England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
QUEEN'S BENCH DIVISION
(MR JUSTICE SILBER)

		Royal Courts of Justice Strand London, WC2 Wednesday, 27 November 2002

1. LORD JUSTICE KENNEDY: This is an appeal from the decision of Mr Justice Silber, sitting in the Queen's Bench Division, who on 24th January 2002 gave judgment for the claimant in the sum of £74,661.25 on the basis of the claimant being 50 per cent responsible for the accident out of which the claim arose. There are grounds of appeal which relate to both liability and quantum. Permission to appeal was given by Lady Justice Hale.

FACTS

2. At about 10.45 am on Monday 31 March 1997, which was a Bank Holiday, the claimant who was then 36 years of age was riding a drop handlebar bicycle along the cycle track on his nearside of St John's Road, Tunbridge Wells travelling in the direction of Bidborough. To his right was a slow moving line of traffic which he was overtaking. Ahead of him on his nearside was a Shell petrol station. Also ahead of him, in the slow moving line of traffic, was a breakdown lorry owned by the second defendant and driven by the first defendant. The lorry signalled its intention to turn left into the garage and began to turn. The claimant failed to appreciate what was happening until it was too late, with the result that he ran into the rear nearside of the lorry. The force of the collision was such that he ended up under the rear nearside wheel of the lorry and so sustained very serious injuries.

LIABILITY

3. The claimant's case at trial was that he checked and re-checked and that no vehicle ahead of him signalled an intention to turn left, then at the last moment the lorry began to turn. There was powerful evidence to the contrary, not only from the first defendant but also from the drivers of both of the vehicles immediately behind him and one of their passengers. As a result the judge made six findings of fact, none of which are challenged in this appeal, namely -

(1) the lorry slowed down before making its turn,

(2) the first defendant indicated its intention to turn before starting to turn,

(3) the indication was given "well before the petrol station when the claimant was still some way back." The lorry began to signal when it was 38 metres from the petrol station,

(4) the claimant was in a racing position on his racing bike with his head looking down so that he did not see the lorry's indicator and did not appreciate that the lorry was turning until it had almost finished its turn when he looked up and tried to take evasive action,

(5) the claimant was cycling faster than the crawling traffic to his right and knew the petrol station he was approaching to be regularly used,

6) the lorry was well into the garage, turning slowly in a normal manner when it was struck in the rear nearside wheel by the claimant. As it was turning slowly it must have taken some time to reach that position.

FINDINGS ON LIABILITY

4. The first defendant said that he was aware of the cyclist who was about 100-yards from the petrol station when the lorry began to signal. The first defendant was next aware of the claimant after the lorry had turned into the petrol station when the claimant was 5 to 10 yards back. As the lorry made its turn there was of course a period when its driver could not see back along the cycle track. The judge did not say in terms whether he accepted the evidence of the first defendant as to what he saw of the claimant, but I infer that the evidence was accepted. There seems to be no reason why it should not have been.
5. The judge found that the first defendant was nevertheless at fault because he turned into the garage and crossed the dedicated cycle lane without checking first to ensure that it was safe to do so, either by looking in his wing mirror or, if there was a blind spot, waiting until he was able to check. The critical omission was the failure to check again before he started to turn. Paragraph 122 of the Highway Code required traffic crossing a cycle lane to give way to traffic using it.
6. The claimant was also found to be at fault. He clearly failed to keep a proper look-out. He did not see the signal, given in good time, or even see the lorry as it turned. The judge referred to paragraph 106 of the Highway Code, but, as Mr Shay for the appellant before us contends, that reference may not have been entirely appropriate.
7. As to apportionment the judge rightly refused to seek assistance from authorities and concluded that both the claimant and the first defendant were equally responsible.

APPEAL ON LIABILITY

8. Mr Shay submits that we should interfere with that apportionment. In the skeleton argument, upon which he relies and which he adopts, it is pointed out -

(1) the claimant was not in the same lane as the lorry so might more easily miss a signal, but in reality this claimant only missed it because he did not look,

(2) it is said that he was in a dedicated cycle lane with a right of way. That was something the judge clearly recognised, and that point was repeated in the skeleton argument more than once,

(3) it is said the bulk of the lorry made it a grave danger to any cyclist so that the first defendant had a heavier duty of care to check before turning.

