Cantwell v. Criminal Injuries Board

Damages for personal injury are compensatory. Each head of loss must first be identified and calculated by comparing like with like. Statutory rules governing the deduction of collateral benefits apply only after that calculation and only where relevant to the particular head of loss.

Accordingly, a contractual pension cannot reduce a pre-retirement claim for lost earnings under section 10(a) of the Administration of Justice Act 1982. After normal retirement, however, a claim for lost pension is the difference between the pension which would have been received and the pension actually received under the same scheme. Taking the latter pension into account measures the loss; it does not deduct a collateral benefit from damages.

A police officer retired early after being assaulted and received a taxable ill-health pension. Had he remained in service until his normal retirement date, he would have received a larger retirement pension under the same pension scheme. His application under the Criminal Injuries Compensation Scheme 1990 was refused because, after the relevant deductions, the award would have fallen below the scheme minimum.

The Criminal Injuries Compensation Board and the Lord Ordinary treated his post-retirement loss as the difference between the two pensions. The First Division allowed his reclaiming motion, reduced the Board's decision and remitted the application for reconsideration: 2000 SC 407. It held that section 10(a) of the Administration of Justice Act 1982 prevented the ill-health pension from being taken into account.

The central issue was whether the post-retirement ill-health pension had to be considered when calculating the officer's loss of retirement pension.

1. Appeal allowed unanimously. Lord Hope of Craighead delivered the leading speech. Lord Bingham of Cornhill, Lord Steyn, Lord Hobhouse of Woodborough and Lord Scott of Foscote agreed that the First Division's construction of section 10(a) of the Administration of Justice Act 1982 was wrong.

2. Per Lord Hope, damages under Scots law are compensatory. The claimant should, so far as money can achieve it, be placed in the position he would have occupied without the injury. The court must identify the nature of each head of loss and calculate it by comparing like with like before considering whether any listed receipt may reduce damages.

3. Section 10 concerns collateral benefits which may mitigate an identified loss. It does not alter the antecedent calculation of the loss itself. Its prohibition and direction therefore apply only to a payment relevant to the particular head of damages. A construction applying them indiscriminately to the total claim would produce irrational results, including the deduction of earnings from solatium.

4. Before normal retirement, the relevant claim is ordinarily for lost earnings. Section 10(a) prevents contractual pension benefits received during that period from reducing that loss. After normal retirement, the claim is for lost pension. Where the ill-health and retirement pensions are products of the same scheme, the loss is the difference between them. Taking the ill-health pension fully into account is indispensable to measuring the loss and is not a prohibited deduction.

5. Per Lord Hobhouse, the distinction between identifying a loss and mitigating an established loss was decisive. The respondent had not lost his whole retirement pension. He had suffered a reduction in the pension payable under the same scheme. Section 10 addresses mitigation only after that reduced loss has been identified.

6. Per Lord Hope, paragraph 20 of the Criminal Injuries Compensation Scheme applied before normal retirement, when it required only half of a taxable injury-related pension to be deducted from lost earnings. It did not govern the calculation of post-retirement pension loss, for which the whole pension received had first to be brought into account.

7. The interlocutor of the First Division was recalled and the interlocutor of the Lord Ordinary refusing judicial review was restored.

1. House of Lords: Allowed the Board's appeal unanimously, recalled the First Division's interlocutor and restored the Lord Ordinary's refusal of judicial review: [2001] UKHL 36.

2. First Division of the Court of Session: Allowed the respondent's reclaiming motion, reduced the Board's decision and remitted the application to the Board for reconsideration: 2000 SC 407.

3. Lord Ordinary: Refused the prayer of the petition for judicial review on 28 July 1998.

4. Criminal Injuries Compensation Board: By a majority, confirmed the single member's refusal and held that the post-retirement pension loss should be calculated by deducting the net ill-health pension in full.