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Neal v Bingle [1997] EWCA Civ 2158 (22nd July, 1997)
URL: http://www.bailii.org/ew/cases/EWCA/Civ/1997/2158.html
Cite as:
[1997] EWCA Civ 2158,
[1998] 2 All ER 58
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JOHN ALBERT NEAL v. GREGORY CHARLES BINGLE [1997] EWCA Civ 2158 (22nd July, 1997)
IN
THE SUPREME COURT OF JUDICATURE
CCRTF
96/0701/C
IN
THE COURT OF APPEAL (CIVIL DIVISION)
ON
APPEAL FROM BARNET COUNTY COURT
(HIS
HONOUR JUDGE HAGUE QC
)
Royal
Courts of Justice
Strand
London
WC2
Tuesday,
22 July 1997
B
e f o r e:
LORD
JUSTICE BELDAM
LORD
JUSTICE SIMON BROWN
LORD
JUSTICE WALLER
-
- - - - -
JOHN
ALBERT NEAL
PLAINTIFF/APPELLANT
-
v -
GREGORY
CHARLES BINGLE
DEFENDANT/RESPONDENT
-
- - - - -
(Transcript
of the handed down judgment of
Smith
Bernal Reporting Limited, 180 Fleet Street,
London
EC4A 2HD
Tel:
0171 831 3183
Official
Shorthand Writers to the Court)
-
- - - - -
MR
R SMITH
(Instructed by Messrs Kleinman Klarfeld, Middlesex, HA7 4AW) appeared on behalf
of the Appellant
MR
D TUCKER
(Instructed by Messrs Greenwoods, London WC1B 3HL) appeared on behalf of the
Respondent
-
- - - - -
J
U D G M E N T
(As
approved by the Court
)
-
- - - - -
©Crown
Copyright
Tuesday,
22 July 1997
J
U D G M E N T
LORD
JUSTICE BELDAM: The appellant Mr. John Albert Neal, now sixty years of age,
appeals from the decision of His Hon. Judge Hague QC sitting in the Slough
County Court on 8th May 1996 awarding him £4,450 damages for personal
injuries he suffered in a road accident on 14th January 1989. The defendant had
admitted liability to compensate the plaintiff but contested the nature and
extent of the injuries which the plaintiff claimed he had suffered and the
period of disability attributable to them. In summary, the plaintiff who was
fifty-two at the time, claimed that he had suffered injury to his neck and
lower back which had rendered him unfit for work from the date of the accident
until trial.
The
defendant’s case was that the plaintiff had not worked for a considerable
period prior to the accident and it was unlikely that he would have done so had
the accident not occurred. Because of pre-accident disability he was incapable
of work. Insofar as the court might find on the evidence that the plaintiff was
not capable of work, it was due to pre-existing orthopaedic problems with his
lower back and not due to the accident. Further, if as he contended he was
capable of light work, he had chosen not to obtain such work.
The
judge found that, although the plaintiff suffered a whiplash injury to the neck
as a result of the accident, the disability in his lumbar spine pre-dated the
accident and was due to a previous accident when he fell from a ladder in 1986.
From
about 1980 the plaintiff had worked as a self-employed builder and decorator
doing some small building work but, after completing a profitable contract in
South Africa in 1985, he returned to the United Kingdom and in May 1986 fell
off a ladder while working on his own house. Since that time he had not done
any work at all. Thus at the time of the road traffic accident he was in
receipt of income support and other Social Security benefits.
After
the accident on 14th January 1989 the plaintiff was taken to Edgware General
Hospital and detained for two nights for observation, returning as an out
patient two weeks later. It was agreed at the trial that he suffered a minor
head injury and was knocked out for about a minute and that he had suffered the
whiplash injuries to his cervical spine in the accident. However the judge
found that those injuries had settled down over time and by the date of the
hearing the plaintiff had recovered from them. The parties agreed that the
appropriate award for general damages for the whiplash injury and minor
concussion should be £4,000. The plaintiff had spent approximately
£450 in fees for treatment from an osteopathic doctor which he was also
entitled to recover. The plaintiff had claimed that all his disabilities were
due to injuries sustained in the road accident but the judge found that his
lumbar spine had not been injured and that the only injury for which he was
entitled to compensation was the whiplash injury.
Having
made these findings, the judge turned to the question of special damages. He
rejected the plaintiff’s claim for loss of earnings and loss of the
opportunity to take light, sedentary employment. Thus the judge found that the
plaintiff had suffered no loss of earnings as a result of the accident.
