nm1151: okay you probably remember that we are dealing with compensation now so 
we're looking at damages awards and just to recap the topics we covered 
yesterday do you remember we er were looking at the way the judiciary will 
calculate the damages and we finished yesterday's class by considering the new 
method of calculation called the use of the Ogden tables if you remember 
previous to this summer the judges had relied on a fairly arcane form of 
calculation using something called the multiplier method where you took a sum 
which was usually the net earnings and multiplied by a figure that they had 
taken from precedent really and we saw yesterday that the new method under the 
Ogden tables and the reduced interest rate of three per cent did result in 
quite a substantial difference in the amount of the awards so where judiciary 
now use these Ogden tables which are based more on economics the awards are can 
be quite a lot higher than where they used the multiplier so 
quite a significant change has occurred this summer in the case of Wells and 
Wells House of Lords decision i want to move on now to something called the 
Smith and Manchester award hopefully you've got yesterday's handout in front of 
you now the Smith and Manchester case was also quite important a nineteen-
seventy-four decision and what this award was really dealing w-, with was the 
situation where the plaintiff was actually in employment at the time of trial 
so we weren't dealing with a situation where the the injured party was 
completely er unable to to work we now have a situation where the plaintiff was 
actually working at trial and of course this will be quite a difficult 
assessment for the court to try to calculate to what extent the injury will 
affect the plaintiff in the future in terms of his ability to work however in 
this case the court did indicate to us that there's certain things they would 
take on board in assessing the 
future workability if you like the future ability to to go back on to the 
labour market sometime in in the future and the solicitor who's maybe looking 
at the question of a Smith and Manchester award has now been guided to look at 
certain issues and these are the following well first of all of course they 
will consider what the plaintiff's present or current wage is they will look at 
the plaintiff's future prospects and thirdly they need to consider of course 
the ability of the plaintiff to obtain work in the future or whether there will 
be an impact on that plaintiff resulting from the injury now again like most of 
these calculations as we have seen a lot of it is hypothetical we don't really 
know what is going to happen in the future and what real impact the injury 
might have on the plaintiff in terms of labour his ability to to fall back on 
the labour market so these Smith and Manchester claims are quite complicated 
and require the use of expert 
evidence to try and assess the impact that the injury has had on the 
plaintiff's ability to work so for example you might have experts called in to 
look at the particular occupation in which the plaintiff is is working and 
assess the future prospects in that occupation so for example is it likely that 
there are going to be difficulties in employment in the future in this area of 
work and obviously particularly in relation to the plaintiff's own employment 
to what extent does the disability affect this plaintiff in terms of the 
general employment situation of the job they might need evidence as to the 
possible need for the plaintiff to move areas to seek employment so that's a 
possible impact from a disability from an injury to what extent does our 
plaintiff need to go elsewhere to seek employment thirdly you might get expert 
evidence called in to look at the unusual insecurity of the particular 
occupation in which the plaintiff is in so a difficult assessment but 
an important one it does try to take account of the impact of the injury on the 
plaintiff's ability to work in the future and as i said experts called in to 
look generally at the this area of employment and also at the particulars of 
the plaintiff's case can the plaintiff er does he have to move elsewhere what's 
this occupation likely er what's going to happen to it in the future are there 
insecurities in this job so in addition to obviously calculating using the 
Ogden tables do be aware of the Smith and Manchester awards if you go into 
practice in this area you'll certainly be looking at the s-, er Smith and 
Manchester type of claim so you need to be aware of its existence now we said 
that in terms of pecuniary loss the major part of the compensation of course 
comes from loss of earnings so that is by far the bulk and we said yesterday as 
well that if you have a high earning plaintiff of course that plaintiff's 
damages are going to be quite large compared to 
somebody who's maybe not in employment or is not earning too much money but 
there is another type of claim that can be latched on to this general loss of 
earnings and pain and suffering which we mentioned yesterday and this is a 
rather unusual type of claim which we call the loss of life expectancy this is 
at point seven-four on your handouts now again a difficult issue to assess what 
we're trying to compensate for here is something called the claim for the lost 
years this is what this is known as in other words we try to look at what was 
the expectation of life before the accident now clearly certain injuries are 
going to be quite serious and ha-, will have an impact on life expectancy of 
the plaintiff and this is what we're dealing with here those lost years that 
arise out of a serious injury and in nineteen-eighty in the judgement of Picket 
against B-R Engineering the House of Lords did look at this question of the 
lost years the loss of life expectancy and 
they held importantly that the plaintiff could claim for loss of ye-, earnings 
for those years which he had lost as a result of the accident in other words 
you can claim for years in which you would have been working but you have died 
