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FIRST DIVISION, INNER HOUSE, COURT OF SESSION
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Lord President
Lord Kingarth
Lord Mackay of Drumadoon
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[2008] CSIH 63
A688/02
OPINION OF THE COURT
delivered by the LORD PRESIDENT
in
RECLAIMING MOTION
by
JM
Pursuer and Reclaimer;
against
FIFE COUNCIL
Defenders and Respondents:
_______
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Act: A Smith, Q.C., Stirling;
Drummond Miller, LLP
Alt: Maguire, Q.C., Duncan;
Simpson & Marwick
5 December 2008
Introduction
[1] The pursuer and reclaimer was for
some years resident in St. Margaret's Children's Home ("the home"), situated in
Elie, Fife.
The home was run by the statutory predecessors of the defenders and
respondents. He seeks damages for loss,
injury and damage sustained as a result of sexual and non-sexual abuse
inflicted on him by David Murphy, an employee of the respondents' statutory
predecessors who was responsible for the day to day running of the home and the
care of the children who resided there. In
2001 Murphy pled guilty to offences involving the abuse of a number of children
formerly in his care. He was sentenced
to 15 years' imprisonment, and died while serving that sentence. The respondents do not dispute liability for
the actions of Murphy. The reclaiming
motion concerns the Lord Ordinary's assessment of solatium at £75,000 and his
decision to award interest on that sum only from the time of citation, rather
than from the date of the wrong.
The reclaimer's
personal history
[2] The reclaimer was born on 18
September 1952 and immediately taken into care by the respondents' statutory
predecessors. He was placed with a
foster mother, Miss S, for around the first six years of his life, which were
generally happy. He formed a bond with
his foster mother, whom he considered to be his natural mother. In July 1959 he was admitted to the home,
initially on a temporary basis due to his foster mother's ill health. In February 1960, due to his behaviour and to
Miss S's continuing ill-health, the reclaimer was admitted to the home on
a permanent basis, but retained some contact with his foster mother until her
sudden death in October 1961. He
remained at the home until September 1966, when he was placed with another
foster family with whom he remained for about a year. In due course he spent about 18 months
training in the catering industry. Thereafter
he moved to London, where he spent about 18 months to 2 years homeless
and working as a male prostitute. He
thereafter gained employment, and eventually spent 15 years working with the National
Health Service at Westminster Hospital. He became active in politics, serving as a
councillor in Tower Hamlets, and emerged as a leading figure in a trade union. While working at the hospital he met the woman
who was to become his wife; he married
in 1979 and had two sons, born in 1981 and 1985. The family moved together to the Liverpool area in 1990, despite the reclaimer
and his wife going through a process of separation at that time. They subsequently divorced, but remain on very
good terms; indeed, they continue to
share a house. The appellant no longer
works, but has acted as a lay magistrate, having done so at the time of the
proof for around five years. He has also
acted as a director of a charity which aims to support victims of abuse and
their families.
Evidence of abuse and
its effect
[3] Murphy arrived at the home when the
reclaimer was about eight years old. From
the time of his arrival he was both verbally abusive and physically violent
towards the reclaimer. This lasted until
the reclaimer left the home. The Lord
Ordinary heard evidence about a number of examples of such abuse: the reclaimer was made to stand naked on a
cold stone floor in an attempt to make him admit to having done something which
he had not done, pulled by the hair, kicked, punched and struck on the head and
body with a belt; he was made to stand
naked in front of other children; he was
struck on the face when he made simple spelling errors; and he was told to eat the same plate of
macaroni, which made him gag, for three consecutive days. He was frequently kept off school due to the
visible injuries which he had sustained. He suffered from faecal and urinary incontinence
as a result of the distress occasioned by this and the aftermentioned sexual
abuse.
