Griffiths v British Coal Corpn

Under the Social Security (Recovery of Benefits) Act 1997, statutory interest on personal-injury special damages forms part of the corresponding compensation head for set-off purposes. Both the depreciation and loss-of-use elements of interest are part of compensation intended to restore the claimant’s position. Where recoverable benefits exceed the capital damages for that head, the excess may be deducted from the combined damages and interest, up to the total benefits. The phrase cost of care incurred during the relevant period includes gratuitous care where the claimant must reimburse the carer from damages awarded for that care. A purposive construction prevents double recovery and loss to the State.

Miners with occupational lung disease succeeded in eight test claims before Turner J. British Coal subsequently entered into a handling agreement for similar claims. In a later judgment dated 26 October 2000, Turner J ruled for British Coal on two assessment issues and granted permission to appeal. The issues were whether recoverable benefits exceeding special damages could be set off against statutory interest on earnings, care and mobility losses, and whether care benefits could be set off against damages for gratuitous care. The central question was the proper construction and application of the Social Security (Recovery of Benefits) Act 1997.

1. The appeal was dismissed. Lord Phillips MR delivered the judgment. Lord Justice Kennedy and Lord Justice Dyson agreed.
2. Payment of statutory interest on personal-injury damages is a payment made in consequence of the accident, injury or disease within section 1(1)(a) of the Social Security (Recovery of Benefits) Act 1997. The causal chain begins with the accident, injury or disease and there was no justification for restricting the natural statutory wording.
3. The decision of the House of Lords in Wisely v John Fulton (Plumbers) Ltd and the linked appeal of Wadey v Surrey County Council established that benefits are disregarded when the court assesses damages and interest. Those appeals did not determine the position where benefits exceeded the capital damages for the relevant head. For Schedule 2 purposes, the compensation head includes statutory interest on the special damages. Both the depreciation and loss-of-use elements form part of an award intended, so far as possible, to restore the claimant’s position. Accordingly, excess benefits may be set off against the combined damages and interest, up to the total benefits.
4. For gratuitous care, Hunt v Severs showed that the claimant’s damages are intended to recompense the voluntary carer and are held subject to an obligation to account. The phrase cost of care incurred during the relevant period therefore extends to care provided during that period where the claimant’s obligation to reimburse the carer is contingent on receiving the damages. The contrary approach in Duffy v Lanarkshire Health Board and McCauley v Babcock Energy Ltd was not accepted. A purposive construction was justified because excluding the set-off would produce double recovery and corresponding loss to the State.
5. The appeal was dismissed with costs subject to detailed assessment. Permission to appeal to the House of Lords was refused.

1. Court of Appeal (Civil Division): dismissed the appeal with costs and refused permission to appeal to the House of Lords.
2. Queen’s Bench Division: Turner J ruled for British Coal on both assessment issues on 26 October 2000 and granted permission to appeal.