LHS, R (on the application of) v The First-Tier Tribunal (Criminal Injuries Compensation Chamber) & Anor

Where an ex gratia compensation scheme directs assessment by reference to common-law damages and normally requires a lump sum, the administrator must calculate that sum as a civil court would calculate damages for the same loss, subject to express scheme modifications. Statutory discount-rate provisions which do not apply directly to the scheme may nevertheless form part of the civil-court method incorporated by the scheme. The 2.5% rate prescribed by the 2001 Order therefore governed the award. The administrator need not devise a current economic rate or model a hypothetical periodical-payment award. A jurisdiction where the statutory regime does not apply provides no contrary analogy.

The appellant, who had suffered severe lifelong injuries, challenged the First-tier Tribunal’s confirmation of a lump-sum award under the Criminal Injuries Compensation Scheme 1990. The award used the 2.5% discount rate prescribed by the 2001 Order. The appellant argued that the statutory rate did not apply and that lower rates should be derived from current economic evidence or from a notional periodical payment order.

The High Court dismissed the judicial review claim: [2015] EWHC 1077 (Admin). The central issue on appeal was the proper construction of paragraph 12 of the Scheme.

The Court of Appeal unanimously dismissed the appeal.

1. Construction of paragraph 12. The Scheme is an ex gratia mechanism intended to assist where a victim cannot obtain compensation from the person responsible for the crime of violence. Its objective, read with paragraph 21, was not to create a more extensive entitlement than would arise in an ordinary tort claim. Compensation assessed by reference to common-law damages therefore meant the amount a relevant civil court would award for the same loss, subject to the Scheme’s express modifications.
2. Discount rate. Section 1 of the Damages Act 1996 did not apply directly to a Scheme claim. It nevertheless formed part of the civil-court method which paragraph 12 required the CICA to replicate. A civil court making a lump-sum award in 2012 would have applied the 2.5% rate in the 2001 Order. The CICA and the Tribunal were therefore correct to use it.
3. Authorities and alternatives. The decision in Simon v Helmot [2012] UKPC 5 was distinguishable because the statutory regime did not apply in the Channel Islands. The alternative proposal to model a hypothetical periodical payment order was rejected. Paragraph 12 required a normal lump-sum award, not an elaborate reconstruction of staged future payments using a different discount rate. The practical and straightforward character of the Scheme supported that conclusion.

The judicial review decision and the Tribunal’s award were upheld.

• Court of Appeal (Civil Division) dismissed the appeal.
• High Court (Administrative Court) Jay J dismissed the claim for judicial review and upheld the Tribunal’s decision: [2015] EWHC 1077 (Admin).
• First-tier Tribunal confirmed the interim lump-sum award calculated using the 2.5% discount rate.