At
the date of the accident the plaintiff was in receipt of Social Security
Benefit. The plaintiff had received Social Security benefit payments from the
date of the accident to 14th January 1994, the relevant period for the purposes
of the
Social Security Administration Act 1992, amounting to £30,201.27.
The Compensation Recovery Unit of the Department of Social Security
(“CRU”) had issued a Certificate of Total Benefit (“the CRU
Certificate”) in this sum on 19th May 1995. The CRU stated that the
Certificate showed the amounts of benefit paid to the plaintiff because of his
injury in the road accident on 14th January 1989. Under the relevant provisions
relating to the recovery from damages of sums equivalent to benefit contained
in the
Social Security Act 1989 and re-enacted in the consolidating
Social
Security Administration Act 1992, this sum formed the basis of the deduction
from the amount of any compensation payment made by the defendant to the
plaintiff, and required to be paid by the defendant to the Secretary of State.
As the stated sum greatly exceeded the damages awarded, and was payable out of
any payment “falling to be made ... to ... the victim in consequence of
the injury”, the whole of the general damages would be extinguished and
the plaintiff would receive nothing. To preclude this possibility the plaintiff
adopted the solution suggested by Henry L.J. in his judgment in
Hassall
v The Secretary of State for Social Security
[1995] 1 WLR 812. At page 819 he endorsed the suggestion of Mr Burrell QC, put
forward in an article in Issue 2/94 of “Quantum”, that in such
circumstances the plaintiff could claim as special damage the loss of
“unrecoupable” benefits he was receiving before the accident. Prior
to the accident the plaintiff had been receiving income support on the basis of
his availability for work which was not deductible from any sum received as
damages. Because he was injured in the accident and was no longer available for
work, the benefits he received became deductible from any compensation he might
recover. Depending on the findings of the judge at trial, he could suffer a
loss of general damages because of his disability. Accordingly he was entitled
to claim that he had lost the Social Security benefits he was receiving before
the accident which were not deductible from any compensation.
In
the present case the judge held that such a claim was not sustainable.
Consequently the effect of his judgment was that the plaintiff received no
general damages at all. The plaintiff appeals contending that the judge wrongly
rejected his claim to be entitled to the loss of the benefits he had been
receiving before the accident. In the course of argument before the judge,
counsel realised that the medical evidence required the judge to decide the
length of the plaintiff’s disability due to the injuries sustained in his
accident, so they asked the judge to make a finding when, if he had not had his
pre-accident condition, the plaintiff would have been able to sign on as able
to accept work if it was offered to him. As the
Social Security Administration
Act 1992 contains provisions for review of and appeal from the matters set out
in the CRU Certificate, such a finding was perceived by counsel to be
potentially important to both parties. However the judge declined to make any
such finding. For the purposes of the appeal, the matter having been raised by
the court in the course of argument, the parties agreed that the plaintiff
would have recovered from the effects of the accident by 14th January 1991.
Thus the period of disability as a result of the injuries attributable to the
accident was, on the facts found by the judge, two years. If the CRU
Certificate was amended to accord with the judge’s finding, the amount
paid to the victim in respect of the accident would be £10,869.45.
The
Background
Sec.
2 of the Law Reform (Personal Injuries) Act 1948 provided:
“(1) In
an action for damages for personal injuries ... there shall in assessing those
damages be taken into account against any loss of earnings ... which have
accrued or probably will accrue to the injured person from the injuries ... one
half of the value of any rights which have accrued or probably will accrue to
him therefrom in respect of Industrial Injury Benefit, Industrial Disablement
Benefit or Sickness Benefit for the five years beginning with the time when the
cause of action accrued. This sub-section shall not be taken as requiring both
the gross amount of the damages before taking into account the said rights and
the net amount after taking them into account to be found separately.”
Provision
was made in sub-section (iii) in assessing the damages to ignore any finding of
contributory negligence so that the deduction of one half of the benefits was
made from the total damages for loss of earnings. It is unnecessary to consider
the historical reasons for these provisions. They gave rise to no difficulties
in practice but, as the cost of maintaining and caring for injured plaintiffs
increased, it came to be perceived that Social Security funds were bearing the
brunt of expenses which should be borne by the insurance companies who almost
always indemnified the tortfeasor against a liability for which he was
responsible. In 1978 the Royal Commission on Civil Liability and Compensation
for Personal Injury (Chairman Lord Pearson) recommended that the full value of
Social Security benefits paid to an injured person as a result of an injury
should be deducted in assessing damages. However it proved difficult to obtain
a consensus as to how these recommendations should be implemented. Eventually
the
Social Security Act 1989 gave effect to the proposals but they have given
rise to considerable difficulty and unfairness which have, in part at least,
been redressed by the provisions of the Social Security (Recovery of Benefits)
Act 1997.