[4] When the
reclaimer was around eight and a half or nine years old, Murphy began to abuse
him sexually. On the first occasion,
when the reclaimer was upset, Murphy put his arms around him, before placing
his hands inside the reclaimer's trousers, penetrating his anus with his
finger, telling him to remove his trousers, removing his own trousers and
engaging him in lewd conversation. Thereafter
the reclaimer was subjected to a protracted course of almost daily sexual
abuse, often accompanied by Murphy spitting in his face or mouth. The abuse included Murphy forcing the
reclaimer to perform oral sex, masturbating over him, sodomising him and tying
him to a bed. He appeared deliberately
to try to hurt the reclaimer when penetrating him during the frequent acts of
sodomy. The reclaimer usually accepted
the abuse without a struggle. On one
occasion he bit Murphy's penis and was subjected to a very violent assault
which left him unconscious, with a chipped tooth and a broken nose. On another occasion Murphy held the reclaimer
over the side of a boat on the River Forth, sodomised him and then threw him
overboard to swim back to the shore. The
reclaimer lived in constant fear of Murphy and believed that the latter could
have killed him without anyone noticing or caring.
[5] The abuse has
had a profound effect on the reclaimer's ability to relate to other people,
both physically and emotionally. The
first emotional attachment he had was with his future wife but it took three
years for him to allow her to touch him, as he found it physically painful. He has had similar difficulties showing
affection to his children and has never been as close to them as he would have
liked: the first time he hugged one of his sons was on the opening day of the
proof in this case. He was at one time
part of an organisation where people shook hands and put their arms around each
other, but he had to leave as such practices made him uncomfortable. He received some psychiatric treatment, but
stopped attending after around three sessions. He has also received some counselling. He testified that he had suffered from
depression consistently and had been advised that he would have to take daily
medication for this for the rest of his life.
Disclosure of abuse
[6] At
the time of the abuse the reclaimer was too afraid to disclose what was taking
place. Murphy was a former policeman and
a respected member of the community. The
reclaimer did not think that any report he made would be believed.
[7] In December
1970 the reclaimer wrote a letter from London to the respondents' predecessors in
which, inter alia, he disclosed some
details of the abuse. He received a
reply from a Miss W, his former social worker, then the Assistant Director of
Social Work, in which she intimated that the allegations "would have been
investigated very thoroughly" had they been reported at the time. A number of telephone conversations ensued
between the reclaimer and Miss W during which the allegations were discussed. The records completed by Miss W (who did not
give evidence) suggested that she discussed the allegations with her colleagues
in December 1970, that the Fife Police were notified and that police officers
from Chelsea had visited the reclaimer who had not made a statement at
that time. The reclaimer's recollection
was that he had visited the police in Chelsea in January 1971. He had spoken to Miss W, who had suggested
that he had better be able to prove his allegations, given Murphy's good
reputation and his position in the community. This discouraged him from progressing matters.
He was never made aware of the police in
Scotland being informed of the allegations.
[8] In the years
prior to this action being raised the reclaimer discussed the abuse with a
limited number of people. He told his
general practitioner in 1972 or 1973, without going into any detail. He was referred for counselling as a result. He told his future wife some of the details
shortly after they met, in 1976 or 1977, but had never told her all that had
taken place. In 1994 and 1995 he gave
general information about the abuse to doctors who were treating his son, as he
had concerns that it might be relevant to his son's care and treatment. In 1999 he again contacted his general
practitioner, who referred him for counselling. He spoke to a social worker who contacted the
police about the abuse with his consent. He then gave a number of statements to police
officers prior to the arrest and conviction of Murphy. The reclaimer intimated no civil claim against
the respondents until December 1999. The
summons in the present action was served on 13 March
2002.
