Ministry of Justice Consultation Paper CP 09/07. The Law on Damages. response by Berrymans Lace Mawer Solicitors

Transcription

1 Ministry of Justice Consultation Paper CP 09/07 The Law on Damages response by Berrymans Lace Mawer Solicitors 20 July 2007

2 Contents Chapter 1 Claims for wrongful death page 2 Chapter 2 Bereavement damages page 6 Chapter 3 Liability for psychiatric illness page 10 Chapter 4 Collateral benefits page 12 Chapter 5 Cost of private care page 14 Chapter 6 Accommodation expenses page 20 Chapter 7 Aggravated, exemplary and restitutionary damages page 22 Law on Damages CP 09/07 response by Berrymans Lace Mawer 1

3 Chapters 1 & 2 Claims for wrongful death & bereavement damages Chapter summary (chapters 1 & 2) These chapters consider issues arising from the Law Commission s report Claims for Wrongful Death, and make recommendations for change to the Fatal Accidents Act 1976 (FAA). The main proposals are to extend the statutory list of claimants able to make a claim as dependants to include any person who was being wholly or partly maintained by the deceased immediately before the death ; to extend the list of claimants able to claim bereavement damages to include children of the deceased who were under 18 years old at the time of the death, and any person who had been living with the deceased as husband and wife (or in an equivalent same sex relationship) for at least two years immediately prior to the accident; and to provide for a fixed sum of 5000 in bereavement damages for each eligible child of the deceased under the age of eighteen. Chapter 1 - Claims for wrongful death 1. a) Do you agree that a residual category should be added to the statutory list of those entitled to claim for financial loss? b) Do you agree that this residual category should be limited to any person who was being wholly or partly maintained by the deceased immediately before the death? a) Yes, but we propose the following wording to a new sub section 1(3)(h) of FAA 1976 any person who had been wholly or partly maintained by the deceased for a two year period immediately before the date of death. In this way financial dependency will fall in line with the two year period cited in section 1(3)(b) FFA. The proposed wide draft of the residual category in the DCA consultation paper would encourage marginal claims of dependency. b) Yes, subject to comments above. 2. a) Do you agree that the fact of a person s remarriage or entry into a civil partnership should be taken into account when assessing a claim for damages under the FAA? b) Do you consider that the fact of a person s financially supportive cohabitation of at least two years following the death should be taken into account? c) Do you agree that the prospects of a person s remarriage, entry into a civil partnership or financially supportive cohabitation should not be taken into account in any Law on Damages CP 09/07 response by Berrymans Lace Mawer 2

4 circumstances (including where the person is engaged)? If not, in what circumstances would it be appropriate to do so? a) It is unrealistic to expect the court to overlook the fact of a financially supportive remarriage, civil partnership or cohabitation. b) c) Yes, except if a widow/widower has announced an engagement to be married it would be absurd if that fact was ignored. We support the Law Commission s proposal that an engagement to be married at the time of trial can be taken into account. 3. a) Do you agree that the fact of a person s remarriage or entry into a civil partnership or financially supportive cohabitation should be taken into account when assessing a claim for damages on the part of any eligible children? b) Do you consider that the fact of a person s financially supportive cohabitation of at least two years following the death should be taken into account when assessing a claim for damages on the part of any eligible children? a) To be consistent. b) To be consistent. 4. Do you agree that the courts should only take into account the prospect of divorce, dissolution or breakdown in the relationship between the deceased and his or her spouse or civil partner? a) where the couple are no longer living together at the time of death b) where one has petitioned for divorce, judicial separation or nullity c) where one has begun the procedure for dissolution of the civil partnership? a) No. b) No. c) No. Law on Damages CP 09/07 response by Berrymans Lace Mawer 3

