Cantwell v Criminal Injuries Compensation Board (Scotland)

The House of Lords allowed the appellants' appeal and held that, on the facts, the claimant's ill‑health pension must be taken into account when assessing his loss of retirement pension for the period after his normal retirement date. The court applied the compensatory principle that loss must be measured by comparing like with like and followed the approach in Parry v Cleaver for the post‑retirement period. It held that section 10(a) of the Administration of Justice Act 1982 does not bar taking a contractual pension into account where the head of loss is diminution of pension after retirement, and that paragraph 20 of the Criminal Injuries Compensation Scheme 1990 is directed at pre‑retirement reductions and does not govern the arithmetic for post‑retirement pension loss.

The respondent, a police officer, suffered injuries in 1992 which led to early ill‑health retirement in 1993, earlier than his normal retirement date in 1996. He received an ill‑health pension (commuted partly to a lump sum) which was lower than the retirement pension he would have received had he served to the normal retirement age. He applied for compensation under the extra‑statutory Criminal Injuries Compensation Scheme 1990. The Board and the Lord Ordinary treated paragraph 20 of the Scheme as governing deductions in the pre‑retirement period and (by a majority) applied a policy of deducting half of the ill‑health pension pre‑retirement and the whole of it post‑retirement; the First Division read section 10(a) of the Administration of Justice Act 1982 as excluding any deduction of a contractual pension for the purposes of assessing damages, and allowed the claimant's reclaiming motion, remitting the matter to the Board (2000 SC 407).

The House of Lords considered:

• the nature of the loss claimed (whether it is loss of earnings pre‑retirement and loss of pension post‑retirement);
• whether section 10(a) prohibits taking the ill‑health pension into account when assessing post‑retirement pension loss; and
• the role of paragraph 20 of the Scheme in the post‑retirement calculation.

Their Lordships held that damages are compensatory, requiring like to be compared with like; after the retirement date the head of loss is diminution of pension and the ill‑health pension must therefore be brought into account in full when calculating that loss. Section 10(a) is to be applied head by head and does not prevent accounting for a contractual pension when the head of claim itself is loss of pension. Paragraph 20 of the Scheme was interpreted as applying to pre‑retirement reductions (mitigation) and not as displacing the common‑law method of calculating post‑retirement pension loss. The appeal was allowed and the First Division's interlocutor recalled.

Appeal allowed. The House of Lords held that section 10(a) of the Administration of Justice Act 1982 does not preclude taking an ill‑health pension into account when assessing loss of retirement pension for the period after the normal retirement date; paragraph 20 of the Criminal Injuries Compensation Scheme 1990 governs reductions prior to retirement and does not govern the arithmetic for post‑retirement pension loss. The First Division's contrary construction was therefore wrong.

Single member of the Criminal Injuries Compensation Board refused compensation (28 September 1995); a five‑member Board confirmed that decision (17 July 1997); Lord Ordinary (Court of Session) refused the petition for judicial review (28 July 1998); First Division allowed the reclaiming motion and remitted the application to the Board (2000 SC 407); House of Lords allowed the appeal ([2001] UKHL 36).