Decision of the Lord
Ordinary
[9] In awarding solatium of £75,000 the
Lord Ordinary identified the following non-exhaustive list of relevant factors
in a case of this kind: the nature and
severity of the abuse; its frequency; its duration; the victim's age at the time; its immediate effects; possible other causes of the victim's
problems; the emotional and social
consequences; and any psychiatric
illness or psychological condition suffered as a result of the abuse. He considered that it was difficult to imagine
a worse case of child abuse than the present, that it was akin to torture, as
commonly understood, and that it involved the "grossest breach of trust
imaginable". He considered that the
starting date for the abuse was about 18 June 1961, this being the mid-way point
between the reclaimer being eight and a half and nine years old. By reference to documentation which disclosed
when the reclaimer was placed with his second foster family, he decided on an
end date of about 14 September 1966. He
accepted the evidence about the physical pain and emotional distress suffered
at the time of the abuse, as well as the evidence concerning the reclaimer's
inability to form a "tactile" relationship with members of his family. However, he also considered that the reclaimer
had achieved success in life, despite the abuse. Given the lack of expert evidence, he was unwilling
to accept the reclaimer's own evidence about psychiatric illness or
psychological condition. In reaching a
figure for solatium he relied to some extent on English authority, but did not
think that the Irish authorities, relied on by the reclaimer, were relevant. He decided that the whole award of solatium should
be referable to the past only. In
exercising his discretion in terms of Section 1 of the Interest on Damages (Scotland) Act 1958 (as amended) and limiting
interest to the period from the date of citation until payment, he took into
account that there had been a delay of more than 35 years from the end of the
abuse until the raising of the present action. Despite the reclaimer's evidence about the
impression conveyed by Miss W during his telephone conversations with her, the
Lord Ordinary noted that the reclaimer had discussed the abuse with various
individuals thereafter - his wife and various medical advisers and counsellors.
There was no satisfactory explanation
for the delay in raising the action.
Submissions for the
parties
[10] Mr Smith on behalf of the
reclaimer acknowledged that an appeal court should be slow to interfere with a
Lord Ordinary's assessment of solatium.
The test was whether the award was "wholly unreasonable" or was "out of
all proportion" (McEwan and Paton on
Damages for Personal Injuries in Scotland (2nd ed.) para.15-01
(as at May 2007); Macphail, Sheriff Court Practice (3rd ed.)
para.18.110-2; Barker v Murdoch and Others
1979 S.L.T. 145). It had been observed
judicially that it might be that the levels fixed by judges in respect of
personal injury claims were lower than they should be (Baigent v British
Broadcasting Corporation 2001 SC 281, at para.[24]). The relevant test was met here. In the circumstances an award of £75,000 as a
principal sum could be regarded as derisory.
There were no Scottish awards in point.
Those in England were difficult to analyse; reference was made to KR and Others v Bryn Alyn
[2003] QB 1441; [2003] EWCA Civ 85. It was important to bear in mind
that the present case involved repeated sexual and physical assault which was
to be distinguished from accidental injury (Griffiths
v Williams, Court of Appeal,
21 November 1995, per Rose L.J. at pages 21-3; Lawson
v Glaves-Smith [2006] EWHC 2865 (QB), per Eady J. at paras.3, 26 and 138-40;
Walker on Delict (2nd ed.)
pages 488-9). Awards in the Republic of Ireland provided a potential source of
guidance. Reference was made to Nolan v Murphy [2005] IESC 17 (where an award of €350,000 for repeated
sexual abuse had been made). The
psychosocial aspects of the damage to the reclaimer had not been given
appropriate weight by the Lord Ordinary.
In McLeod v British Railways Board 2001 S.C. 534 a jury
award of £250,000 for burning injuries had been sustained. It was appropriate for the court to have
regard to jury awards (Shaher v British Aerospace Flying College Limited
2003 S.C. 540, at para.[6]). Reference
was made to the solatium awards noted in Hajducki
- Civil Jury Trials at page 261.
The award of £75,000 was in the circumstances wholly unreasonable. An award of £175,000 was sought. The largest part of the damages should be
attributed to the period of the abuse.
[11] As to interest
on damages, it was accepted that that was a matter for the exercise of a
judicial discretion. The Lord Ordinary
had failed to explain why he had not accepted the reclaimer's explanation as to
why he had not pressed his claim earlier.