5 The courts have shown a deft ability to take into account the prospects of divorce, dissolution or breakdown of marriage to date without statutory qualification of the circumstances in which this can be done. The prospect of marriage breakdown should not be considered on the same footing as the prospect of remarriage. The former is an assessment of what would have occurred absent the fatality. The latter is a direct consequence of the fatality. The former is assessed on the evidence of the marital status immediately prior to death. The latter is an assessment of the surviving spouses intentions after the death. The courts presently adopt a sensible approach. The government s proposals could lead to an injustice where there is clear evidence of a marriage breakdown but where the couple are still living together. It is best to leave this difficult and sensitive issue to the trial judge without statutory intervention. If there is evidence of a breakdown in the relationship this should always be considered and if appropriate taken into account by the trial judge. 5. Do you agree that section 3(4) of the FAA should be repealed and replaced by a provision to the effect that the prospect of breakdown in the relationship between the deceased and his or her partner should not be taken into account when assessing damages under the FAA? No. The government s proposal appears to be that the court will never take into account the prospect that cohabitees may separate. It is arguable that cohabitees are more likely to separate than a married couple and that a cohabitation will not last as long as a marriage. See for example: The conflation of marriage and cohabitation in government statistics a denial of difference rendered untenable by an analysis of outcomes, Harry Benson, Bristol Community Family Trust September Abstract Despite a great deal of evidence that marriage benefits and protects adults and children, successive UK governments have eroded and dismantled policy mechanisms that distinguish married from unmarried cohabiting families. Following the abolition of the term marital status in 2003, recent governmentsponsored family research refers only to couple parent families. This combined category conceals significant differences between unmarried and married couple outcomes typically demonstrated by overseas and earlier UK research. Analysis of data from the Millennium Cohort Study, the most up-to-date large scale UK panel survey of new parents, shows substantial differences in family stability between married and unmarried couples in the early years of parenthood, even after discounting socio-economic factors such as age, income, education and race. Most notably, the difference in family breakdown risk between married and cohabiting couples is sufficient that even the poorest 20% of married couples are more stable than all but the richest 20% of cohabiting couples. Given the central importance accorded to ensuring optimal outcomes for children in public policy, these findings demonstrate that the lack of distinction between marriage and cohabitation in government policy and research is untenable. Moreover this conflation of terms is at odds with the increasing requirement Law on Damages CP 09/07 response by Berrymans Lace Mawer 4

6 In addition, The Office of National Statistics 2005 General Household Survey (marriage and cohabitation tables) 2 suggests that the average duration of a cohabitation that does not end in marriage is less than 4 years. This is a consistent trend over recent survey years. We suggest that statutory intervention here is not helpful. It is fair that the prospect of separation is taken into account when supported by evidence. It is not logical for the government to suggest that in some circumstances the prospect of marriage breakdown can be taken into account but not the prospect of cohabitees separating. Mesothelioma claims We note that the consultation paper (paragraphs 27 30) refers to the work that is being led by the Department for Work and Pensions (DWP) to improve the speed and the quality of handling mesothelioma claims. We fully support this work and will assist government (both DWP and the Ministry of Justice) in discussing the practical aspects of mesothelioma claims handling. This work is based on the premise that mesothelioma claims merit a different approach. That distinction has been made by the legislature as a matter of policy, under s3 Compensation Act We would suggest that form a purely compensatory perspective setting aside the policy and process issues above there is no sound distinction (save as to general damages for pain suffering and loss of amenity) to be made between mesothelioma claims and other tortious terminal cancer claims specifically and other fatal accident claims generally. incumbent upon modern states to be transparent in their functioning and accountable for clearly stated target delivery through the release of comprehensive statistics. 2 Law on Damages CP 09/07 response by Berrymans Lace Mawer 5

7 Chapter 2 Bereavement damages 6. Do you consider that bereavement damages should continue to be available? 7. a) Do you think it would be appropriate to provide clarification in the explanatory notes accompanying any legislation that the purpose of bereavement damages is no more than a token payment in acknowledgement of grief? b) Are there any other ways in which the purpose of bereavement damages could be explained to the public? a) We believe the government should adopt the Law Commission s proposal that the purpose of a bereavement award should be stated as: (i) (ii) Compensating relatives for mental suffering Compensating relatives for loss of care/guidance/society of the deceased which can t be assessed in pecuniary terms. The lack of clarity in the statute as to the purpose and ambit of the bereavement award has led to courts awarding general damages for loss of care and affection which duplicates the bereavement award. We agree to widening the scope of recipients of the bereavement award but the purpose of the bereavement award should be clearly stated to avoid the possibility of double compensation and duplication of the common law award of loss of care and affection. This would mean no further common law claims for loss of love and affection. b) No. Not that we can readily ascertain. 8. a) Do you agree that a parent should only be able to claim bereavement damages for the loss of their child where the child is under 18 and unmarried? Law on Damages CP 09/07 response by Berrymans Lace Mawer 6