9. Mr Shay went so far as to submit that the judge's reference to paragraph 106 of the Highway Code amounted to an error of principle and that some assistance could be gained from the speech of Lord Reid in Baker v Willoughby [1970] AC 467, 490 where he compared the blameworthiness of a motorist and a pedestrian in the circumstances of that particular case. To my mind there was no error of principle. Although I accept of course that a cyclist is more vulnerable than a lorry driver if any collision should occur, any cyclist who is taking reasonable care for his own safety knows that any vehicle turning left ahead of him will endanger him and he should therefore keep a particularly careful look-out.
10. In my judgment the claimant was fortunate to achieve a 50 per cent apportionment of liability and I would not interfere with it. That deals with the first three grounds of appeal.

QUANTUM

11. Ground 4 of the grounds of appeal deals with the claim for loss of earnings from the date of the accident on 31 March 1997 to the date of trial on 24 January 2002.
12. The claimant was a university graduate who worked in the paper industry as a salesman. From 1984 to October 1992 he worked for Wiggins Teape but he had problems with depression and alcohol abuse which eventually brought that employment to an end.
13. He then worked for relatively short periods for a series of other employers, and in November 1996 he began with Lithofast by whom he was employed at the time of his accident.
14. The problems he had previously experienced continued. In February 1997 (the month before his accident) the claimant wrote to his community nurse to say that he was -

"really scraping by from day-to-day and has been for years, and unless I can find some way of lessening this anxiety and tension without resorting to alcohol I'm very worried that I will end up back where I was last summer."

15. The claimant said in evidence that in that note he overplayed his hand. But the judge noted that -

"in March 1997, his community psychiatric nurse recorded that the claimant was obviously struggling with the job and threatening to `throw it all in' and she believed him to be a high risk, more so if he lost his job. She thought that he needed `urgent specialist input'. By 13th March 1997, he was motivated into decreasing his alcohol intake and was adopting a more positive attitude."

16. It was agreed that assuming the claimant had worked full time between the date of the accident and the date of trial he would have earned £78,096.86. But the defence contended that sum should be reduced by 30 per cent because in reality the claimant would have had at least that amount of time off work. The figures showed that over the 10 years prior to the accident the claimant had been off work for about 10 per cent of the time, but the record was deteriorating. If the review was carried out over the preceding 5 years the time off was 20.81 per cent, over the previous 3 years it was 24.18 per cent, over the previous 2 years it was 33.38 per cent and over the previous 12 months it was 46.3 per cent. The judge found that in the light of the psychiatric evidence there was no reason to think that the work pattern would have changed and so the appropriate discount could not be less than the figure contended for by the defendants, namely 30 per cent.
17. Mr Shay points out that after the accident the claimant got a glowing reference from Lithofast and that immediately before the accident the community psychiatric nurse had noted that the claimant was motivated to decreasing his alcohol intake. He submits that the judge gave insufficient weight to those two factors, but the judge referred to both, and, in the light of the medical evidence, he went on to find, in relation to future loss of earnings, that the claimant's pre-accident problems would have continued to the extent that by 2005 he would have had a complete breakdown.
18. In those circumstances the judge's decision as to the appropriate deduction in relation to the period up to the date of trial cannot, in my judgment, be faulted.
19. Turning to ground 5 of the grounds of appeal, the judge found, and it is no longer contested, that with increasing age, stress and increasing use of alcohol the claimant would have had a major crisis in about March 2005, some 8 years after his accident. The award for loss of earnings to March 2005 was discounted but there is no complaint about that discount. The judge envisaged that in 2005 the claimant would be off work for 4 months but would then get back to work and work as a salesman for another 10 years, but with increasing periods without work and between jobs. His poor work record and his health problems would continue to be a handicap. For the period between 2005 and 2015 the judge made a discount of 40 per cent.
20. In ground 5 it is said that the discount is excessive. Mr Shay submits that it made insufficient allowance for the possible efficacy of treatment. The judge was bound also to have regard to the fact that by 2005, when the claimant would be 45 years of age, his problems - which produced an absence record in 1996 to 1997 of 46.3 per cent - would have worsened over the years to the point of collapse, and even allowing for treatment a reduction to 40 per cent would be a considerable improvement. In my judgment that assessment made by the judge cannot be disturbed.
21. Ground 6 is not clearly expressed in the grounds of appeal, but the complaint is that when looking at what the claimant will now be able to earn in his disabled state the judge failed to make a deduction for periods off work because of stress and alcohol problems equivalent to that made when considering what he would have earned if no accident had occurred. The problem which Mr Shay faces, and it is only fair to point out that he did not appear in the court below, is that the judge was never asked to consider this point.
22. Mr Matthews, for the respondent, pointed out that from the outset the case for the defendants was that it was work as a salesman which produced problems and that if the claimant got an administrative job those problems would disappear. In their counter schedule the defendants made that point clear, saying that stress levels in administrative work would not be like those in a selling job where targets have to be met. When the employment experts gave evidence at the trial they produced an agreed schedule which made no discount of the type for which the claimant now contends. The judge was then, in relation to damages, asked to rule in relation to certain specified matters, after which counsel agreed to complete the calculations and produce an agreed minute of order. That can be seen from page 22 of the transcript where the judge said:

"I am now turning to the remaining issue of dispute for special damages, which is the claim for loss of earnings. Counsel have asked me to decide various issues of principle and they have said that they will thereafter work out the figures that flow from that decision."

