Compensatory Damages (OCR A-Level Law): Revision Notes
Compensatory Damages
Purpose of compensatory damages
The primary aim of compensatory damages in tort law is to restore the claimant to the position they would have occupied if the tort had never occurred. This principle recognises that while money cannot truly undo harm, it should provide the closest possible approximation to making the claimant whole again.
This fundamental principle is known as restitutio in integrum, which means putting the claimant back in the position they would have been in if the tort had not been committed, in so far as it is possible to do so with money.
Lord Blackburn established this principle in Livingstone v Rawyards Coal Company (1880), explaining that the law should endeavour to arrive at a sum of money which restores the injured party to their pre-tort position as nearly as possible.
However, the courts acknowledge the limitations of monetary compensation. In British Transport Commission v Gourley (1956), the House of Lords recognised that no amount of money can truly compensate for grievous injuries. The judge can only attempt to arrive at a fair estimate by considering all relevant factors, known as the heads of damage.
It is important to distinguish between damage (the actual harm caused by the tort) and damages (the monetary compensation awarded for that harm).
General damages
General damages are also described as unliquidated or non-pecuniary damages. This classification indicates that these losses cannot be calculated with mathematical precision. Instead, the judge must exercise discretion to determine an appropriate award based on the circumstances of each case.
Categories of general damages
General damages are awarded under several distinct headings:
Pain and suffering encompasses both physical pain and mental distress. This includes past, present, and future suffering, as well as anxiety about anticipated medical treatment or anguish caused by reduced life expectancy. Crucially, the claimant must be aware of their injuries to claim for pain and suffering.
The Awareness Requirement
This principle was established in Wise v Kaye (1962), where the claimant was left permanently unconscious. The court held that damages for pain and suffering require the claimant to have subjective awareness of their condition. Consequently, no award could be made for periods of unconsciousness.
Loss of amenity compensates for the deprivation of life's pleasures and activities that the claimant previously enjoyed. This covers the loss of specific skills or hobbies, the impairment of senses, and even diminished marriage prospects. The focus is on what the claimant can no longer do or experience due to the tort.
Future loss addresses ongoing financial consequences extending beyond the trial date. This includes pension rights and anticipated future expenses such as long-term nursing care or adapted accommodation.
Specific injuries are assessed according to a standardised tariff maintained by the Judicial Studies Board, known as the Kemp and Kemp Quantum of Damages. This tariff provides consistency across similar cases by establishing benchmark awards for particular types of injuries.
Post-trial loss of earnings
Future loss of earnings represents a particularly important category of general damages. Because future earnings cannot be calculated with certainty, the courts have developed a specific formula:
Calculating Future Loss of Earnings
- The multiplicand represents the court's assessment of the claimant's net annual loss of income
- The multiplier reflects the period over which this loss will continue
When the accident has shortened the claimant's life expectancy, the calculation of future loss of earnings must be adjusted accordingly. The landmark case of Pickett v British Rail Engineering Ltd (1980) illustrates this principle.
Worked Example: Pickett v British Rail Engineering Ltd (1980)
The claimant, aged 51, developed mesothelioma after inhaling asbestos at work. With a life expectancy of only one year remaining, damages were calculated on the basis that he would otherwise have worked until retirement at 65 years old.
This demonstrates that future loss is calculated based on the expected working life, not the reduced life expectancy caused by the tort.
Special damages
Special damages represent the opposite category to general damages. These are losses that can be assessed with substantial accuracy because they are quantifiable and have either already occurred or can be precisely calculated.
Types of special damages
Medical expenses constitute a major category of special damages. Importantly, claimants are not restricted to claiming only NHS treatment costs. They may recover the cost of private medical care if reasonable in the circumstances.
Pre-trial loss of earnings falls within special damages because the exact figure can be calculated. The claimant may claim for all earnings lost between the date of injury and the trial date, as well as other quantifiable expenses incurred during this period, such as medical costs, travel expenses, or the cost of care.
Property damage
When property has been destroyed, damages are generally assessed by reference to the market value of the property at the time of destruction. This provides an objective measure of the claimant's loss.