8 b) Do you agree that unmarried fathers with parental responsibility should be able to claim bereavement damages for the loss of a child under 18? c) What is your view on whether step-parents who were living with and had caring responsibilities for a child under 18 should be able to claim bereavement damages? a) b) Yes, provided that the definition of parental responsibility under the Children s Act 1989 (as amended) is met. c) We note that the Law Commission proposed that step-parents should not be eligible to claim bereavement damages. We are not sure that this necessarily reflects what the public s views might be here. It seems to us that there is a potential injustice in denying a bereavement award to a step-parent following the wrongful death of a step child (and vice versa if the step parent had died). Whilst allowing the award might dilute the bereavement award between the natural and step parents, we suggest that that is a lesser injustice than denying the award to a step parent with either caring responsibilities or formal parental responsibilities (as defined). We would also comment that we wholly endorse the first sentence of paragraph 43 of the consultation paper: The Government agrees with the Commission's recommendations that the term parent should be defined to include adoptive parents. 9. Do you agree that children of the deceased (including adoptive children) who are under 18 should be added to the statutory list, but that eligibility should not be extended to adult children of the deceased? 10. Do you agree that brothers and sisters of the deceased should not be eligible to recover bereavement damages? The bereavement award could become too diluted and spread too thinly. Law on Damages CP 09/07 response by Berrymans Lace Mawer 7

9 11. Do you agree that the statutory list should be extended to include people who, although not married to the deceased, have lived with the deceased as husband and wife (or if of the same sex in a equivalent relationship) for not less than two years immediately prior to the accident? We accept the analysis in the paper that the not less than two years test is one which is used in other areas to gauge the stability of a relationship and that it is appropriate to use it here. 12. Do you agree that engaged couples should not be added to the statutory list of those who can claim bereavement damages? We are not aware of any cases of injustice that result from the law as it presently stands, which does not permit claims made by the deceased s fiancé(e) assuming that he (or she) does not qualify under the cohabitation rule set out at 11 above. 13. a) Do you agree that the current award of 10,000 should be available to the deceased s spouse, civil partner or cohabitant without dilution (subject to b), and that additional sums should be available to any other eligible claimants? b) Do you agree that where a spouse or civil partner and a cohabitant are both eligible to claim, the sum of 10,000 should be divided between the two? c) Do you agree that the sum of 10,000 should continue to be available to the parents of an unmarried child under 18, to be divided between them if appropriate? d) Do you agree that an award of 5,000 should be made to each eligible child under 18 in respect of the death of a parent? a) b) c) d) No. Law on Damages CP 09/07 response by Berrymans Lace Mawer 8

10 We suggest a flat award of a further 10,000 could be shared equally among minor children. We note that this amounts to a significant departure from the practice to date where the bereavement award has been based on a fixed amount per death, regardless of the number of eligible claimants. Such a departure brings with it a need properly to define the potential eligible claimants in order to avoid unnecessary disputes as to entitlement and qualification. We are prepared to accept that limiting entitlement to partners etc (spouses, civil partners and long-standing cohabitants), parents (of minor children) and minor children is a pragmatic approach to the problem of apportioning what to date has been a quite limited conventional award as between a number of competing eligible claimants. There is a case for limiting the award to 10,000 to be shared between all eligible children. It is that in the same way that the 10,000 bereavement award is diluted or split between eligible parents, so should a children s 10,000 bereavement award be split amongst eligible children. Essentially the above response means that the combined bereavement award would generally be a predictable 20,000 where the deceased had a partner (etc) and minor children. 14. Do you agree that contributory negligence on the part of the claimant should reduce the award of bereavement damages? Law on Damages CP 09/07 response by Berrymans Lace Mawer 9