earlier than you would have done as a result of the injury so you are assuming 
of course that the plaintiff has lived his life to the full and you calculate 
damages for those lost years the one part however that will be deducted from 
this calculation for loss of life expectancy lost years is any money that the 
plaintiff may have spent on his or her own maintenance so again an important 
decision our plaintiff has lost a certain amount of life as a result of the 
injury is going to die earlier than he or she would have done but we ignore 
that factor and we allow the plaintiff to claim for loss of earnings in that 
period after death until presumed retirement sixty-five but as i said do note a 
deduction for maintenance cost personal 
maintenance costs and those are taken on board in the calculation now of course 
loss of life expectancy will only really apply to plaintiffs who are injured 
quite seriously and will probably die earlier than if the injury had not 
occurred something that is more usual in terms of compensation most people will 
claim something under this heading is medical and other nursing expenses 
basically the plaintiff can claim for reasonable expenses under this heading of 
medical and nursing costs obviously these expenses should have er resulted from 
the injury with which we're concerned and they can include not only medical 
charges but also expenses incurred in travelling for example to hospital to 
receive treatment but they must be related to the accident fairly common sense 
there but you can claim for medical care and importantly you can claim for 
private medical care and this was introduced quite early on in the nineteen-
forty-eight act which you have 
on your outline the Law Reform Personal Injuries Act under section two-four Law 
Reform Personal Injuries Act of nineteen-forty-eight section two-four stated 
that a plaintiff could charge from private medical er expenses and recover them 
despite the existence of the N-H-S so quite an important development there that 
you're not restricted to using N-H-S hospitals you can actually go for private 
hospitals pri-, and use private medicine and the act covers you for that 
however in nineteen-eighty-two an additional statute came in to effect which is 
the Administration of Justice Act the Administration of Justice Act of nineteen-
eighty-two and this stated that if a saving had been made because an individual 
chose to go to at the public's expense to use an N-H ho-, S hospital for 
example then these savings should be set off against the loss of income so if a 
saving is made by an individual because they were ma-, maintained at public 
expense for example in a 
hospital then the act tells us such savings must be set off against the loss of 
income now of course if you are suffering an injury you're not only er going to 
need to look at the issue of medical expenses there may be quite a lot of 
additional expenses for which you would want to claim and again these other 
pecuniary expenses can be added to the er claim there's nothing wrong with no-, 
er adding dow-, er noting on on your claim form a number of additional losses 
as long as they are reasonably incurred so for example cost of medicine and 
prescription charges will be covered if they're reasonable you might for 
example need to have provisional special medical equipment for example a 
wheelchair that is also covered in serious cases you might be required to adapt 
your home to introduce for example some form of lift and again the cost of such 
adaptation of the home will be covered under this heading of pecuniary losses 
you might actually need to seek alternative 
accommodation that's quite possible maybe the house you're in which you're in 
two storeys three storeys you can't cope with it as a result of your disability 
and you you may have to move or to alter it again if it's reasonable that is 
covered under this heading one point to note however just on this point about 
alterations if a party does alter the house and this is quite reasonable but it 
increases the value of the home then you do need to give credit for this 
increase in value and that makes this calculation quite difficult so if you 
alter your home and that's quite reasonable in view of your injury but it 
increases the value then you do need to give account for it the plaintiff does 
have to give credit for this value this increase in value finally under this 
heading of other pecuniary losses you might er have future costs of care so if 
you have care at home for example you might need to get nursing care then you 
can also recover for these future costs of 
care at home as long as again they are reasonable now clearly that would mean 
if you had specialist nurses coming into your home to look after you then you 
can charge for that under this claim you can add it to your claim but most 
people probably choose not to do that to have nurses may opt rather to have a 
member of the family looking after them so what happens if instead of a nurse a 
fully qualified nurse you have a member of your family choosing to look after 
you can you claim anything for them well yes you can the plaintiff is entitled 
to recover the proper and reasonable cost of supplying those needs so the 
plaintiff is entitled where a family member's looking after them to recover the 
proper and reasonable cost of supplying the needs so for example if a relative 
does have to give up work and will obviously lose out in terms of their earning 
capacity then those loss of earnings are recoverable provided they're not 
excessive and go well beyond 
what it would cost to have nursing care so if your member of your family does 
give up work you can claim for loss of those earnings as long as they don't 
exceed the commercial cost of nursing care and you'll see on the sheet there is 
a case dealing with that and that's the case of Housecroft against Burnett 
nineteen-eighty-six decision which looked at this issue okay so that's the the 
main heads of damages that we've covered we saw that there were special damages 
