THE CARPENTER DECISION: THE BASIC PRINCIPLES: FAIR DAMAGES “NOT A PENNY MORE BUT NOT A PENNY LESS”
I have written before about how judges regularly go back to the basic principles of damages when faced with challenging issues in relation to personal injury damages. To a large extent this happened in the Court of Appeal decision in Swift -v- Carpenter  EWCA Civ 1295. Inevitably most discussions of the case will concentrate upon the practical outcome and complex calculation that now has to be done. However the case is also important because it discusses the basic aim of personal injury damages.
“the only principle of law is that the claimant should receive full compensation for the loss which he has suffered as a result of the defendants tort, not a penny more but not a penny less.”
THE JUDGMENT ON THIS ISSUE
Lord Justice Irwin considered this point:-
Lord Hope emphasised that –
“the assessment of damages is not an exact science – that all the law can do is to work out as best it can, in a rough and ready way, the sum to be paid to the plaintiff as compensation…. Nevertheless, the object of the award of damages for future expenditure is to place the injured party as nearly as possible in the same financial position as he or she would have been in the accident. The aim is to award such a sum of money as will amount to no more, and at the same time no less than the net loss….” [Page 389F/390B]
Lord Clyde restated that the –
“purpose of the award for an injured plaintiff is, in so far as the sum of money can do so, to put him as nearly as possible in the same position as he was in before he was injured…. The accumulation of precedent and experience in the careful analysis of the nature and effects of particular injuries can go a long way towards establishing levels of award which may be generally recognised and accepted as reasonable in particular circumstances. If necessary those levels may be open to adjustment or even correction from time to time by those courts which are best qualified to review what must in essence be a factual assessment of the kind sometimes referred to as a jury question. In relation to future pecuniary losses and expenses the uncertainties in the calculation are at their most severe. Here particularly means have been devised to minimise the imprecision. But despite the development of detailed tables and actuarial calculations there will always remain an element of uncertainty in prediction which may only in a rough and ready way satisfy the desire that justice should be done between both parties. The problem of sufficiently providing for the future care of the very severely disabled plaintiff gives rise to particular concern, since any inadequacy of the award in that respect could be particularly serious.” [Page 394D/G]….
The Parties’ Submissions
The Appellant’s starting point is that the fundamental principle of law is that of full and fair compensation for injury. A claimant is entitled to damages which place her as closely as possible in the position that she would have been, absent her injury. The Appellant acknowledges that should not mean overcompensation, where that can be achieved.
Mr Sweeting QC emphasises that since Roberts v Johnstone and Wells v Wells, there are judicial dicta at the highest level making it clear that fair and reasonable compensation must be “full” compensation for a claimant. He cites in particular Lord Hope in Longden v British Coal Corporation  AC 653, himself quoting Dixon CJ:
“The principle is that the plaintiff must be compensated but no more than compensated, for his loss. As Dixon CJ indicated in the High Court of Australia in National Insurance Co of New Zealand Ltd v Espagne (1961) 105 CLR 569, 572 not much assistance is to be found in contemplating the supposed injustice to the wrongdoer. The concern of the court is to see that the victim is properly compensated. There must, of course, be no element of double recovery for the same tort.” [p670D/E].
He also cites Baroness Hale in Simon v Helmot  UKPC 5, at paragraph 60 where she said: “the only principle of law is that the claimant should receive full compensation for the loss which he has suffered as a result of the defendants tort, not a penny more but not a penny less.”
LORD JUSTICE UNDERHILL
This issue was also considered by Lord Justice Underhill:-
That point has given me some pause. But I have come to the conclusion that it represents too rigid an approach. The piecemeal development of law and practice in this field makes it very difficult to be a purist; a strong element of pragmatism and practical justice is required. An award of damages for personal injury contains a number of elements of different characters. The award for pain, suffering and loss of amenity does not represent pecuniary loss at all. The award for pecuniary loss comprises both loss of earnings and compensation for expenditure necessitated by the injury. As regards the latter, the modern process of assessing the elements in the award systematically and separately under each head of loss is a valuable discipline, but it should not mislead us into thinking that the end result is anything but a best estimate or that in the real world claimants will spend the sums awarded precisely in accordance with the assumptions on which they are assessed; and of course, as Lambert J points out at para. 136 of her judgment (quoted by Irwin LJ at para. 18), that is not even possible where there is a deduction for contributory negligence or the parties reach a compromise. In that context, I do not think that it is unacceptable in principle that, in order to avoid over-compensation, claimants should have to use part of the sum assessed under other heads to fund (in cash-flow terms) the additional element in their accommodation needs. And in fact Mr Sweeting QC only advanced the contrary submission in a highly qualified form, describing it as “not quite a fallback”. His position was that if there was no viable mechanism which provided the Appellant with some compensation for her accommodation loss while avoiding a windfall – so that the choice was between her receiving nothing and her receiving the full cost of the additional element – then the Court must take the latter option. He did indeed point out that the scope for “robbing Peter to pay Paul” (Tomlinson LJ’s phrase from Manna) had become more limited in recent years as the level of awards in respect of accommodation had risen much faster (as a result of increases in property prices) than the level of awards for pain, suffering and loss of amenity, and many elements in future loss were covered by periodical payments; but that is a different kind of point.
I should add that I am not sure that it would even be open to us as a matter of authority to hold that robbing Peter to pay Paul (in that sense) is wrong in principle. As Lambert J points out in the passage already referred to, a degree of “scavenging from damages allocated to other losses” was inherent in Roberts v Johnstone from the start. (The same is true of George v Pinnock.) Although we are holding that we are free to depart from Roberts v Johnstone, that is because of the changes in economic conditions since it was decided, which mean that a claimant would now receive no award whatsoever in respect of their accommodation needs: it is debatable whether that justifies us in going behind the Court’s assumption, which was necessary to its reasoning, that it was acceptable for the plaintiff to have to fund the capital cost of the accommodation out of other elements in the damages.
WEBINAR – 22nd OCTOBER
APIL is presenting a webinar on Swift -v- Carpenter on the 22nd October 2020. Details are available here.