Neal v Bingle

Where an accident makes previously received social security benefits subject to recoupment, the claimant may recover as special damages the benefits which, but for the accident, would have continued during the resulting disability. Section 81(5) of the Social Security Administration Act 1992 requires relevant benefits paid or likely to be paid after the accident to be disregarded in assessing damages; it does not bar recovery of pre-accident benefits. The recoupment scheme does not require the compensator to pay the Secretary of State more than the compensation payment. Recovery is not excluded merely because equivalent support or benefits were received, particularly where the claimant lost a pre-existing entitlement or became obliged to repay the replacement payment.

The claimant appealed from an award of £4,450 for injuries sustained in a road accident. Liability was admitted, but the trial judge found that the accident caused only temporary whiplash and concussion, and rejected claims for loss of earnings and loss of opportunity to undertake light work.

The claimant had received social security benefits before the accident. A Certificate of Total Benefit stated that £30,201.27 had been paid after the accident, a sum exceeding the damages and therefore capable of extinguishing the award through recoupment. The parties agreed on appeal that accident-related disability lasted two years, producing a relevant benefit figure of £10,869.45. The central issue was whether the claimant could recover the pre-accident benefits as special damages and how the recoupment provisions operated where the certificate exceeded the compensation.

Appeal allowed with costs. Lord Justice Beldam delivered the judgment, with which Lord Justice Simon Brown and Lord Justice Waller agreed.

1. Section 81(5) of the Social Security Administration Act 1992 was not a conclusive bar to the claim. It requires relevant benefits paid or likely to be paid after the accident, during the relevant period, to be disregarded when assessing damages in respect of the accident. It does not refer to benefits paid before the accident. Section 82(1)(a) likewise concerns benefits paid or likely to be paid after the accident and does not prevent recovery of benefits which would have continued but for the accident.

2. There is no general principle preventing recovery of the value of a benefit or advantage lost because of the accident merely because an equivalent benefit or support was received afterwards. Liffen v Watson [1940] 1 KB 556 and Dennis v London Passenger Transport Board [1948] AER 779 supported the conclusion that the relevant loss is the lost right or value. The approach suggested in Hassall v The Secretary of State for Social Security [1995] 1 WLR 812, at p 819, was therefore available where pre-accident benefits became subject to recoupment because of accident-related disability.

3. The recoupment scheme did not require the compensator to pay the Secretary of State more than the compensation payment. Section 82 requires deduction from that payment and payment of the amount deducted. A sum exceeding the compensation cannot be deducted from it. Section 82(2) prevents double recovery by treating the intended recipient’s right as satisfied to the extent of the deduction, while leaving any balance of general damages undepleted by payment to the Secretary of State.

4. Sections 98 and 99 permitted the claimant to challenge the Certificate of Total Benefit where benefits not paid in consequence of the accident had been included. Section 99(1) addressed repayment of an excess actually paid to the Secretary of State. If the certificate were corrected, any excessive deduction could be repaid to the claimant; the compensator would not be exposed to a further payment.

5. On the agreed two-year period of accident-related disability, the recoverable benefits amounted to £10,869.45. Adding £4,000 general damages and £450 medical expenses, judgment was entered for £15,319.45. That sum was the limit of the compensator’s liability to the Secretary of State, and the claimant could pursue an appeal against the certificate.

1. Court of Appeal: Allowed the appeal with costs and entered judgment for the claimant in the sum of £15,319.45.
2. Barnet County Court: On 8 May 1996, His Honour Judge Hague QC awarded £4,450 for the accident injuries but rejected the claims for loss of earnings and loss of opportunity to undertake light employment.