11 Chapter 3 Liability for psychiatric illness Chapter summary The Law Commission in the 1998 report Liability for Psychiatric Illness (Law Com No 249) recommended introducing statutory provisions in relation to claims for psychiatric illness for so called nervous shock arising in secondary victims. Factors which presently limit these claims are the need to show: There was a close tie of love and affection to the person killed, injured or imperilled; The secondary victim was present at the accident or its immediate aftermath; Recognised psychiatric injury has been caused (not just extreme upset or grief); The psychiatric injury was caused by direct perception of the accident, incident or its immediate aftermath (sight or hearing) and not just hearing from a 3 rd person. Case law has developed such that close ties of affection are presumed in the case of parents, spouse, children and possibly a fiancée of the immediate victim. Other more distant relatives or friends are required to prove that the tie existed. The Law Commission s recommended legislative provisions in this area if implemented would have the affect of (i) widening the list of people assumed to have a close tie of love and affection to include siblings and cohabitants, and (ii) also remove the requirements for the secondary victim to be close in time and space to the accident / aftermath, or the means by which they learnt of it - so removing the requirement that the psychiatric illness be caused by a shock. To reject the recommendation of the Law Commission and allow the courts to continue to develop the law in this area rather than impose a statutory solution. We agree with the government s recommendation to reject any statutory reform. The main social benefit envisaged by the Law Commission from its proposed legislation was to introduce a clear and coherent regime to govern these claims. It was intended to provide greater certainty for claimants, allow a wider range of people to claim and remove the need for shock. This was the Commission s view in A decade on, we do not agree that the law in this area today is confused or arbitrary. The courts are already able to consider a wider number of people who are said to have a close tie of love and affection through evidence of the same. Removal of the requirement for shock would create more complex evidential issues of causation. Rather than simplifying or clarifying the system it would lead to more costly (and no doubt distressing) investigations as to whether someone s psychiatric illness was caused by the alleged breach or some other intervening or non related factors - particularly where the condition developed some time after the accident / incident. Law on Damages CP 09/07 response by Berrymans Lace Mawer 10

12 As the consultation paper identifies, recent case law shows that the courts are able to develop a flexible and sensitive approach to the shock requirement in any event 3. The Commission s proposed legislation would go against public policy to have proper and reasonable limits to litigation, and would arguably open an unacceptable floodgate of claims. For every fatal claim there would be the potential for at least one claim for psychiatric illness (if not many more) and an increase in speculative litigation. Without the shock factor it becomes more difficult to separate cases of severe grief from those of psychiatric illness - and in many cases the dividing line between the two (particularly claims made for depression or anxiety or adjustment disorders or a combination of these) is difficult, even for experienced psychiatric experts, to identify. When would finality to litigation be achieved? What would be made of claims where the condition arose years after the breach? Hence it is our view that rather than bringing clarity, the legislation proposed by the Law Commission would throw up new difficulties which the present requirement for shock largely avoids. As the Commission did not propose any change to the law for employers the proposed legislation would have greatest impact in motor personal injury and clinical negligence claims. Simply throwing open the floodgates to claims would not result in any great social benefit but would result in an undesirable financial burden not just to defendants and the insurance industry but also to the NHS and ultimately the taxpayer. An ABI estimate from 2001 was of an increased cost falling to insurers of 235M per annum. The NHSLA estimated that it would lead to a further 450 claims against them per annum with costs of 35M plus the need to increase reserves by 300M.This would reduce resources for other (and arguably more beneficial) areas of the NHS. In summary here, we therefore agree with Government that the common law is able to develop in a proper and sensitive way to provide a fair balance between the interests of all and that no legislation should be introduced. 3 See North Glamorgan NHS Trust v Walters [2002] EWCA 1792;Galli-Atkinson v Seghal [2003] EWCA Civ 697. Law on Damages CP 09/07 response by Berrymans Lace Mawer 11

13 Chapter 4 Collateral benefits Chapter summary This chapter discusses collateral benefits (payments or benefits in kind, other than the damages claimed, which a tort victim would not have received but for the tort. It puts forward a preferred approach which would treat collateral benefits in a way which would ensure that claimants get compensated once at the full expense of the tortfeasor, and seeks views on whether this approach should apply to a range of different collateral benefits. It also considers the Law Commission s recommendations on gratuitous care. It recommends that the approach taken by the House of Lords in Hunt v Severs, which held that claimants are entitled to recover damages for gratuitous care but must hold damages in trust for the carer, should be replaced by a personal obligation to account for the money to the carer. It also recommends that this should apply to future gratuitous care provided by the defendant. 15. a) Do you agree that the preferred outcome in principle when collateral benefits arise is that set out in paragraph 107? b) Do you agree that, in general, the best way of achieving this is to disregard the benefit in assessing damages, and to give the payer a right of recovery? a) Yes in principle. As a matter of theory, we find it difficult to argue against the contention in the paper that: in principle the most appropriate outcome when collateral benefits arise is one where the claimant is compensated for his or her losses, but only once; and wherever practicable at the expense of the tortfeasor rather than a collateral benefit payer. In some cases, the difficulties involved may make it impracticable to achieve this We believe that the courts have been able to provide a reasonably workable and consistent set of rules as regards collateral benefits and the need to avoid double recovery. In practice, the complexities that may arise because of the many possible collateral sources and the different basis on which they are provided and funded mean that cases are very often fact specific. Hence we tend to agree with the Law Commission that this matter is better left to control by the courts as opposed being subject to any legislative intervention. b) No. Compensation, but no more than compensation, for those injured by a legal wrong should be seen as the primary purpose of tort law. Collateral benefits are a complex area of law and need to be addressed on a case by case basis so as to avoid double compensation and allow flexibility. Under the current law, many collateral benefits are disregarded, rights of recovery exist and the courts as a final resort examine the facts of the specific case. To disregard the benefit in assessing damages, and to give the payer a right of recovery is not desirable for reasons of practicality and wider policy considerations such as satellite litigation (see consultation paper paragraph 109). Law on Damages CP 09/07 response by Berrymans Lace Mawer 12