The Lord Ordinary had exercised a discretion (by awarding interest on
the whole damages from citation) but had exercised it unduly
restrictively. Interest should have been
awarded on the bulk of the damages at the full rate of interest from the time
the reclaimer left the home and on the award in respect of the consequences
experienced since that date from then at half the judicial rate. The development of the law on interest could
be seen from Macrae v Reed and
Mallik Limited 1961 S.C. 68,
especially per Lord Patrick at pages 76-8.
The norm was now to award interest from the date when the wrong was
committed. A successful claimant was
entitled to interest to compensate him for being kept out of money which he was
due. As to the position in England, see McGregor on Damages (17th ed.) para.15-108-9; Kemp
and Kemp - Quantum of Damages, Chapter 26. The test for interference with a judicial
discretion was that expressed by Lord Reid in Thomson v Glasgow Corporation
1962 S.C. (H.L.) 36, at page 66.
Delay, even inordinate delay, did not justify the withholding of
interest (Boots The Chemist Limited v
G.A. Estates 1992 S.C. 485,
especially per Lord Justice Clerk Ross at pages 497-8). The true issue was who had meantime had the
benefit of the money. The reclaimer's
lack of action in pursuing a civil claim until he did was perfectly
comprehensible. Reference was also made
to Pickett v British Rail Engineering Limited [1980] AC 136, especially per
Lord Edmund-Davies at page 164 and per Lord Scarman at
pages 172-3.
[12] Miss Maguire
on behalf of the respondents submitted that the reclaiming motion should be
refused on both aspects; each involved a
discretionary exercise by the Lord Ordinary and there were no grounds for
interfering with the discretions exercised.
The reclaimer accepted the high test to be met before a discretionary
decision could be interfered with by an appellate court. Reference was made additionally to Britton v Central Regional Council 1986 S.L.T 207 and to G v G [1985] 1 WLR 647, especially per Lord Fraser of Tullybelton at pages 650-2.
[13] As to solatium,
the Lord Ordinary had discharged his task in a reasoned and considered
manner. He had appropriately used such
English authorities as there were on child abuse as a benchmark for the present
case. He had made an award higher than
those made in the Bryn Alyn cases and
beyond the upper bracket for severe psychiatric damage suggested in the
Guidelines for the Assessment of General Damages in Personal Injury Cases (8th
ed.) issued by the (English) Judicial Studies Board. The use of jury awards, particularly where
the circumstances were not comparable, was unhelpful; they provided no reasoning. Whereas the use of English awards of general
damages for the purposes of comparison had been approved (Allan v Scott 1972 S.C.
59), no such approval had been given to the use of awards in the Republic of Ireland.
Damages there were amongst the highest in Europe (Quill
- Torts in Ireland (2nd
ed.) at page 542; see also MacIntosh and Holmes - Personal Injury
Awards in EU and EFTA Countries, pages 367-8). The principles to be applied in a Scottish
court where there was psychological affection were well expressed in Bowers v Strathclyde Regional Council 1981 S.L.T 122, per Lord Cameron
at pages 125-6.
[14] As to interest
on damages, the rate to be applied was a matter for the Lord Ordinary's
discretion (MacIntosh v National Coal Board 1988 S.L.T.
348). It could not be said that a
"silencing effect" was within judicial knowledge (AS v Poor Sisters of Nazareth
2007 SC 688, at para.[35]). An
inordinate delay in making a claim had (in a commercial case) led to a
modification in the interest awarded (Nacap
Limited v Moffat Plant Limited
1986 S.L.T. 326). Reference was also
made to Buchanan v Cameron 1973 S.C. 285. The exercise of the discretion in respect of
interest required a selective and discriminating approach (Macrae v Reed and Mallik
Limited). That approach had been
followed after the amendment made to the 1958 Act by the 1971 Act (Smith v Middleton 1972 S.C. 30).
Reference was also made to Ross v
British Railways Board 1972 S.C.