The judge then dealt with what the claimant would have earned had there been no accident. At page 33 of the transcript the judge turned to what the claimant can now hope to earn. He said:

"Obviously credit has to be given for the sums that the claimant in his injured state will now receive. Unfortunately for him he has two years of operations ahead and that will preclude him from working for the next two years. Thereafter it is envisaged that he can work in sales administration and the precise figures appear to have been worked out on the basis that there will be a job search for nine months and then 18 months' part-time work followed by six months' full-time work.

The only disputed item is whether the claimant would have progressed to a senior supervisor."

The judge resolved that against the claimant and concluded at the foot of page 34:

"Thus I believe the sums for which he ought to get credit in respect of his earnings in his injured state is as somebody working in administration until he is 65."

23. Thus the point now being taken was simply not raised. If the judge had overlooked it he would, no doubt, have been reminded of it and he was not. Counsel simply agreed how his judgment should be interpreted in relation to the figures which had already been produced. They reduced their agreement to writing in the form of a draft minute of order which both they and the judge signed. In that minute of order the non-deduction is apparent. If counsel appearing for the claimant wanted a judicial ruling he could have asked for one. Plainly, he did not do so. Instead, perhaps rightly, he accepted the defence position in relation to this particular point. Having done so, neither he nor his successor can expect this court now to interfere. So, in my judgment, there is no substance in ground 6 of the grounds of appeal.

HOUSING BENEFIT

24. That brings me to ground 7 which is concerned with housing benefit. Between the date of the accident and the date of trial the claimant received about £17,000 in housing benefit from his local authority.
25. The defendants contended that the benefit was paid because the claimant had no income, and was used to meet needs he would have met from income, so as the claimant was not obliged to repay the benefit it diminished his fiscal loss. The judge accepted that argument but, consistently with his earlier findings, assumed that for 30 per cent of the time the claimant would have been off work and entitled to housing benefit. So he was only required to give credit for 70 per cent of the benefits he had received.
26. Some benefits are recoverable by the State and they are dealt with in the Social Security (Recovery of Benefits) Act 1997. Housing benefit does not feature in that statute.
27. In Hodgson v Trapp [1989] AC 807 Lord Bridge said at page 819:

"If, in consequence of the injuries sustained, the plaintiff has enjoyed receipts to which he would not otherwise have been entitled, prima facie, those receipts are to be set against the aggregate of the plaintiff's losses and expense in arriving at the measure of his damages."

In that case attendance allowance and mobility allowance were in issue. However Mr Shay submits that there must be a correlation between the benefit received and a head of damages claimed. In support of that argument he relied on other passages in Hodgson v Trapp and, in particular, one at page 823 where Lord Bridge said:

"I see no reason why the whole of the mobility allowance should not be regarded, just as the attendance allowance, as available to meet the cost of her care generally and thus as mitigating the damages recoverable in respect of the cost of that care."

28. We were also invited to look at part of the judgment of Mr Justice Simon Brown, as he then was, in Cresswell v Eaton [1991] 1WLR 1113 and at the judgment of this court in Clarke v South Yorkshire Transport Ltd [1998] PIQR Q104.
29. Obviously there must be some correlation between the benefit received and the loss claimed before the one can be deducted from the other. With that reservation I can see no reason why the general principle set out by Lord Bridge in Hodgson v Trapp should not be applied to housing benefit when, as here, it is sought to set it against a claim for loss of earnings to date. But for the accident the claimant would have used part of his earnings to pay for his accommodation. Because the accident rendered him impecunious that liability was discharged for him by his local authority in the form of housing benefit. If, as is now contended, he is entitled to recover his loss of earnings in full without any liability to reimburse the local authority he is being overcompensated to the extent of the housing benefit, and I see no reason why the court should regard that as a just result.
30. Housing benefit is an income-related benefit paid by local authorities pursuant to the Social Security Contributions and Benefits Act 1992 and the Housing Benefit Schemes brought into existence under that Act. Section 130 of the Act deals with the entitlement to housing benefit and the conditions which must be satisfied. Section 138 deals with the arrangements for funding and administration, and more detailed provisions as to entitlement are to be found in the Housing Benefit (General) Regulations 1987 as amended.
31. In Parry v Cleaver [1970] AC 1, 14 Lord Reid explained why payments by an injured party as a result of benevolence should be disregarded and added:

"We do not have to decide in this case whether these considerations also apply to public benevolence in the shape of various uncovenanted benefits from the welfare state, but it may be thought that Parliament did not intend them to be for the benefit of the wrongdoer."