and general damages special being the easier part to calculate general being 
more difficult because it was looking at post-trial we've seen that there's a 
pecuniary loss as well as non-pecuniary loss and of course pecuniary loss was 
mainly loss of earnings whereas non-pecuniary loss we were looking at such 
matters loss of amenity pain and suffering which we saw were quite difficult to 
calculate now that's all very well you might think well that's the end of the 
story in terms of calculation but in fact it is not 
because most injured parties waiting for trial waiting for their settlement 
will be receiving some form of benefit from the state and we now get into quite 
a a nasty area if you like of the law the Conservative government introduced a 
piece of legislation in nineteen-eighty-nine called the Social Security Act to 
look into this issue or deal with the er the question of benefits what do you 
do when a party is receiving benefits from the state do you take back those 
benefits from that party from their compensation award or not and as i said in 
nineteen-eighty-nine the Conservative government introduced quite a contentious 
piece of legislation which had severe effects on a number of plaintiffs 
basically what they said in this er statute was that a certain percentage of 
the benefits most of the benefits would be clawed back by the state out of the 
compensation award so the plaintiff might anticipate a certain amount of money 
say twenty-thousand pounds but had received ten-thousand 
pounds in benefits under this statute the state had the right to take back 
those benefits from the party claw them back to the state coffers and of course 
that meant in a lot of cases that the plaintiff was left either with very 
little money in my example ten-thousand pounds or none at all and as you know 
from from your first seminar when we were looking at how long it takes for 
cases to get to court we saw that often plaintiffs have been waiting for ages 
before they can actually get redress and compensation so they might have quite 
a few years of benefits and that mounts up and the state had the right under 
this act to claw them back so let's just take some examples of the impact of 
clawback these are very sort of basic overviews of what happened but gives you 
an idea of what we're talking about so under the nineteen-eighty-nine act and 
prior to ninety-seven because we'll see in a moment the legislation has changed 
again this is what 
occurred let's say our pain-, plaintiff had fifty-thousand in damages everyone 
see that fifty-thousand pounds and of s-, let's assume that the benefits 
equalled fifteen now we're just making a very straightforward er calculation 
here that fifty minus fifteen of course is thirty-five-thousand but this did 
not all go to our plaintiff what happened was that that fifteen-thousand of the 
benefits was clawed back to a special agency called the Compensation Recovery 
Unit so even though our plaintiff has quite a substantial award in the damages 
he will only receive this smaller amount and this is of course paid by the 
defendant to the plaintiff now that's a very straightforward example the 
situation worsens of course if the plaintiff is found to be contributorily 
negligent so for example if our plaintiff has been awarded twenty-thousand 
pounds in damages and there's quite a large reduction for contributory 
negligence and a r-, a receipt of benefits of ten-thousand pounds 
then of course our poor old plaintiff has lost out fifty per cent already has 
ten-thousand in terms of the damages and the benefits go to the C-R-U so will 
be left with zero the only situation where there was a slight difference in the 
calculation was where a plaintiff actually received an award that was below two-
and-a-half-thousand so and everything above two-and-a-half-thousand the C-R-U 
was entitled to claw back the full amount of the benefits less than two-and-a-
half-thousand they halved the benefits that they were taking back so for 
example let's assume instead of a higher amount our plaintiff is awarded two-
thousand pounds so he's below that two-thousand-five-hundred threshold and has 
received one-and-a-half-thousand in benefits prior to the settlement of two-
thousand instead of the C-R-U taking all of that as we saw previously they take 
the full amount they actually halved that amount because we're dealing here 
with such small amounts 
so one-thousand-five-hundred doesn't go to the C-R-U instead seven-hundred-and-
fifty pounds half of the amount of benefit goes to the C-R-U and our plaintiff 
is given one-thousand- two-hundred-and-fifty so that basically was the 
situation prior to nineteen-ninety-seven following the nineteen- er - eighty-
nine act that anything above two-and-a-half-thousand they would claw back the 
full amount of the benefits and the plaintiff would have to get whatever was 
left how s-, ever small below that slightly different you only halve the 
benefits because of the small amounts that we're talking about here now what 
happened and we'll see in a moment we'll have a videos er the impact was quite 
severe the plaintiffs were often bullied by insurance companies into accepting 
two-and-a-half-thousand as a settlement figure because they had had so much in 
terms of benefits that it really wasn't worth the effort of trying to pursue 
the defendant to get as large a claim as 
possible they knew they would lose a large proportion in terms of benefit and 
we'll see in a moment that a number of plaintiffs were forced into accepting 
two-and-a-half-thousand pounds as a result so i'm now going to show you just a 
very quick clip o-, in the video and you'll see the impact of this legislation 
and then we'll talk about what the changes were introduced by the Labour 
government in nineteen-ninety-seven 
nm1151: so you can see f-, quite clearly i think from from that short clip the 
impact and the quite serious impact that the legislation did have on victims 
and also i hope you understood the point about the two-and-a-half-thousand that 
