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termination of contract and physical damage and death...

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Compensatory Damages for Personal Injury and Death Personal Injury Damages  Damages in tort may be either compensatory or non-compensatory Non-compensatory Damages  These damages may be nominal, contemptuous or exemplary  Nominal damages: o awarded for a tort actionable per se ie. where a legal right has been violated but the claimant has suffered an actual loss o awarded for the wrong itself rather than the loss suffered o amount awarded will be small o the fact that nominal damages have been awarded does not mean that the claimant should be regarded as a successful claimant for the purposes of costs  Contemptuous damages: o Awarded in defamation cases o Consist of an award of the least valuable coin of the realm  Exemplary damages: o Awarded in addition to compensatory damages o Punitive in intent to punish the defendant for their conduct o Where the claimant has suffered no damage, exemplary damages cannot be awarded  Damages may be awarded by a court when a public authority has acted in a way which is incompatible with a Convention right Compensatory Damages  The basis of an award of compensatory damages is that the claimant should be awarded such a sum as will, nearly as possible, put them in the position they would have been in if they had not sustained the injuries  Damages will usually be awarded on a once and forever basis in the form of a lump sum Classification of Damages  Damages are awarded for pecuniary and non-pecuniary losses.  Pecuniary damages are those that can be estimated in monetary terms o These awards are Special Damages;  losses calculated from accident to trial including damaged objects (clothing etc) loss of earnings to trial;  medical expenses to trial;  services of third parties to trial o expenses incurred living with disability to trial.  Non-pecuniary damages cover intangibles o These awards are General Damages:  pain, suffering and loss of amenity;  handicap in the labour market;  loss of earnings after trial;  future care costs, lost pension and miscellaneous extras. Pecuniary Losses- Loss of earnings  damages for loss of earnings come in 2 categories:  special damages: o loss of earnings suffered by the claimant before the trial – this constitutes an actual ascertainable amount o the claimant must show what their net loss has been as a result of their injury  general damages: o future loss of earnings ie. from the trial onwards o This causes problems as it requires establishing what the claimant would have earned had the accident not occurred hence the use of actuarial accounting methods.

Multiplier and Multiplicand  Multiplier is the actuarial figure arrived at by calculation which allocates a number to represent future years eg a 30 year old man has a multiplier between 15/16 years; child of 7; 5 (Croke v Wiseman [1981]).  Multiplicand is gross salary less tax and National Insurance.  Multiply these 2 figures to get net future loss of earnings.  Multiplicand v Multiplier = future loss of earnings  Special damages, the salary lost to trial now also added to total  The objective of this, is that the claimant should receive a sum, which when invested will produce a figure equal to the lost sum CASE: Croke v Wiseman [1982] o Court used the national average wage to calculate the child’s loss of future earnings

CASE: Smith v Manchester City Other pecuniary losses Council [1974]  Claimant can recover any expenses reasonably incurred as a result o court awarded of treatment of their injuries, including medical expenses damages for the  Th claimant has the choice as to whether they are treated potential loss to privately or not the plaintiff from  If the claimant is treated by the NHS, the living expenses which the plaintiff’s they save are set off against their loss of earnings reduced earning capacity, equivalent to the CASE: Hunt v Severs [1994] loss of her o Held: awards made for voluntary care for the purpose of compensating the voluntary carer competitive position in the labour market Non-pecuniary losses  Loss of amenity o Claimant may recover damages for the injury itself and any subsequent inability to enjoy life o These damages are calculated on an objective basis and do not take into account the claimant’s inability to appreciate the disability o Unconscious claimants may recover loss of amenity CASE: West v Shepherd [1962] o Held: the objective test for loss of amenity stated you may recover damages even if the claimant is unconscious

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Pain and suffering o The court will award damages for any pain and suffering which can be attributed to the injury itself and to any consequential surgical operations o Damages for bereavement are only awarded in actions under the Fatal Accidents Act 1976 to certain classes of dependents o No damages can be awarded for grief and sorrow CASE: Hinz v Berry [1970] o Mrs Hinz was entitled to recover as she had demonstrated a recognised psychiatric condition as opposed to feelings of grief and sorrow