That observation was considered by Lord Bridge in Hodgson v Trapp when he said (page 822):

" ..... when I turn to consider statutory benefits for the relief of various forms of need which are payable as of right to those who fulfil the qualifying conditions, I find the concept of `the intent of the person conferring the benefit' a somewhat elusive one. Statutory benefits of the kind in question come either directly from the pocket of the taxpayer or from some fund to which various classes of citizens make compulsory contributions. The legislation providing for the benefits is prompted by humanitarian considerations directed to meeting certain minimum needs of the disadvantaged, irrespective of their cause. It is, of course, always open to Parliament to provide expressly that particular statutory benefits shall be disregarded, in whole or in part, and section 2 of the Law Reform (Personal Injuries) Act 1948 is the most familiar instance where it has done so. But in the absence of any such express provision, where statutory benefits are payable to one whose circumstances of qualifying need arise in consequence of a tort of which he was the victim, I can certainly discern no general principle to support Lord Reid's tentative opinion `that Parliament did not intend them to be for the benefit of the wrongdoer."

32. Parliament has not expressly provided that housing benefit shall be disregarded. The benefit was payable because the claimant's qualifying need arose in consequence of the tort of which he was the victim. In my judgment, it must therefore follow as the judge found that the payments of housing benefit should be taken into account in reduction of the claim for loss of earnings to date. I would therefore dismiss this appeal.
33. LORD JUSTICE CHADWICK: I agree that this appeal should be dismissed for the reasons given by Lord Justice Kennedy. I add some short observations only in relation to the issue whether housing benefit should be taken into account against compensation.
34. Certain types of benefit are to be deducted from the gross amount of compensation payable in respect of heads of compensation under the Social Security (Recovery of Benefits) Act 1997 - see Section 8 of that Act. In particular, income support is to be deducted from compensation for loss of earnings - see Schedule 2 item 1 of that Act. Housing benefit is not amongst the matters to be deducted from compensation under that or any other head of compensation. The amounts to be deducted under Section 8 are payable to the Secretary of State by the person who would otherwise have been liable to pay them by way of compensation to the claimant - see Section 6 of that Act.
35. It seems clear, therefore, that the policy which underlies the 1997 Act is that persons to whom compensation is payable should not be overcompensated by receiving from the wrongdoer amounts which will duplicate those which they will receive through income support and other benefits. On the other hand, the wrongdoer is not himself to benefit. He is required to make an equivalent payment to the Secretary of State.
36. What view should the court take (in the light of that policy) of the fact that housing benefit - which, like income support, is payable under Section 123 of the Social Security Contributions and Benefits Act 1992 - has not been included in the 1997 Act? It is pertinent to note that the 1997 Act requires the wrongdoer to pay to the Secretary of State amounts equal to the amounts which he would otherwise have been liable to pay to the claimant by way of compensation. It may be said, therefore, that Parliament has assumed that, but for the provisions of the 1997 Act, compensation payable would not be reduced by amounts equivalent to benefit received by the claimant. Is it to be inferred that - in cases for which the 1997 Act makes no provision - Parliament intended that the claimant should receive both compensation and equivalent benefit in respect of the same head?
37. To my mind it is impossible to reach the conclusion that Parliament deliberately intended that the person injured should be entitled to be overcompensated. It is, I think, necessary to have in mind that housing benefit is not paid - at least not paid directly - by central government. It is paid by local authorities. To my mind, all that can be said is that Parliament has not yet enacted provisions under which the wrongdoer can be required to make any form of compensating payment to the local authority equivalent to the housing benefit which it has paid.
38. The question whether or not the claimant should be compensated in respect of a loss that he has not actually suffered - because his liability to make payments in respect of housing is met under the provisions of the housing benefit scheme - seems to me to turn on the general law; and, in particular, to be determined in accordance with the observations to which my Lord has referred in the speech of Lord Bridge in Hodgson v Trapp. I agree with him that those passages lead to the conclusion that housing benefit is properly deductible in this case.
39. LORD JUSTICE JONATHAN PARKER: I agree with both judgments.

Order: Appeal dismissed with the costs subject to detailed assessment and matters as per draft minute