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THE LAW COMMISSION

DAMAGES FOR PERSONAL INJURY:
MEDICAL, NURSING AND OTHER EXPENSES

CONTENTS

Paragraphs Page

PART I: INTRODUCTION 1.1-1.7 1

PART II: THE PRESENT LAW 2.1-2.83 4

1. MEDICAL AND NURSING EXPENSES AND OTHER
COSTS OF CARE

2.2-2.38 4

(1) The General Position 2.2-2.4 4

(2) Section 2(4) of the Law Reform (Personal Injuries) Act 1948 2.5-2.15 6
(a) The statutory wording 2.5 6
(b) Legislative history 2.6-2.8 7
(c) Empirical evidence 2.9 8
(d) The case law 2.10-2.14 8
(e) Road Traffic Act 1988, sections 157-158 2.15 10

(3) Care provided free of charge to the plaintiff by relations or
other private parties

2.16-2.36 11

(a) Who suffers the loss? 2.21-2.29 12
(b) Care provided by defendant 2.30-2.32 15
(c) The quantum of damages 2.33-2.36 17

(4) Loss of the plaintiff’s ability to do work in the home 2.37 19

(5) Hospital visits 2.38 20

2. THE PLAINTIFF’S ACCOMMODATION 2.39-2.47 20

3. THE MANAGEMENT OF THE PLAINTIFF’S AFFAIRS 2.48-2.52 24

(1) Court of Protection 2.48-2.51 24

(2) Financial advisers’ fees 2.52 25

4. OTHER EXPENSES 2.53-2.58 26

(1) Aids and appliances 2.54 26

(2) Cost of a car 2.55-2.56 26

(3) Holidays 2.57 27

(4) Other items 2.58 27

5. LOSSES ARISING OUT OF THE PLAINTIFF’S DIVORCE 2.59-2.63 28

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Paragraphs Page

6. THE MULTIPLIER 2.64-2.74 29

(1) The multiplier approach 2.64-2.65 29

(2) Period of expense 2.66 30

(3) The traditional rate of discount 2.67 31

(4) The multiplier method - our critique 2.68 31

(5) The recent legislation 2.69 32

(6) The Court of Appeal’s reaffirmation of the traditional
approach

2.70-2.74 32

7. INTEREST ON DAMAGES FOR PECUNIARY LOSS 2.75-2.83 34

PART III: OPTIONS FOR REFORM 3.1-3.118 39

1. MEDICAL AND NURSING EXPENSES AND OTHER
COSTS OF CARE

3.2-3.80 39

(1) Section 2(4) of the Law Reform (Personal Injuries) Act 1948 3.2-3.18 39
(a) Duty to mitigate 3.7-3.9 40
(b) Plaintiff using NHS facilities having obtained damages for
private medical expenses

3.10-3.13 41

(c) Insurance and cost 3.14-3.18 42

(2) Recoupment of costs by the National Health Service 3.19-3.42 44
(a) Introduction 3.19-3.20 44
(b) The argument of principle 3.21 45
(c) Analogies 3.22-3.24 45
(d) Some possible policy or practical objections to recoupment 3.25-3.35 46

(i) “Taking with one hand to give back with the other”? 3.25-3.27 46
(ii) Cost of recoupment 3.28-3.30 47
(iii) Costing NHS treatment 3.31-3.33 49
(iv) Hindering settlements 3.34 50
(v) Encouraging unnecessary treatment 3.35 50

(e) What form should the recoupment scheme take? 3.36-3.42 50

(3) Care provided free of charge to the plaintiff by relations or
other private individuals

3.43-3.72 56

(a) The general position 3.43-3.58 56
(b) Care provided by the defendant 3.59-3.68 62
(c) The quantum of damages 3.69-3.72 66

(4) Loss of the plaintiff’s ability to do work in the home 3.73-3.78 68

(5) Hospital visits 3.79-3.80 70

2. THE PLAINTIFF’S ACCOMMODATION 3.81-3.97 71

(1) Purchase of suitable accommodation 3.81-3.91 71
(a) The basic approach 3.81-3.84 71
(b) The appropriate rate 3.85-3.89 72
(c) Accommodation purchased by persons other than the plaintiff 3.90-3.91 74

(2) The cost of alterations 3.92-3.97 76
(a) Alterations enhancing value 3.93-3.96 76
(b) Alterations not enhancing value 3.97 78

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3.55 We provisionally recommend: (a) that the availability of damages in
respect of care provided gratuitously to the plaintiff is justified in order to
permit the carer to be remunerated for his or her services, and should
continue; and (b) that accordingly either (i) the plaintiff should hold
those damages on trust for the providers of past and future care or (ii) a
personal obligation should be imposed on the plaintiff to account to the
providers of past and future care for those damages. We invite consultees
to say whether they agree with this provisional view and, if so, which of
the two approaches (if either) they support. We would be particularly
interested to hear whether any problems have been experienced in
practice with the “trust” approach.