154. To award interest as sought by the
reclaimer would be manifestly unfair to the respondents. The Lord Ordinary had done his best to do
justice between the parties. Boots The Chemist Limited v G.A. Estates Limited could be
distinguished. A delay of the order
which had occurred in this case had not been envisaged by the legislature. Reference was also made to Wilson v Dunbar Bank plc 2008 S.L.T. 301, L v Chief Constable of
Staffordshire [2000] P.I.Q.R.Q. 349 and Eagle
v Chambers (No.2) [2004] 1 WLR 3081. No explanation had been put
forward by the reclaimer as to why from 1970 there had been no intimation of a
claim and no action taken by him. It
could not be said that action taken by the respondents' predecessors had been
responsible for the reclaimer not taking matters forward. The fact that the respondents, who had made
their own decision not to dispute liability, had also decided not to take any
time bar point, should not be held against them. It was necessary to do justice between the
parties and not to penalise the respondents.
In the absence of any claim made against them until 1999, the
respondents (and their predecessors) could not have acted earlier.
Discussion - the
principal sum
[15] In Inglis v London, Midland and
Scottish Railways 1941 SC 551 Lord President Normand observed (at
page 560) that:
"It would be most unwise for the
Court to interfere with an award of solatium made by a Sheriff or Judge unless
it was satisfied that the amount was wholly unreasonable."
The other judges agreed.
An alternative test of "being out of all proportion to the sum which
[the appellate court] think[s] should have been awarded" (Barker v Murdoch, at
page 147) has on occasion been adopted.
[16] The
circumstances of this case are unusual, as well as being atrocious. There was no guidance in Scottish authority,
whether at first instance or on appeal, and whether by judge or jury, to assist
the Lord Ordinary. He did, however, have
some assistance from the range of awards made by way of general damages in
England and Wales in KR and Others v Bryn Alyn Community Limited, where discussion of the individual
awards is to be found (only in the neutral citation) at paras.137 and following. The use of English authority is competent and
appropriate (Allan v Scott).
Although the awards in Bryn Alyn
were "primarily for long-term psychiatric or psychological injury" (para.1) and
were particularised and supported by relative professional reports (para.112), while
the reclaimer's evidence of long-term effects was not so supported, the
background circumstances were the nearest available in cases arising in the
United Kingdom. They included subjection
of children to buggery at the hands of wrongdoers. The highest award, in 2003, in the Bryn Alyn cases (made to DJ who had been
grossly abused, physically and sexually, between about the ages of ten and
sixteen) was £50,000 by way of general damages (para.224). The Lord Ordinary, having made a careful
analysis of all the relevant factors, concluded that, had there been
(professional) evidence of psychiatric and/or psychological injury and, if the
reclaimer had not coped so remarkably well with his life despite Murphy's
abuse, he would have considered making an award of solatium in excess of
£100,000. He continued (para.[55]):
"Despite the absence of these
elements, I am persuaded that, in the absence of any need for apportionment in
this case, the horrific nature, character and severity of the abuse taken
together with its frequency and duration, the age of the pursuer at the time
and the immediate effects on the pursuer, justify an award greater than those
made by the Court of Appeal in Bryn Alyn. I consider that solatium is properly assessed
at £75,000."
[17] That approach
and the resulting conclusion are not, in our view, open to successful
challenge. The Lord Ordinary was, in the
absence of professional support for the assertions of psychiatric and
psychological damage, entitled to hold that the existence of such damage and
its causal relationship to the abuse had not been proved. Nonetheless, he felt entitled to have regard
to and to accept the evidence of the reclaimer and his former wife as to the
emotional and social experiences (falling short of psychiatric illness or
psychological condition) of the reclaimer and to attribute these to the abuse
(para.[49]).
[18] In the event,
the Lord Ordinary (who awarded interest on the whole damages from the date of
citation, attributing the damage wholly to the past), did not require to
allocate damages between the immediate consequences of the abuse when in the
home and the emotional and social experiences subsequently. However, counsel for the reclaimer, both
before the Lord Ordinary and before us, attributed twice the level of damages
to the period in the home over that from his leaving it until the date of
decree (£100,000 and £50,000 respectively).