Deductions  A victim of an accident may be in receipt of money from sources other than tort damages.  As the objective of the damages award is to compensate the claimant for losses incurred as a result of their injury, it is necessary for the courts to work out to what extent these other sources must be set off against damages.  The claimant may be entitled to state benefits as a result of their injuries and may also have private insurance or become entitled to payments by their employer. CASE: Parry v Cleaver [1970] o The plaintiff policeman was disabled by the negligence of the defendant and received a disablement pension o Part had been contributed by himself and part by his employer

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Social Security (Recovery of Benefits) Act 1997. o Certain social security payments can be recouped by the Department of Social Security. o The compensator (who will normally be an insurance company) must pay benefits received by the claimant before a compensation payment is made. o The system applies to settlements out of court.

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Prior to the 1997 Act, the amount of benefits received was simply deducted from the claimant’s damages. The new approach is to correlate the type of benefit received to the particular head of damages. For example, any benefits to provide for the cost of care can only be deducted from the claimant’s damages for cost of care. Any damages for pain and suffering are effectively protected from recoupment as there is no social security benefit which corresponds to this head.

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Structured settlements  1st part- a lump sum to cover financial losses incurred up to the date of the settlement  2nd part- a pension that will usually last for the remainder of the claimant’s life  This pension covers future losses of income, non-pecuniary losses, medical expenses and the cost of future care  Prior to the coming into force of the Courts Act 2003 ss. 100-101, the court had no power to order a structured settlement, so these were available only where the parties agreed  Under the legislation, the court may make orders for future pecuniary loss to be made in the form of periodical payments  Where this is consent by the parties, the court may make an order under which damages are wholly, or partly, to take the form of periodical payments  A 2nd limitation is that they are only appropriate in connection with future losses, they are not appropriate to past losses  The damages must be large enough to justify using a structured settlement – at present, cases must be worth at least £50,000 to make it worthwhile

Death This is where death is caused by any wrongful act, neglect or default ie. negligent behaviour causing the death of the claimant Common Law Rule  “actio personalis moritur cum persona” - personal actions died with the party therefore, there was no recovery for dependants left behind  now dependents, under the Fatal Accidents Act 1976, and the victim’s estate, under the Law Reform Act 1934 have causes of action against the tortfeasor A statutory (not common law) action for the dependents of the victim  covers the period from death to time of trial, and from the trial into the future 

Fatal Accidents Act 1976 s.1(1): o If death is caused by any wrongful act, neglect or default which is such as would (if death had not ensued) have entitled the person injured to maintain an action and recover damages in respect thereof, the person who would have been liable if death had not ensued shall be liable to an action for damages, notwithstanding the death of the person injured

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Fatal Accidents Act 1976 s.1(2): o every such action shall be for the benefit of the dependents of the person ('the deceased') whose death has been so caused So the action is to recover losses suffered by the dependents only

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Fatal Accidents Act 1976 s.1(3) – Dependent “in law”  (a) the wife or husband or the former wife of husband of the deceased (and registered same sex civil partners or former registered same sex civil partners – S. 83 Civil Partnership Act 2004)  (b) any person who o (i) was living with the deceased in the same household immediately before the date of the death and o (ii) was living with the deceased in the same household for at least two years before that date; and o (iii) was living during the whole of that period as the husband or wife of the deceased o (c) any parent or other ascendant of the deceased o (d) any person who was treated as a parent by the deceased o (e) any child or other descendant of the deceased o (f) any person (not being a child of the deceased) who, in the case of any marriage to which the deceased was at any time a party, was treated by the deceased as a child of the family in relation to that marriage o (g) any person who is, or is the issue of, a brother, sister, uncle or aunt of the deceased Note  s.1 (4) FAA 1976 - “former wife”  s.1 (5) FAA 1976 o affinity equivalent to consanguinity o half-blood treated as whole blood  s. 1(3) (b) does not apply to co-habiting same sex couples. Who may bring an action?  S.2(1) FAA 1976 states: o “the action shall be brought by and in the name of the executor or administrator of the deceased” S.2(2) FAA 1976 states: o The action is a “derivative” action A “Derivative Action” – effect of s.1(1) FAA 1976