3.56 Another much more radical possibility, which would fulfil the primary goal of
remunerating the carer, would be to confer a right of action on the carer enabling
him or her to recover the cost of providing the care direct from the defendant.103

This would have the virtue of permitting the carer to claim the value of his or her
services without the necessity of an arguably contrived mechanism such as a trust
or an obligation to act as a conduit for the damages. A direct action would
involve the cost of another tier of litigation; and there may be difficulties in
working out a satisfactory relationship between the rights enjoyed by the carer
and those enjoyed by the plaintiff.104 We are also very mindful that the granting of
a direct right of action in tort would offend against the general principle that a
plaintiff should not be entitled to recover damages in the tort of negligence for
pure economic loss which he or she suffers as a result of physical damage caused
to a third party.105 However, it can be counter-argued that the main argument
justifying this general rule, that to allow recovery of such pure economic loss
would lead to liability to an infinitely wide class of potential plaintiffs (in other
words, open the “floodgates” of litigation) does not apply in this context, because
the number of potential carers in relation to any one victim of personal injury is
usually very small.

3.57 In some jurisdictions, carers do have direct rights against the tortfeasor, usually
through the “traditional” actions for loss of consortium and services.106 Those
actions are essentially the same as the action per quod consortium et servitium amisit,
which existed in England until its abolition by the Administration of Justice Act

Lordships realising it. The only consolation is that the decision may be
sufficiently inadequate to invoke prompt legislative action to answer the many
questions left unanswered.

103
See, eg, P Matthews and M Lunney, “A Tortfeasor’s Lot is not a Happy One?” (1995) 58
MLR 395, 400. Note that a restitutionary right of action, based on the discharge of the
defendant’s liability, would be much more difficult to maintain in this sphere than in
respect of ‘recoupment by the NHS’ because the carer here is not acting under legal
compulsion; see para 3.21 above.

104
These difficulties led to the recommendation, by the Ontario Law Reform Commission,
of the abolition of carers’ direct rights in that jurisdiction, in favour of a trust structure
akin to the one adopted in Hunt v Severs. See paras 3.57 and A.63 below.

105
See, eg, Winfield and Jolowicz on Tort (14th ed 1994) pp 93-102.

106
Eg in Ireland and some jurisdictions in Australia and Canada. See, respectively, paras
A.22, A.41 and A.63 below.

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1982,107 and enabled a husband to claim damages from a tortfeasor in respect of
the loss of the society (consortium) and services of his wife, and a parent in
respect of the loss of services of a child. Reciprocal rights did not exist, in
England, for wives to claim in respect of the loss of a husband’s services, or a
child in respect of a parent’s, although the right to claim has been conferred on
wives in some jurisdictions.108 Such rights sometimes exist concurrently with
rights for injured plaintiffs to recover the cost of care. Under the Ontario Family
Law Act 1990,109 certain relatives have the right to recover costs of care and other
expenses direct from the defendant. This right, however, exists concurrently with
the plaintiff’s right to claim in respect of the same services.

3.58 We ask consultees whether, instead of or in addition to the injured
victim’s claim, they would support reform which would enable the carer
to make a direct claim against the tortfeasor (or other legal wrongdoer).

(b) Care provided by the defendant

3.59 It has been seen that the House of Lords in Hunt v Severs moved from the
premise that the plaintiff in a “gratuitous care” case should recover damages but
hold them on trust for the carer, to the conclusion that where the defendant is
the carer no damages should be recovered because, if they were recoverable, they
would be recovered from and held in trust for the same person.110 The decision
that no damages are recoverable from the defendant carer has been criticised on
a number of grounds.111 In David Kemp QC’s words: “Though the logic of their
Lordships’ decision may be impeccable, it is doubtful how far it serves the
interest of public policy.”112 In particular:

3.60 (i) It still remains possible for a plaintiff and defendant, placed in the position
of the plaintiff and defendant in Hunt v Severs, to enter into an agreement under
which the defendant will provide the requisite care for money. Provided that this
contract is not a sham, it was apparently accepted by the House of Lords that the
plaintiff can recover the sums payable under that contract. The decision in Hunt
v Severs therefore encourages defendant carers and plaintiffs to enter into
contracts for the carers’ services: indeed it has been suggested that failure, on the

107
Administration of Justice Act 1982, s 2.

108
Eg South Australia and Queensland: see para A.41 below. The Irish Law Reform
Commission has recommended the extension of the right to make a consortium claim to
wives and siblings: see para A.22 below.

109
Section 61(2)(d). This provision was originally contained in the Family Law Reform Act
1978. The Ontario Law Reform Commission recommended the abolition of the direct
right in 1987, but the recommendation was not acted on: Report on Compensation for
Personal Injuries and Death (1987) pp 149-152. See para A.63 and n 193 below.

110
See paras 2.30-2.32 above.

111
See, eg, D Kemp, “Voluntary Services Provided by Tortfeasor to his Victim” (1994) 110
LQR 524; L C H Hoyano, “The Dutiful Tortfeasor in the House of Lords” [1995] Tort L
Rev 63, 69; A Reed, “A Commentary on Hunt v Severs” (1995) OJLS 133, 137-138; P
Matthews and M Lunney, “A Tortfeasor’s Lot is not a Happy One?” (1995) 58 MLR 395,
399.

