Neal v Jones (t/a Jones Motors)

Where a personal injury claimant operates a business through a genuine partnership, recovery for loss of the partnership’s profits is limited to the claimant’s own partnership interest. The court must determine that interest from the reality of the parties’ contributions and arrangements, rather than formal accounts or tax treatment alone.

In assessing future loss, the court may take a broad view of the claimant’s impaired earning capacity, particularly where fresh evidence shows that the assumed continuation of the business has failed. Mathematical precision is not required. The court must make a fair overall estimate, taking account of both the claimant’s share of business loss and any handicap in the labour market.

Matthew Neal claimed damages for serious injuries sustained when a bus driven in the course of the defendant’s business turned into the path of his motorcycle. Liability was admitted. The High Court awarded £259,705.21, including £22,000 for past loss of earnings, £150,000 for future loss of earnings and £65,000 in general damages.

The defendant appealed the assessment of damages. The Court of Appeal received fresh evidence, including evidence that the claimant’s business had subsequently broken up and that he had started a new business. The central issues were whether the business had been a partnership, what share of its losses the claimant could recover, and how future earning loss should be assessed.

1. Appeal allowed in part. The Court reduced general damages from £65,000 to £45,000, past loss of earnings from £22,000 to £11,000, and future loss of earnings from £150,000 to £120,000.
2. The business was a genuine partnership between Mr Neal and Miss De’Tedstone. Relevant indicators included their joint ownership of the premises, joint mortgage and bank account, Miss De’Tedstone’s substantial capital contribution, her active management of the spare-parts business, and their representation to suppliers that they traded together. The fact that Mr Neal supplied the principal engineering skill did not displace the partnership.
3. Under Kent v British Railways Board [1995] PIQR Q42, a partner injured in an accident may recover only the share of partnership loss corresponding to that partner’s interest. The presumption under section 24 of the Partnership Act 1890 was equality in the absence of contrary agreement or evidence. Mr Neal was therefore entitled to recover only one half of the established past business loss.
4. The same partnership principle affected future loss, but the Court also had to consider the claimant’s overall future earning capacity. Fresh evidence showed that the original business had broken up and that the claimant had been left to establish a new business without his former partner’s support. His physical and cognitive disabilities materially handicapped him in the labour market.
5. The future award was therefore assessed globally at £120,000. Although a multiplier-and-multiplicand calculation could assist, the better approach on the evidence was a fair overall assessment of the claimant’s loss over the remainder of his working life. The order was appeal allowed with costs, subject to a £5,000 reduction.

• Court of Appeal (Civil Division): Neal v Jones (t/a Jones Motors) [2002] EWCA Civ 1731. Appeal allowed in part; damages were reduced as stated above.
• High Court, Queen’s Bench Division, Bristol District Registry: Judgment entered for the claimant by Mr Recorder Tackaberry QC on 5 December 2000. The total award was £259,705.21 plus interest.