That apportionment seems reasonable and we adopt it. The Lord Ordinary was entitled to take the view
that there was no compensatable future damage.
In these circumstances his award of £75,000 can reasonably be said to
comprise £50,000 in respect of the period in the home and £25,000 in respect of
the emotional and social consequences thereafter.
[19] Such an award
cannot, in our view, be said to be so low as to be wholly unreasonable or out
of all proportion to the sum which should have been awarded.
[20] Awards in the Republic of Ireland in this field are not helpful. There appears to have been a long tradition
in that jurisdiction of making awards in personal injuries cases significantly
higher than elsewhere in the British Isles and amongst the highest in Europe (Quill - Torts in Ireland (2nd
ed.) at page 542; Personal Injury Awards in EU and EFTA
Countries (editors Macintosh and Holmes) at pages 367-9).
[21] In these
circumstances the reclaimer's challenge to the amount of the principal award, in
our view, must fail.
Discussion - interest
[22] At common law interest on damages was
commonly awarded only from the date of decree.
The Interest on Damages (Scotland) Act 1958, section 1(1)
empowered the court in an action of damages to award interest from a date not
earlier than the date of citation "if the circumstances warrant such a
course". In Macrae v Reed and Mallik
Limited (decided in 1961) the Second Division held that the discretion
conferred by section 1(1) must be exercised on a selective and
discriminating basis. The majority of
the court (Lord Justice Clerk Thomson dissenting) held that interest from a
date earlier than the date of decree could be allowed on damages awarded for
loss suffered before that date only where such loss could be definitely
ascertained. In particular, interest on
solatium (being ascertainable not earlier than the award having been made in
the court of first instance) was not payable from any date earlier than that
court's decree.
[23] Section 1(1)
of the Interest on Damages (Scotland) Act 1971 substituted for
section 1(1) of the Interest on Damages (Scotland) Act 1958 the following:
"(1) Where
a court pronounces an interlocutor decerning for payment by any person of a sum
of money as damages, the interlocutor may include decree for payment by that
person of interest, at such rate or rates as may be specified in the
interlocutor, on the whole or any part of that sum for the whole or any part of
the period between the date when the right of action arose and the date of the
interlocutor.
(1A) Where
a court pronounces an interlocutor decerning for payment of a sum which
consists of or includes damages or solatium in respect of personal injuries
sustained by the pursuer or any other person, then (without prejudice to the
exercise of the power conferred by subsection (1) of this section in relation
to any part of that sum which does not represent such damages or solatium) the
court shall exercise that power so as to include in that sum interest on those
damages and on that solatium or on such part of each as the court considers
appropriate, unless the court is satisfied that there are reasons special to
the case why no interest should be given in respect thereof.
...".
[24] Lord Emslie,
sitting in the Outer House, in a leading judgment always thought to be
authoritative (Smith v Middleton), adopted in the context of the
amended statute the selective and discriminating approach advocated in Macrae v Reed and Mallik Limited. In
applying that approach in that context he held that interest was payable at a
restricted rate on past solatium from the date of death, the action in question
having arisen out of the death of a husband and father. The restricted rate (half the rate payable as
from the date of death) was applied because the loss in question could be
regarded as being sustained not wholly at the death but over the period of time
from the death to the date of decree.
Although Lord Emslie emphasised that he was making that
determination in the context of a claim in respect of death, it has been the
regular practice of this court, in the absence of special reasons not to do so,
to award interest on the same basis on past solatium for pain and suffering where
that pain and suffering has extended over the whole period between the date
when the right of action arose and the date of the interlocutor (see, for
example, Orr v Metcalfe 1973 S.C. 57, per Lord President Emslie at
page 60). Where the pain and
suffering has ended at some date prior to the date of the interlocutor, it is
the usual practice to award interest at the full rate from that terminus until
payment.