112
Kemp, op cit, 526.

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subrogation for private insurers are generally left to the individual contracts of
insurance.

A.82 Pursuing individual actions for recoupment involves additional costs which may
discourage the social security carrier from bringing subrogated claims, especially
where the amounts involved are not substantial. In some countries which provide
for recoupment through subrogation, standard loss-sharing agreements exist
between social security organisations and liability insurers for reimbursement of a
fixed percentage of the expenses paid.234 Some countries also operate systems
which attempt to internalise the social costs of higher-risk but necessary
activities, such as motoring, either in addition to235 or as a replacement for236

rights of subrogation.

A.83 Where the injured person is hospitalised, some of the expenses which he or she
would normally incur are met as part of the care rendered. In some European
countries, as in England, a deduction, of an amount representing those living
expenses, is made from any damages awarded for hospital care including, where
appropriate, from damages for anticipated future hospitalisation.237

Gratuitous care and expenses incurred by third parties

A.84 Where gratuitous care has been or will be rendered to the plaintiff by relatives or
friends, he or she will nonetheless usually be able to recover damages for the cost
of care.238 Such gratuitous care is regarded as a non-deductible collateral benefit.
The plaintiff usually has no duty to account to the third party for the damages, so

schemes are assessed in accordance with tort rules. The policy against subrogation
apparently stems from a desire to avoid the transaction costs involved in shifting loss
between two large and substantially identical groups. See W Pfennigstorf (ed), Personal
Injury Compensation (1993) p 202.

234
Eg Germany, where a typical agreement might provide for the liability insurer to

reimburse 55% of all claims, without further investigation of the issue of fault. But usually
the agreement will only apply to claims for amounts below a certain level, typically
DM30,000. See further W Pfennigstorf (ed), Personal Injury Compensation (1993) p 72. A
similar system exists in Switzerland, and is also proposed in Belgium.

235
In some cases, liability cannot be satisfactorily allocated and subrogation is therefore

ineffective to recover all the costs of the activity. In Belgium, for example, where
subrogated claims are common, a substantial tax is also levied on motor insurance
premiums to represent ‘social costs.’ See further W Pfennigstorf (ed), Personal Injury
Compensation (1993) pp 15, 203.

236
In Italy, which operates a limited system of subrogation, the regioni (local units of the

national health service) waive their right to reimbursement of medical costs in road
accident cases, and instead the insurance companies pass on to the State a percentage
(4.45% in 1991) of their income from motor insurance premiums. See further P Szöllösy,
“Recent Trends in the Standard of Compensation for Personal Injury in a European
Context” (1991) 3 Scandinavian Insurance Quarterly 208.

237
In France and Germany, for example, any damages awarded for time spent in hospital are

reduced by a daily amount (FF50 / DM20 in 1993) representing the patient’s savings on
meals. Similar provisions exist in Sweden, Austria, Belgium and Switzerland.

238
This approach is taken in most European countries which allow recovery in tort for the

cost of care, including Germany, the Netherlands and Belgium; France requires the
plaintiff to show a legal obligation to reimburse the third party. Where no damages for the
cost of care would be available, as in Sweden for example, the position is less clear.

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that reimbursement of the third party is left to the plaintiff ’s discretion. In some
countries, the plaintiff will also be able to recover any visiting expenses incurred
by relatives or friends.239

Inability to do work in the home

A.85 Most European countries compensate plaintiffs for their loss with respect to
domestic services, either for their loss of time, or as part of a loss of amenities
claim for loss of their capacity to perform housework. The method of
quantification differs from country to country, but most will allow recovery even
if the plaintiff does not engage paid help, and the services are performed, if at all,
by family or friends.240 In some countries, a claim for loss of a wife’s domestic
services can alternatively form part of a direct claim by the husband, but such
actions, where they still exist, are becoming less popular.241

239
In France and Belgium visiting expenses are recoverable either in the victim’s action or

directly by the third party. The general trend in Europe, however, is to place less emphasis
on the direct action for the relative, and to include all losses and expenses in the damages
recoverable by the plaintiff; in Switzerland, for example, such losses can only be recovered
through the victim’s own action.

240
In Germany, recovery is for the loss of capacity rather than the actual expense incurred in

replacement services. In France and Italy, the plaintiff can recover the actual or
hypothetical cost of household help, calculated with reference to the average wages of a
housekeeper. Swedish courts tend to require proof of extra costs actually incurred by the
family, but the State is obliged to provide home help if this is necessary because of the
plaintiff’s inability to perform housework.

241
In Germany, such an action was possible under Art 845 BGB only for the husband in

respect of his wife’s services, but in 1968 this was held to be in contravention of the
equality provisions of the Gleichberichtigungsgesetz. The solution adopted was to limit the
claim to the injured party in all cases.

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