Measuring Property Damage
Where property has been damaged but not destroyed, the usual measure is the cost of repair. However, if repair costs exceed the market value of the property, the market value becomes the appropriate measure instead. This prevents the claimant from receiving a windfall by obtaining more than the property was worth.
Methods of payment
While damages are typically awarded as a single lump sum, the law recognises that this approach may not always be appropriate, particularly in cases involving serious long-term injuries.
Interim payments
Part 25 of the Civil Procedure Rules provides for interim payments - amounts paid before the final settlement is determined. These are particularly valuable in personal injury claims involving catastrophic injuries.
When a claimant faces immediate substantial expenses for items such as adapted housing, specialist equipment, or expensive care, interim payments ensure they can access necessary resources without waiting for the complete resolution of their claim.
Periodical payments
Section 2 of the Damages Act 1996 empowers courts to order that damages for future pecuniary loss in personal injury cases be paid wholly or partly as periodical payments. Rather than receiving a single lump sum, the claimant receives regular payments over time.
This approach can provide greater security for claimants with long-term needs, protecting them from the risk of exhausting a lump sum award prematurely.
Types of damages
Beyond the standard compensatory award, damages may take three additional forms depending on the circumstances:
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Nominal damages are awarded when the claimant has established that their legal rights were violated, but suffered no actual loss. These token awards, often as little as $1, vindicate the claimant's rights without providing substantial compensation.
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Contemptuous damages may be awarded when the court considers that the action should never have been brought. This typically occurs when the claimant's own behaviour has been reprehensible, making them unworthy of the court's sympathy. Like nominal damages, these are minimal amounts, but they carry an additional message of judicial disapproval.
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Aggravated damages are awarded when the defendant's conduct has worsened the claimant's injury. If the court determines that the defendant behaved in a manner that aggravated the harm suffered, the damages award may be increased to reflect this additional injury.
Key cases summary
| Case | Facts | Legal principle |
|---|---|---|
| Livingstone v Rawyards Coal Company (1880) | Foundational case on damages | Established the principle of restitutio in integrum - damages should restore the claimant to their pre-tort position as nearly as possible |
| British Transport Commission v Gourley (1956) | Eminent civil engineer suffered severe injuries while travelling by train | Recognised that no monetary award can truly compensate for grievous injuries; the judge must endeavour to arrive at a fair estimate considering all relevant factors |
| Wise v Kaye (1962) | Claimant left permanently unconscious and unaware of her surroundings | Established that claimants can only recover for pain and suffering if subjectively aware of their injuries; no claim possible for periods of unconsciousness |
| Pickett v British Rail Engineering Ltd (1980) | 51-year-old claimant developed mesothelioma from asbestos exposure, with one year to live | Confirmed that future loss of earnings should be calculated based on expected working life (until 65) even when actual life expectancy is reduced by the tort |
Exam guidance
Approaching Compensatory Damages in Problem Questions:
Identify the appropriate heads of damage by working through general and special damages systematically. Consider which categories apply to the facts presented.
Distinguish clearly between general and special damages. Remember that general damages cannot be calculated precisely (pain and suffering, loss of amenity), while special damages are quantifiable (medical bills, lost wages to date).
Apply the multiplicand × multiplier formula when calculating post-trial loss of earnings. Show your working and explain any adjustments needed.
Consider payment methods where appropriate, particularly interim or periodical payments in cases involving catastrophic injury with immediate or long-term needs.
Reference relevant case law to support your analysis, particularly the key principles from Livingstone, Gourley, Wise v Kaye, and Pickett where applicable.
Remember!
Key Points to Remember:
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Restitutio in integrum is the fundamental principle - damages aim to restore the claimant to their pre-tort position as far as money allows
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General damages are unliquidated (not precisely calculable) and include pain and suffering, loss of amenity, future loss, and specific injuries
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Special damages are liquidated (precisely calculable) and include medical expenses and pre-trial loss of earnings
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Post-trial loss of earnings = Multiplicand × Multiplier
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The claimant must be aware of their injuries to claim for pain and suffering (Wise v Kaye)
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Property damage is assessed by market value if destroyed, or repair costs if damaged (unless repair exceeds market value)
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Interim payments provide immediate funds before final settlement; periodical payments spread compensation over time
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Nominal, contemptuous, and aggravated damages are special categories reflecting particular circumstances of the case