The
Recoupment Provisions
Recoupment
was originally provided for in the
Social Security Act 1989 and by the Social
Security Recoupment Regulations 1990. The stated purpose of the provisions was
to ensure that the State should not subsidise tortfeasors and that accident
victims should not get a windfall from double payments, once in compensation
and once in benefit. Thus the new provisions required full deduction to be made
of all prescribed benefits. The deduction was to be from the entire payment of
damages, including general damages for pain and suffering and loss of amenity,
and not just set against the special damages for loss of earnings. The
machinery used was to require the person making the compensation payment (the
compensator) to refrain from making any payment of damages until the Secretary
of State had furnished a certificate of total benefit. The compensator was then
required to deduct from any payment of damages an amount equal to the gross
amount of the relevant benefits paid or likely to be paid to or for the victim
during the period of five years following the accident. Special provision was
made where the compensator was a foreign national, for small payments of
damages and other similar circumstances. As the payments were required to be
made on the basis of a certificate provided by the Secretary of State,
the Act
allowed for review of the certificate and appeals against the amount both by
the compensator and by the victim.
Section
81 contained relevant interpretations for that part of
the Act.
By
Section 82 it was provided:
“(1) A
person (“the compensator”) making a compensation payment, whether
on behalf of himself or another, in consequence of an accident, injury or
disease suffered by any other person (“the victim”) shall not do so
until the Secretary of State has furnished him with a certificate of total
benefit and shall then -
(a) deduct
from the payment an amount, determined in accordance with the certificate of
total benefit, equal to the gross amount of any relevant benefits paid or
likely to be paid to or for the victim during the relevant period in respect of
that accident, injury or disease;
(b) pay
to the Secretary of State an amount equal to that which is required to be so
deducted; and
(c)furnish
the person to whom the compensation payment is or, apart from this section,
would have been made (“the intended recipient”) with a certificate
of deduction.
(2) Any
right of the intended recipient to receive the compensation payment in question
shall be regarded as satisfied to the extent of the amount certified in the
certificate of deduction.”
Section
83 provided:
“The
compensator’s liability to make the relevant payment arises immediately
before the making of the compensation payment, and he shall make the relevant
payment before the end of the period of 14 days following the day on which the
liability arises.”
Section
84, The certificate of total benefit:
“(1) It
shall be for the compensator to apply to the Secretary of State for the
certificate of total benefit ...
(2) The
certificate of total benefit shall specify -
(a) The
amount which has been or is likely to be paid on or before a specified date by
way of any relevant benefit which is capable of forming part of the total
benefit.”
Section
91 made provision for overpaid benefits, Section 97 for a review of
certificates of total benefit and Section 98 for appeals:
“...
against any certificate of total benefit at the instance of the compensator,
the victim or the intended recipient ...”
As
has been pointed out, the deduction of an amount equal to the gross amount of
relevant benefits paid or likely to be paid to the victim during the relevant
period is to be made from a compensation payment which includes any payment
falling to be made in consequence of the accident by or on behalf of a person
who is
“...
liable to any extent in respect of that accident”.
Thus
the payment of the equivalent sum comes out of the award for which the
compensator
is
liable
,
including general damages and special damages such as loss of earnings and
other pecuniary loss.
Section
81 further provided:
“(5) Except
as provided by any other enactment, in the assessment of damages in respect of
an accident, injury or disease the amount of any relevant benefits paid or
likely to be paid shall be disregarded.
(6) If,
after making the relevant deduction from the compensation payment, there would
be no balance remaining for payment to the intended recipient, any reference in
this part to the making of the compensation payment shall be construed in
accordance with regulations.”
The
Regulations referred to were Part 4 of the Social Security Recoupment
Regulations 1990, paragraph 14 of which provided:
“Where,
after making the relevant deduction from the compensation payment, there is no
balance remaining for payment to the intended recipient, any reference in
Schedule 4 (of the
Social Security Act 1989 now Part 4 of the
Social Security
Administration Act 1992) to the making of the compensation payment shall be
construed as a reference to the acceptance by the intended recipient of an
offer in respect of his claim against the compensator.”
This
provision appears to have been inserted so that the compensator and the
intended recipient could not argue that if after taking account of the
deductions no damages were payable, the recoupment provisions did not apply
because the compensator was making no compensation payment.
Thus
it seems that Parliament contemplated that, but for this provision, the
Secretary of State might be unable to recoup any of the benefit payments made
during the relevant period.