14 There is also an inconsistency between fatal and non fatal claims. Section 4 of the Fatal Accidents Act 1976 creates difficulties and often results in double compensation. The issue as to which benefits should be disregarded was considered in the recent case of Arnup v M W White Ltd [2007] EWHC 601 (QB) where death in service benefits were not disregarded. We recommend that section 4 should be reformed so that the claimant is compensated only once for his or her losses. 16. Do you agree that no action is required to amend the present law in relation to charitable payments? It is not the tort which led to the charitable payment but the generosity of the person giving. Public policy and justice require the present position to remain so that such payments are disregarded when assessing damages. Governmental Proposals 17. a) Do you agree that the Hunt v Severs trust approach should be replaced by a personal obligation to account? b) Do you agree that this should apply to damages for future as well as past gratuitous care? c) Do you agree that this should generally apply regardless of the identity of the carer but that (as now) damages should not be awarded for past gratuitous care provided by the tortfeasor? d) Do you agree that the FAA should be amended to allow damages to be awarded under the Act in respect of services gratuitously provided to a dependant of the deceased? a) No. b) No. c) A legal as opposed to moral obligation makes it more likely that the claimant will account to the carer for the damages awarded for the care provided. See (a) above. The trust approach is generally preferable see (a) above. Law on Damages CP 09/07 response by Berrymans Lace Mawer 13

15 d) No. We agree that as now, damages should not be awarded for past gratuitous care provided by the tortfeasor. There would be a risk of double recovery if the recommendation at 17(d) were accepted, although this is not a problem we often come across in practice. The principle for assessing a loss of services claim under the Fatal Accidents Act should be based on the services that the deceased would have provided. Where such services are then provided gratuitously by another following the death, there we see no reason why the dependant should not hold the appropriate amount of the damages he receives for the loss of services (of the deceased) on trust for the gratuitous provider of the replacement services. 18. What are your views on whether the law should be clarified to ensure that: a) insurance payments are disregarded in the assessment of damages regardless of who paid the premiums; and b) contractual provisions for recovery are enforceable regardless of the nature of insurance? a) Insurance payments should only be disregarded where the claimant has paid the premium see Gaca v Pirelli General Plc [2004] EWCA Civ 373 where the insurance payment was deducted because there was no evidence to show that the claimant paid or contributed to the cost of the policy. Many insurance policies contain a provision for recovery against the tortfeasor and to proceed on this basis is preferable to disregarding such payments in all cases. To do the latter would lead to double recovery which is inequitable and undesirable. See also our responses at 15 above. b) Contractual provisions for recovery should not be enforceable regardless of the nature of the insurance. This would lead to further uncertainty (eg champertous contractual provisions), more litigation, increased costs and ultimately higher insurance premiums. 19. Do you agree that no change is appropriate in the law relating to pensions? No. Law on Damages CP 09/07 response by Berrymans Lace Mawer 14