[25] Usually the
nature of the pain and suffering to be compensated will be of a sufficiently
homogenous nature that it will not be necessary, for the purposes of making an
award of interest, to divide past solatium into constituent elements. Unusually, in the present case, there are, it
seems to us, two discrete elements, namely (1) the pain, affront and
humiliation experienced by the reclaimer while resident at the home and (2) the
emotional and social consequences which he experienced after leaving the home. Although the Lord Ordinary in his discussion
distinguishes between these elements, he did not distinguish between them for
the purposes of an award of interest. It
was unnecessary for him to do so once he had decided to award interest on the
whole award of past solatium from the date of citation.
[26] Section 1(1A)
of the 1958 Act (as amended) is mandatory - the court is obliged in the defined
circumstances to exercise the power conferred by section 1(1) (Orr v Metcalfe). But that power
involves a wide discretion - in particular, while it would be open to a court
to award interest from the date when the right of action arose, it would also
be an exercise of that power to award interest only from a later date, say, the
date of citation. Accordingly, the Lord
Ordinary's restriction of the award of interest to run from the date of
citation cannot be said to infringe the mandatory requirements of
section 1(1A). It remains, however,
to consider whether the manner of the exercise of that power is open to successful
challenge. It has not at any stage been
suggested by the respondents that no interest should be awarded.
[27] The Lord
Ordinary at para.[58] stated:
"...;
in the circumstances of the present case, I do not consider it is
necessary for me to express a view as to whether delay must be 'inordinate',
'inexcusable' or 'unreasonable' to justify a restriction on interest".
That was said against a submission made by the respondents
that, in circumstances where some such adjective had been appropriately applied
to delay on the part of a pursuer, a restriction on the interest to be awarded
was appropriate. Two Outer House cases (Buchan v J. Marr (Aberdeen) Limited 1987 S.L.T. (N) 521 and M & I Instrument Engineers Limited v
Varsada 1991 S.L.T. 106) had been relied
on before the Lord Ordinary in respect of that submission. Reference was also made to Nacap Limited v Moffat Plant Limited. But
all these decisions require to be looked at against the decision of the Second
Division in Boots The Chemist Limited
v G.A. Estates Limited where, at
page 497, Lord Justice Clerk Ross, having referred to these three Outer
House cases, observed:
"I am not persuaded that inordinate
delay on the part of the pursuer in prosecuting his action should justify any
modification of interest. If there has
been such inordinate delay, the result must be that the defenders have had use
of money for a longer period than they should have had it."
Although there was no express disapproval of the Outer House
decisions, disapproval seems implicit.
Lord Murray and Lord Grieve agreed.
Accordingly, in the absence of special circumstances, inordinate delay
in prosecuting an action should not, it would appear, of itself result in a
pursuer being deprived of interest to which he was otherwise entitled. The same principle has been found to apply in
relation to delay in raising proceedings (Bhatia
v Tribax Limited 1994 S.L.T.
1201, per Lord Cullen at page 1204 and Purryag
v Greater Glasgow Health Board
1996 S.L.T. 794 where Lord Abernethy, when considering quantum of damages
following a proof in a medical negligence case which had taken place 18 years
after the alleged omission, felt obliged to hold, in accordance with the normal
practice, that interest would have been payable at half the court rate for the
whole period from the date of that omission until the date of decree).
[28] The Lord
Ordinary found it unnecessary to express a view on that line of authority. He continued, however:
"No satisfactory explanation has been
provided as to the elapse of more than 35 years. Although the pursuer stated in evidence that
his telephone conversation with Miss [W] of the Social Work Department in
early 1971 caused him to be too scared to proceed with any complaint at that
time, I did not understand him to suggest that this conversation remained the
cause of his delay in intimating any claim for the next 28 years or
thereabouts. There is no suggestion in
the evidence of any other steps taken by the defenders or their predecessors
which might have caused the pursuer to refrain from intimating a claim. If interest were to run on the whole award of
solatium, even at half the judicial rate from time to time in force, from the
date when the abuse ended (or indeed earlier than that, if the pursuer's
approach is to be preferred) this would add very significantly to the amount
payable by the defenders to the pursuer.