In
rejecting the plaintiff’s claim to recover as pecuniary loss the amount
of the benefits he was receiving before the accident, the judge regarded the
provisions of Section 81(5) as preventing any such recovery. He said:
“I
can see no answer to the argument of Mr. Holdsworth (counsel for the defendant)
that such an addition cannot be made by reason of Section 81(5) ... Mr Reade
sought to say that the dicta related to the fact and quality of the benefits
paid: that may be, but in my judgment it is no answer to the point. I consider
that it is plain that the sub-section requires the court to disregard the
benefits
altogether,
and the addition of them (or any part of them) to the damages is as much
precluded by the sub-section as the deduction of them. Neither Henry L.J. in
his dicta nor Mr Burrell in his article refer to Section 81(5), except
obliquely, and neither explains why the sub-section does not apply.”
The
judge then referred to the judgment of Pringle J. in the High Court of Northern
Ireland in
Mitchell
v The Department of Environment for Northern Ireland
,
who also relied on the equivalent provision to Section 81(5) in the Northern
Ireland legislation.
In
my view this sub-section does not provide the conclusive answer to the
plaintiff’s claims the judge suggested. It was, I think, included to make
it clear that benefits which prior to the arrangements for recoupment had been
deducted from loss of earnings should no longer be regarded as deductible to
avoid them being deducted twice. Prior to the passing of
the Act benefits such
as Family Credit, Attendance Allowance, statutory Sick Pay and Unemployment
Benefit had been held by the court to be deductible from loss of earnings as
sums which the victim would not have received but for the accident. They were
taken into account in full in the assessment of damages. It is noticeable that
Section 8(5) refers to the assessment of damages and not to the assessment of
the compensation payment. Moreover it is quite clear that it is “in
assessing damages in respect of an accident” that the relevant benefits
“paid or likely to be paid” are to be disregarded. So the
provisions could not refer to benefits paid before the accident. It is also
clear that the phrase “any relevant benefits paid or likely to be
paid” where they appear in Section 82(1)(a) refer to payments made after
the accident and during the relevant period.
I
can thus find no support for the judge’s interpretation that the
provisions of sec. 81(5) prevent the court from considering recovery of a sum
as special damages based upon the benefit which, but for the accident, the
plaintiff would have continued to receive.
The
mere fact that the plaintiff continued to receive an equivalent sum in benefit
to the sums which he was receiving before the accident is no bar to such a
recovery. The reality is that the benefit he was receiving before the accident
was due to his pre-existing disability or unemployment. After the accident he
received the same sum but repayable by the recoupment provisions from any
compensation recovered. Suppose the case that the plaintiff, rendered
unconscious by the accident and unable to look after himself, had been looked
after by a benevolent relative unaware that the plaintiff could claim benefits
as a result of the accident. The plaintiff’s existing benefits would be
stopped because he did not sign on and until he made a new claim for benefits
resulting from the injuries sustained in the accident he would be in receipt of
no benefits. I can see no reason in general principle why the plaintiff could
not claim the benefits lost. Moreover there are many instances in which a
plaintiff receives an equivalent sum to earnings or other benefits of which he
was in receipt before the accident on condition that he was morally or legally
obliged to repay the sums received as compensation. So, for example, in
Liffen
v Watson
[1940] 1 KB 556 the plaintiff, a domestic servant, before the accident had
received from her employer £1 per week wages and board and lodging. After
the accident she went to live with her father who provided board and lodging
for her. The trial judge refused to award as damages the value of her board and
lodging because her father had without cost to her provided board and lodging
of equivalent value.
This
court held that the trial judge was wrong. Slesser L.J. said:
“...
If, since the plaintiff’s discharge from hospital, her father has
provided her with board and lodging in his home, that is no reason why she
should not be heard to say that her loss of board and lodging previously
provided by her employer was as much a loss to her as if she had lost the
actual sum in money.”
Goddard
L.J. said:
“The
plaintiff lost her right to the board and lodging provided by her employer
because she was rendered by the accident unfit to work. It does not matter
whether after the accident she was taken in by her father or by a friend to
whom she might say: “I cannot make a contract with you but I will pay you
something if I recover damages”. The only consideration is what the
plaintiff lost. She lost the value of the board and lodging just as she lost
her wages and she is entitled to be compensated for that loss.”
Similarly
in
Dennis
v London Passenger Transport Board
[1948] AER 779, a plaintiff was held entitled to recover wages paid to him by
his employer on condition that, if he recovered them, he would repay the
employer.