16 The existing law (Parry v Cleaver [1970] AC 1) allows an element of double recovery in that disablement pensions, whether voluntary or not, are ignored in the assessment of damages for loss of earnings. We suggest that the claimant should be compensated only once and put in the position he would have been in, had the damage not occurred. Pensions are distinguishable from charitable gifts where justice reasonableness and public policy support non-deductibility (of the charitable gift). 20. a) What are your views in principle on whether the law should be changed so that sick pay is disregarded in the assessment of damages? b) If you consider that any change may be appropriate, should this apply only to sick pay above the statutory minimum? c) Should there be an exception where the employer is also the tortfeasor? a) The preferred outcome can be achieved under the existing law. Sick pay should be deducted from loss of earnings so there is no double recovery. Employers can also make contractual provision to allow for claimants to recover any such payments from the tortfeasor. b) No change is appropriate. c) No change is appropriate. 21. Do you agree that the law on redundancy payments is best left to the courts? See Wilson v National Coal Board 1981 SC (HL) 9 redundancy payments are deducted from loss of earnings where the tort caused the redundancy. Law on Damages CP 09/07 response by Berrymans Lace Mawer 15

17 Chapter 5 Cost of private care Chapter summary In June 2003 the Chief Medical Officer (CMO) produced a report, Making Amends which recommended withdrawing scope for payment of private care costs in clinical negligence cases involving the NHS as defendant. This recommendation raises wider issues relating to damages for private care costs in other proceedings, which are discussed in this chapter. This chapter also discusses the interface between the public and private provision of care and accommodation services in the light of the case of Sowden v Lodge. 22. Do you consider in principle that section 2(4) should be repealed? If so, how might a new system of care packages work? What difficulties would need to be addressed in developing such arrangements? Preliminary remarks Whilst we might marginally favour the repeal of s2(4), we suggest that this really is not the first question when considering policy on compensation for the costs of private care. There is a compelling need for research into all aspects of care here, which we set out below in our response at 25. The results of such research should be used to inform the relevant policy going forward. Comment Whilst section 2(4) precludes a defendant from arguing that it is unreasonable to incur private medical treatment because of the availability of NHS treatment, recent case law (Sowden v Lodge [2004] EWCA Civ 1370); Crookdale v Drury [2004] EWCA Civ 1370) confirms that the tortfeasor can challenge whether (i) the need for treatment is reasonable and necessary, (ii) the extent, duration and costs of the same are reasonable, (iii) the claimant will on balance incur such expenses. One might therefore conclude that on balance, the current system provides enough flexibility to ensure that the claimant receives the reasonable care/treatment required and maintains a degree of control over the package provided. In this scenario,, the state continues to fulfill its function in providing a base level of care which can be topped up by private provision at the tortfeasors expense as is appropriate. However, repeal of section 2(4) would ensure that the claimant considers all the options and that the most reasonable package is adopted subject to the claimant establishing the clinical necessity for care, the nature and extent of such care and (if appropriate) that it will be required going forward. Further reasons for repeal are out at in the first part paragraph 161 of the consultation paper (see also Pearson Report 1978; CMO 2003 report Making Amends). Introducing a new system of care packages is complex. Issues which need to be addressed include public/private funding, the claimant s control over the care package and contributory negligence. Options include: Law on Damages CP 09/07 response by Berrymans Lace Mawer 16

18 Requiring the tortfeasor to pay the cost of the treatment/care directly to the provider so that only the actual costs are paid, subject to deductions for contributory negligence. The claimant and/or state will have to address any shortfall. The introduction of a care voucher system where the defendant pays for agreed care upon production by the claimant of a care voucher. Insurer funded super hospitals. 23. What benefits or drawbacks might there be for: a) Claimants b) Defendants c) The taxpayer These are set out in the paper at the two sections of paragraph 161. Benefits include: a) For claimants greater certainty that their care needs would be met; a tailored care package with regular reviews which could be adapted to meet changing needs and take advantage of better or new treatments. b) Defendants flexibility in funding care from both private and public sources. c) The taxpayer value for money through economies of scale in the NHS. Drawbacks include: a) For claimants perceived loss of control, delay, satellite litigation as to level of care required. b) Defendants arguments as to amount of care they are required pay and/or obliged to reimburse; satellite litigation. c) The taxpayer shortfall in recovery of costs; overload in NHS. 24. How could any new system ensure that claimants and their carers retain a sense of control over the care provided? If section 2(4) were to be repealed, the claimant can still retain control of their future treatment/care through their choice of public or private provision or a combination of both, subject to reasonableness. The short term treatment/care regime is often in place/underway before the defendant insurer knows about the claim and/or liability has been admitted. The provision of public care ensures that the claimant is able to make an informed decision as to his future treatment/care needs and retain a sense of control over that treatment/care with private care still available where reasonable. Law on Damages CP 09/07 response by Berrymans Lace Mawer 17

