selection of this date rather than the date of the accident in the general run of personal injury cases. Since this guide-line has not been attacked and was adopted sub silentio by this House in Pickett v. British Rail Engineering Ltd. [1980] A.C. 136, to which I shall be referring, I can state those considerations briefly.

13

The starting point for any consideration of the inclusion of a sum for interest in an award of damages is the oft-cited statement of Lord Herschell L.C. in London Chatham and Dover Rly. Co. v. South Eastern Railway Co. [1893] A.C. 429, 437 expressing his regret that under Lord Tenterden's Act of 1834 interest could not be included in the judgment in an action claiming an unliquidated amount for what, in that case, was economic loss:

"I confess that I have considered this part of the case with every inclination to come to a conclusion in favour of the appellants, to the extent at all events, if it were possible, of giving them interest from the date of the action; and for this reason, that I think that when money is owing from one party...

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