There
is therefore no general principle against a plaintiff claiming for loss of the
benefits which, but for the accident, he would have received during the period
of his disability following the accident.
If
the plaintiff obtains judgment for those benefits, it would not result, as was
suggested, in the compensator having to pay twice over. In the ordinary case
the amount of the benefits awarded to the plaintiff by the judgment will be
satisfied by payment of the equivalent amount determined in accordance with the
certificate of deduction. See sec. 82(2). The plaintiff will then receive any
compensation awarded by way of general damages undepleted by the payment of the
equivalent sum to the Secretary of State.
In
giving further reasons for his decision, Judge Hague emphasised that recoupment
was intended to be from all the damages, both general and special, and should
not be “at the expense of the compensator”. The repayment
provisions on a successful appeal against a CRU certificate are only explicable
on that basis.
In
the ensuing paragraph he suggested that Lord Justice Henry had concentrated
entirely on unfairness to the victim and ignored unfairness to the compensator,
but it would seem from his remarks that the judge was under the impression that
the recoupment provisions required the compensator to pay the full amount
stated in the certificate of total benefit even though it exceeded the full
amount of any compensation payment or award of damages. However I do not think
that the recoupment provisions do so provide. Sec. 82 does not require payment
of the sums specified in the certificate of total benefit. It requires the
compensator to deduct from the compensation payment an amount “determined
in accordance with the certificate of total benefit” and equal to the
gross amount of the relevant benefit and to pay to the Secretary of State an
amount equal to that which is required to be so deducted. Since the compensator
cannot “deduct” from the compensation payment more than the amount
of the compensation payment, he is not required to pay to the Secretary of
State more than the compensation payment; any balance over and above the amount
of the compensation payment cannot in my view be said to be “deducted
from it”. This seems to me to be further supported by the arrangements
for recovery of any amount of the relevant payment made which exceeds the
amount that ought to have been paid. For by sec. 99(1) the Secretary of State
is required to repay an amount equal to that excess to the intended recipient.
Thus although sec. 98 affords the compensator the right of appeal against a
certificate of total benefit on the ground for example:
“b)
that benefit paid or payable otherwise than in consequence of the accident,
injury or disease in question has been brought into account”,
there
is no provision for repayment of any sum to the compensator.
This
omission seems to have led the judge to express the view that if the plaintiff
were to appeal successfully against the certificate and to achieve a repayment
as:
“On
(his) findings in the previous judgment he might well be able to do”
a
repayment to him could result in substantial overcompensation at the expense of
the defendant. For reasons already given I cannot agree with this suggestion.
Section
98 gives a right of appeal against the Certificate of Total Benefit on the
grounds set out in ss. 1(a) or (b) and whilst it is true that no appeal can be
brought until the claim giving rise to the compensation payment has been
finally disposed of and the relevant payment has been made, the provisions of
sec. 99 for recovery in consequence of an appeal only apply when the amount of
the relevant payment actually made exceeds the amount that ought to have been
paid. The relevant payment is the payment to the Secretary of State by the
compensator which as previously explained will not exceed the total amount of
the damages awarded or agreed. There would thus be no question of any repayment
being due to the compensator and if, as appears to have been the case,
Parliament intended that the recoupment should be made from the compensation
payment as a whole, there could be no question of the intended recipient
receiving more whether by damages or repayment than the total amount of the
damages. But equally if an excessive amount has been deducted from the
compensation payment and the plaintiff successfully appeals under sec. 98, I
can see no reason why he should not be paid the excess.
For
these reasons I consider that the judge ought to have awarded the plaintiff a
sum equivalent to the benefits which he would have received but for the
accident. As he held that the plaintiff’s disability due to the accident
lasted only until 14th January 1991, the amount was £10,869.45 which with
his medical expenses and general damages amounted to £15,319.45. This sum
represents the limit the defendant as compensator is required to pay to the
Secretary of State. It will then be for the plaintiff to appeal against the
amount stated in the CRU Certificate. If the Secretary of State does not accept
that benefits paid otherwise than in consequence of the accident have been
brought into account, he would no doubt refer the question to a medical
tribunal who must take into account the court’s decision “relating
to the issue”. See sec. 98(6).
Thus
the dispute, if there is one, would not concern the compensator who has already
discharged in full his liability to the intended recipient and the Secretary of
State.
I
would thus allow the appeal and enter judgment for the plaintiff for
£15,319.45.
LORD
JUSTICE SIMON BROWN: I agree.
LORD
JUSTICE WALLER: I also agree.
ORDER: Appeal
allowed with costs.
© 1997 Crown Copyright