19 25. If section 2(4) is retained, is any action needed to avoid possible over-compensation and to ensure that damages for the cost of care are used appropriately? If so, would a requirement for the defendant to pay directly to the provider of care to be appropriate? There are two questions here. Our answers are Yes and Possibly. We believe there is a pressing current need to avoid possible over-compensation and to ensure that damages for the cost of care are used appropriately. This is at the heart of the debate on care. Progress in this debate can be made only with knowledge of how current awards are being used, and whether that is appropriate or otherwise. Hence the need for detailed research on care awards. In our view, the research mentioned at paragraph 154 in the consultation paper is not fit for purpose. According to 154: The [Law] Commission noted that there is a perception that some claimants who claim damages for the cost of private care subsequently use NHS treatment, effectively charging the public sector twice where it is the defendant and driving up costs elsewhere by forcing private provision of services to duplicate publicly provided ones. The Commission however noted that empirical research did not support this assertion. The use of this research today must be open to serious question. The research quoted is "How Much is Enough" (Law Com 225) published in According to its pages 4 & 5, it was based on "people living in England and Wales who had settled their claim for damages between January 1987 and December 1991." So already in 2007, the Law Com research is a generation out of date. Moreover, the Law Com research was based on settled cases, so it very probably captured accidents which occurred in the early 1980s and quite possibly late 1970s [!], given that by definition these claims would have had very long settlement times, as of course this period was pre-woolf. Furthermore, the Law Com research is based on very small numbers indeed, with the Commission noting that "134 of the respondents (31% of the sample) received damages for 100,000 or more." (page 5 How Much is Enough ) That band was the highest value band covered in the Law Commission research - it bears absolutely no resemblance to the millions of pounds awarded in catastrophic injury claims one generation on. There are tens if not hundreds of millions of pounds involved in care claims costs, and it is simply inappropriate to try to take policy further by proceeding from such outmoded research. We therefore recommend that the Government urgently commissions independent research in this important area. There is one further point that we would like to make on care and the need to avoid possible over-compensation and to ensure that damages for the cost of care are used appropriately. It seems to us very difficult to justify, socially, a system in which a claim may be pleaded on a certain needs basis, but one in which after the award is made very often on that very same basis there is no scrutiny of how (if at all) the award is spent, or deployed on the care as claimed. Law on Damages CP 09/07 response by Berrymans Lace Mawer 18

20 We of course accept the principle that damages are for a claimant to spend as he or she sees and we support that for (future) loss of earnings. However, in respect of (future) care claims, the position is wholly different. The award is for a very particular need, and we do not believe that it is fair or equitable to the compensator or to society at large that awards for care can be spent on other purposes. Most importantly it is not fair to the claimant spending the care awards on other purposes by definition means that he or she is not getting the care that he or she needs. For these reasons, we suggest that it may be time to consider a more interventionist approach with regard to how care awards are deployed the research we propose above could help with developing this. 26. Do you agree that where there is duty or statutory obligation on public bodies to provide care and accommodation services to the claimant, the central principle should be that the tortfeasor should pay for the costs of care. However, public bodies should continue to comply first with their statutory duties to provide services. Additionally, there should be robust controls against any possible element of double recovery. 27. How could the practical difficulties surrounding the assessment of what care is appropriate be resolved in a clear and cost-effective way that enables claimants and those close to them to retain a sense of control? The assessment of care is often complex in high value cases. It will continue to be so regardless of whether section 2(4) is repealed or not. Each case is different. The assessment of what care is appropriate is best left to the care experts and treating clinicians. That process allows the claimant to retain a sense of control. Repealing section 2(4) will not result in the claimant losing control. See also response to questions 24 and 25 above. Law on Damages CP 09/07 response by Berrymans Lace Mawer 19