they were offering basically obviously if the claim was er er say thirty-
thousand as er the example given in the the video she was going to lose a 
substantial or most of that amount from the claim then what was happening was 
that insurance companies were offering this figure of two-and-a-half-thousand 
which was unaffected so basically 
lots of cases were settled in this quite desi-, derisory amount if you take 
into account the actual value of some of the claims i think she said originally 
it was quoted at being fifty-thousand pounds the solicitor suggested that she 
would get thirty-thousand and all of that was going to go in the benefits in 
any case so pressure as indicated from insurance companies to accept the 
minimum that would be unaffected and that was the two-and-a-half-thousand 
pounds so quite a few people were settling for this amount because they were 
really unsure as to the amount they would get i mean the solicitor may have got 
it wrong and maybe that was bad advice you know maybe they should have pushed 
for the fifty-thousand pounds and in that case they would have they would have 
got twenty-thousand we can assume but also do note as the film said you would 
still have your benefits deducted if it had been appealed and again that was a 
second negative thing about the legislation that if you were er the 
the case was appealed then you were still having benefits and they could still 
be deducted so quite substantial losses in some cases in its manifesto though 
the Labour Party did say as a result of the er petitions that it would change 
this legislation and fortunately it did do so in ninety-sev nineteen-ninety-
seven and you'll see on your handout at eight the name of the act was The 
Social Security Recovery of Benefits Act of ninety-seven which came into force 
from October nineteen-ninety-seven and there are also associated regulations 
with the statute now the important difference between this act and the previous 
nineteen-eighty-nine act is that general damages are said to be ring fenced so 
this er important word ring fencing and that effectively means we're going back 
really to a pre-nineteen-eighty-nine position in that parts of the general 
damages are protected that they cannot be targeted in terms of de-, er 
deducting these benefits so that benefits must be set off 
against certain heads of special damages so ring fencing means there's a 
protection for some of the general damages and if you do have benefit then you 
take them off certain heads of the special damages and you're left really with 
a large part of your general damages as a result being intact and if you 
remember in the clip there was a a graph shown as to the pre-nineteen-eighty-
nine position that you've got a smaller part of the compensation in general 
damages being affected that's effectively what's happening here so let's take 
an example to explain the difference between the nineteen-eighty-nine 
legislation where we saw most of the benefits coming off and this new act let's 
assume first of all that our de-, general damages are five-thousand pounds 
pretrial loss of earnings le-, we will have a figure of fifteen-thousand 
[cough] past care costs let's assume are five-thousand so that's a bit of nu-, 
nursing costs th-, those types of expenses which we mentioned earlier and that 
there 
may be er loss in the future as a result of this injury in terms of maybe er 
alterations et cetera issues arising as a result of the injury this totals 
surprise surprise fifty-thousand pounds and the benefits received let's assume 
a c-, incapacity benefit of twelve-and-a-half and attendance allowance of seven-
and-a-half doesn't matter really what these benefits are we're just giving some 
form of figure to the benefits so in total our benefits are twenty-thousand 
pounds [cough] basically we set off against certain heads of damage and twelve-
and-a-half-thousand can be set off against loss of earnings and the statute 
tells us which er benefits are set off against which heads so incapacity we are 
told is set off against loss of earnings whereas attendance allowance is 
actually set off against the past care costs now if we look at past care we see 
that we've only got five-thousand pounds under past care but we're told under 
the legislation we can only set off against past care costs so in in fact 
we can only set off against five-thousand pounds effectively then we've made a 
gain in terms of benefits because the total of course that we can set off is 
twelve-and-a-half plus five-thousand which means the total we're settling off 
is seventeen- and-a-half-thousand okay so the legislation tells us which parts 
of the damages awards can be affected and in the case of incapacity it's loss 
of earnings in the case of attendance allowance it's past care and fortunately 
here we've actually got a smaller figure so we've we've done a little bit 
better by the setting off in any case [cough] as a result then what happens is 
that our defendant is required to pay fifty-thousand minus the set off which is 
thirty-two-and-a-half-thousand to the plaintiff and the total that he has 
actually got in benefits there is twenty-thousand so the defendant still has to 
pay twenty-thousand to the state so what has happened effectively by this is 
we've protected 
parts of our plaintiff's claim he does better than he would have done under the 
previous legislation because we can't set everything off as we've seen here the 
defendant in fact ends up paying more money as a result so he's paid here fifty-
two- and-a-half-thousand in total for a claim which is worth fifty so rather 
than targeting the plaintiff and making the plaintiff suffer a little bit more 
under this legislation we're protecting the plaintiff a little bit and asking 
the defendant to pay more money so in the end a better piece of legislation and 
more pro plaintiff okay are there any questions in relation to what we've done 
today i'm sorry if you couldn't understand the language in the video hope you 
got through the accents on that okay thanks very much