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A new right of action under statute (for the dependents) – not a survival of the deceased’s cause of action But S. 1(1) makes the dependent’s claim “derivative” of the claim that the deceased would (but for his death) have had Thus subject to the same limitations and defences that the defendant might have made against the deceased: o E.g. Contributory negligence, ex turpi, volenti o Any settlement reached before death o Any time limits for bringing the claim

What may dependents recover?  Damages for (proven) pecuniary (money) losses  Damages for bereavement  Funeral expenses (if paid by dependents) Dependent’s pecuniary losses  Court calculates a sum of money compensation to provide the dependant(s), proportionately if necessary, with a sum of money (capital sum) - as close as can be made to the amount the deceased would have provided if he had lived  Deductions are made for the money the deceased would have spent on himself (not available to the dependants) – to avoid over-compensation CASE: Davies v Powell Duffryn [1942] o Held: damages under the FAA 1976 are calculated having regard to ‘a balance of gains and losses for the injury sustained by the death’

Fatal Accidents – Damages Calculation 1. Calculate the Multiplicand The NET LOSS to dependants = Multiplicand (base factor to be multiplied) 2. Calculate and apply a Multiplier The estimated NUMBER OF YEARS from the date of death THE DEPENDANT would have received the deceased’s pecuniary support 3. Multiplicand x Multiplier = compensatory damages Simple death damages calculation Victim is 25 with one child aged 2 years: 1. Calculate the Multiplicand Salary £10,000 per annum. deduct £ 2,500 tax, Nat Ins. deduct £ 2,500 pa, victim would spend on himself (the 25% rule of thumb for one child) £ 5,000 NET LOSS to dependents = Multiplicand (base factor to be multiplied) 2. Calculate and apply a Multiplier - dependent is young (2 yrs old) – say multiply by 15. = £5,000 x 15 = £75,000 pecuniary damages CASE: Cookson v Knowles [1979] o Held: that the multipliers in FAA cases should be calculated from the date of death

No lump sum damages - Damages are divided into 2 parts

(i) Loss from death to date of trial - simple calculation - mostly actual earnings – A FACTUAL inquiry (ii) Loss from date of trial to future - Court assesses multiplicand and the appropriate multiplier – A more SPECULATIVE inquiry s.3(3) FAA 1976  The wife’s prospects of re-marriage are not relevant to the damages award Pecuniary (money) losses must be proven by the claimant CASE: Franklin v South Eastern Railway (1858) o Held: the FAA 1846 was not designed to award “speculative” losses

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CASE: Berry v Humm [1915] o Held: loss of value of domestic work counted as loss of support ust arise from lost “dependency”, not a business relationship – s.3 FAA 1976 CASE: Burgess v Florence Nightingale Hospital for Gentlewomen [1955] o held: loss of a commercial dance partner – not recoverable CASE: Maylon v Plummer [1964] o Held: Excess secretarial payment to wife (above commercial rate) was recoverable as it was CASE: Burns v“due Edman [1970] to their relationship” but the commercial element was not recoverable o Held: illegal forms of support cannot be claimed for S.4 FAA 1976 – accruals  “In assessing damages in respect of a person’s death…benefits which have accrued or will or may accrue to a person from his estate or otherwise as a result of his death shall be disregarded.”  Can mean inheritance, premium returns, life assurance and insurance accruals etc. Bereavement damages  s. 1 (A) FAA 1976  Available to: o Spouses and Civil Partners o Parents of legitimate child under 18 o Mother of illegitimate child under 18  The sum of £12,980 (Damages for Bereavement (Variation of Sum) Order 2013 The Estate Action  Recall: “actio personalis moritur cum persona” - Personal actions die with you at common law  This was fine as Dependants protected after 1846 by the FAA  But in 20th Century - The advent of the motor car – and motor car accidents  More often BOTH the TORTFEASOR AND the VICTIM were killed  Important to preserve the action against the tortfeasor 