21 Chapter 6 Accommodation expenses Chapter summary This chapter discusses possible new methods to calculate accommodation expenses arising from the need to buy new accommodation or adapt existing accommodation because of the claimant s injury. It seeks views on two possible options: moving to a method whereby the defendant would pay the extra capital cost of the property at the time of trial, and in return receive a charge over the property for the amount paid, repayable on the claimant s death or when the accommodation was otherwise not needed by the claimant; or simply awarding the appropriate extra capital cost to the claimant. 28. Do you consider that giving the defendant a charge over the property would be a possible alternative to the Roberts v Johnstone method in relation to the purchase of new accommodation and the cost of altering the claimant s existing property? Yes but by agreement only. It is a possible alternative and a solution in appropriate cases where the parties agree. The claimant should not be compelled to adopt this proposal for the reasons at paragraphs 187 & 188 (complexity and cost). 29. Alternatively, should the claimant simply be awarded the appropriate extra capital cost without any Roberts v Johnstone calculation or provision for recovery? If not, do you have any other suggestions for dealing with this issue, or do you consider that the current system should remain in place? No. The current system should remain in place unless the parties agree an alternative such as a charge or purchase and lease-back solution. Claimants can use interim payments/other damages to raise the initial capital to purchase the property at the outset. Any unfairness here is outweighed by the benefit to the claimant of having the property without a charge over it. Claimants generally look to invest some of their damages and property is one form of such investment. Government Proposal 30. Do you agree that no action is necessary in respect of these issues? Law on Damages CP 09/07 response by Berrymans Lace Mawer 20

22 The reasons are clearly expressed in the consultation paper at 192. Law on Damages CP 09/07 response by Berrymans Lace Mawer 21

23 Chapter 7 Aggravated, exemplary and restitutionary damages Chapter summary This chapter reconsiders the Law Commission recommendations on aggravated and restitutionary damages in the light of case law which has clarified a number of issues since the Government s initial announcement in November 1999 to accept recommendations. It concludes that no legislative change is necessary. It seeks views on a proposal to replace the term additional damages with aggravated and restitutionary damages in the Copyright Design and Patents Act 1988 and the Patents Act 1997, and confirms that the Government does not intend to extended the available of exemplary in civil proceedings. It also seeks evidence in accordance with a recommendation of the Gowers Review of Intellectual Property on how the systems of damages works in relation to patents designs; trade marks and passing off; and copyright and related rights. 31. Do you agree that the term exemplary damages in the Reserve and Auxiliary Forces (Protection of Civil Interests) Act 1951 should be replaced by aggravated damages? It also seems to us that the civil law on exemplary damages is presently out of kilter with the purpose set out in paragraph 198 of the consultation paper, that The purpose of the civil law on damages is to provide compensation for loss, and not to punish. In Kuddus v Chief Constable of Leicestershire, for example, Scott LJ argued that exemplary damages in vicarious liability situations appeared to punish only the innocent Chief Constable rather than the wrongdoer. This outcome appear to be out of step with the stated purpose in paragraph 198. Again, in Thompson v Commissioner of Police [1998] QB 498 at 517 Woolf MR said: The fact that the defendant is the Chief Officer of police also means that here exemplary damages should have a lesser role to play it is difficult to justify the award where the defendant and the person responsible for meeting any award is not the wrongdoer, but his employer the instances in which this is alleged to have occurred should not be frequent. However, claims for exemplary damages in cases against the police are now commonplace and such claims bring a burden in terms of damages paid, increased costs and the associated uncertainties. These burdens fall squarely on the taxpayer - most claims are funded with by the Legal Services Commission, and on the defendant side damages and costs are incurred by chief constables on a regular basis. The Court of Appeal in Rowlands v Merseyside Police [2006] side-stepped a legal justification of the award of exemplary damages in vicarious liability situations by arguing that policy was responsible for the continuance of this head of claim. We would recommend legislation to remove the anomaly that an innocent Chief Constable should have to pay punishment damages at all in vicarious liability situations. The saving to the taxpayer would be immense. Law on Damages CP 09/07 response by Berrymans Lace Mawer 22

24 32. Do you agree that there is no need for legislation in relation to the law on restitutionary damages? Governmental Proposals 33. Do you agree that legislation to confirm that the purpose of aggravated damage is compensatory and not punitive is unnecessary. 34. Do you agree that legislation is not needed to clarify the interface between aggravated damages and damages for mental distress? Yes - as long as there is certainty and consistency in the terminology used by the courts. 35. Do you agree that in the Copyright and Patents Act 1988 and the Patents Act 1977 the term additional damages should be replace by aggravated and restitutionary damages? 36. What are your views on how the system of damages works in relation to: a) patents b) designs c) trade marks and passing off and d) copyright and related rights? Law on Damages CP 09/07 response by Berrymans Lace Mawer 23

25 [No response] Ó Berrymans Lace Mawer 2007 P:\PUBLIC POLICY\THE LAW ON DAMAGES - BLM RESPONSE FINAL.DOC Law on Damages CP 09/07 response by Berrymans Lace Mawer 24