Damages

Tort - personal injury - past loss of earnings - claimant receiving social security benefits - no deduction of amount of benefits before calculation of interestWisely v John Fulton (Plumbers) Ltd; Wadey v Surrey County Council: HL (Lord Slynn of Hadley, Lord Woolf MR, Lord Hope of Craighead, Lord Clyde and Lord Millett): 6 April 2000

In both cases, an employee was awarded damages for personal injuries against his employer.

The employees had each received recoverable social security benefits as defined in the Social Security (Recovery of Benefits) Act 1997 which, pursuant to s.17, the court was required to disregard when assessing damages for past loss of earnings although the employer was liable to pay, direct to the Secretary of State, a sum equivalent to the recoverable benefits received and reduce the sum paid to the employee accordingly.

The issue arose whether the recoverable benefits should also be disregarded in calculating interest on the damages.

The First Division of the Inner House, 1998 SC 910 held that they should and the Court of Appeal [1999] 1 WLR 1614 followed that decision.

The employers appealed.Michael Jones QC (of the Scottish and English bars) and Andrew Smith (of the Scottish bar) (instructed by Vizard Oldham for Simpson & Marwick WS, Glasgow) for the Scottish employer; James Peoples QC and Gerald Hanretty (both of the Scottish bar) (instructed by Lawford & Co, Richmond, Surrey for Digby Brown, Edinburgh) for the Scottish employee; Jeremy Stuart-Smith QC and Edward Bishop (instructed by Vizard Oldham) for the English employer; John Foy QC and Charles Pugh (instructed by Lawford & Co, Richmond, Surrey) for the English employee.Held, dismissing the appeals, that no general provision, equivalent to s.103 of the Social Security Administration Act 1992, concerning the assessment of interest payable in respect of an award of damages had beenre-enacted under the new scheme of the 1997 Act; that such an omission was not an oversight; that in the absence of such a provision the direction in s.17 of the 1997 Act that benefits were to be disregarded in assessing damages extended also to the calculation of interest on those damages; that such an approach was supported by the structure of the scheme as the Act made it clear that the system for returning the amount of the benefits received during the relevant period to the taxpayer was entirely separate from the court process; that, additionally, there was no provision for the recalculation of interest after a variation of the assessment of the amount of recoverable benefits on appeal; and that, therefore, the employees were entitled to interest on all their damages for past loss of earnings without deduction of the recoverable benefits.

(WLR)