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s. 1 (1) The Law Reform (Miscellaneous Provisions) Act 1934 o "...on the death of any person...all causes of action subsisting against or vesting in him shall survive against, or as the case may be, for the benefit of, his estate Provided that this subsection shall not apply to the causes of action for defamation". 1 (1) The Law Reform (Miscellaneous Provisions) Act 1934 - Opened up an Estate Action for damages (after death) – the “lost years” The estate may only claim: o (i) Expenses incurred and loss of earnings up to date of death. o (ii) Pain and suffering and loss of amenity up to date of death.  Parents brought a claim against the defendants seeking damages in the respect of the fear and terror their daughters would have suffered prior to death

held that the claimants had failed to prove that either girl suffered before death any injury for which damages fell to be awarded. This decision was affirmed by the Court of Appeal (iii) funeral expenses (if paid by the Estate)  S.1(2) 1934 Act : “[damages] shall be calculated without reference to any loss or gain to his estate consequent on his death” 

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Summary  The main action is for the dependents - damages are for the loss of the period of dependency only  The Estate can only claim for the pre-death period (if any)  Dependency in law must be proven  Dependency in fact and all pecuniary (money) losses must be proven

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The possibility of obtaining a remedy in contract depends on the contract not being properly performed (or discharged) in accordance with its express and implied conditions. When faced with a breach of contract, a claimant will normally seek damages, an order for specific performance or an injunction. All of these remedies involve an enquiry into the nature of the defendant’s conduct.

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However, it is also important for the claimant to know if he is still obliged to perform his contractual obligations despite the defendant’s breach or any flaw in the making of the contract. In certain cases, the claimant will be entitled to withhold his performance of the contract and, if necessary, he may obtain a court order to this effect.

Discharge of contract  A contract may be discharged in 4 ways: 1. By performance 2. By agreement 3. By frustration 4. By breach 1. Discharge by performance  Where both parties to a contract perform their respective obligations under the contract, contractual liability ceases to exist for either party Order of performance: entire and severable obligations  The contract may expressly provide, or be construed by the court to provide, that A must perform the obligation completely before B is obliged to perform. o In these cases, A’s obligation is said to be entire.  Alternatively, A’s obligation may be sub-divided and, as each part of the total obligation is completed, B’s obligation becomes due. o In such a case, the obligations of the parties are described as severable. 

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The distinction between entire and severable obligations raises problems with both the order of performance and with the issue of defective performance. o If A renders a defective performance and subsequently demands payment, whether or not B is obliged to pay will depend on whether A’s obligation is entire or severable. o If it is an entire obligation, B will not be required to pay. o If it is a severable obligation, A may be able to claim payment for those parts of the work correctly performed. Where the contract is one for the delivery of goods by instalment and each instalment is to be separately paid for, the obligation is severable. Short delivery will not justify a refusal to accept future instalments. The strictness of the rule in most sale of goods cases may be explained on the ground that, since delivery and payment are simultaneous obligations, no extension of credit by either party is required. If the court holds an obligation to be entire, this may have a harsh effect on the claimant.

Case Law evidence CASE: Cutter v Powell (1795) o The obligation was found to be entire, and the sailor’s estate was not entitled to collect anything for his services.

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It is said that the rule ‘no completion, no pay’ is intended to give incentive to contracting parties to complete contracts competently and in strict accordance to the terms. However, where, for example, the contract can be construed, not as ‘entire’, but ‘divisible’ into sections, then the apparent harshness of the Cutter decision can be avoided.

Compare CASE: Taylor v Laird (1856) o A captain employed at a wage of £80 per month was entitled to claim payment for the months he worked before he gave up his command in the middle of a voyage because the ‘£80 per month’ term, the contract was construed as divisible or severable into each month’s performance.

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Cases involving payment for building work or other services also raise problems. o If A undertakes to perform work for B and the obligation is entire, B need make no payment for the work until it is completed.

Substantial performance  The principle of “substantial performance” is based on the idea that, where there is only a minor departure from the terms of the contract by one party, the other cannot claim to be discharged from performing her obligations under that contract  She may rely on an action for damages but she cannot terminate ie. she cannot withhold her performance  So where performance is not perfect but is substantia...