In the absence of satisfactory explanation for the delay, I do not
consider that this would be fair to the defenders. In enacting the amendments to the 1958 Act
which are comprised in the Interest on Damages (Scotland) Act 1971, I do not consider that
Parliament had in mind interest on awards of solatium for personal injuries
caused more than 40 years before the date of decree. No doubt it is for that reason that
Parliament saw fit to confer the discretion on the courts which was in fact
conferred."
[29] In early 1971
the reclaimer was a few months over the age of 18. The Lord Ordinary at para.[14] records his
evidence of what happened at that time as follows:
"In January 1971, the pursuer went to
the police in London and reported what Murphy had done to him in the
home. The police told him that he would
have to return to Scotland to make a report there. He had nowhere to stay in Scotland and was scared to report this matter
to the procurator fiscal. He spoke to
Miss [W] on the telephone and told her that he had been to the
police; she told him that Murphy was a
lovely man, who was very caring and was a respected member of the community,
and if the pursuer made these allegations, he would have to be able to prove
them. If he could not do so, he should
'shut up'. The pursuer said that he was
too scared to proceed with any complaint at that time."
[30] The Lord
Ordinary does not make any adverse criticism on the reclaimer's credibility or
reliability as to his account of these events.
Indeed his treatment at para.[58] suggests that he found the reclaimer's
evidence as to his reaction to Miss W's observations on the telephone to
be true and accurate. For our part, it
does not surprise us that a very young man, having experienced what the
reclaimer had experienced in the home and being faced in 1971 with
Miss W's attitude as expressed on the telephone, would have been
apprehensive about returning to Scotland and there pursuing matters with the
authorities. What he was faced with was
not the making of a civil claim - with or without professional advice - but the
mounting of an allegation of gross criminal conduct against an individual who
was at that time regarded highly in the local community. The mounting of such an allegation was, so
far as the reclaimer was concerned, discouraged by the authority who were that
individual's employers and who had had ultimate responsibility for the
reclaimer's care while a child in their home.
The reclaimer, so far as he was aware, had no support for his
allegations. He did not think that he
would be believed.
[31] It is against
that background that the reclaimer's inaction over the succeeding 35 years
must, in our view, be addressed. The
Lord Ordinary's concern appears to have been that there was in evidence no
satisfactory explanation for the delay between the conversation with
Miss W and the making of a civil claim in 1999. Neither counsel at the proof asked the reclaimer
why he had not acted earlier. But such
an explanation is, in our view, not hard to find from the whole background
circumstances. The allegations which the
pursuer would have had to make were, as we have said, of gross criminal
conduct. It was and remained essentially
a police matter. Any civil claim was
necessarily a secondary aspect. It was
only when in 1999 a social worker, to whom he had related his experiences, obtained
the reclaimer's permission to ask the local police to contact him that a change
occurred. He gave a statement to the
police on Merseyside where he was then living.
That statement, as it happened, matched with an account given at about
the same time to Fife Police by another former resident of the home who, having
been detained for some offence, in the course of a police interview broke down
and told of his experiences. It was only
then that Fife Police came to interview the reclaimer. Thereafter a substantial criminal
investigation was mounted against Murphy.
In the same year the reclaimer made his civil claim.
[32] The Lord
Ordinary in discussing interest and, in particular when concluding that there
was no satisfactory explanation for the lapse of time, does not discuss that
history, which in our view is material.
His omission to do so involved, in our judgment, a misdirection. Further, in considering the matter of
fairness he addresses only what would be fair or unfair to the respondents,
without having regard, at least expressly, to fairness to the reclaimer. Nor does he take into account the established
practice, in personal injuries cases of awarding damages on past solatium from
the date when injury was first sustained.
In these circumstances the Lord Ordinary's decision on interest, while
involving an exercise of a discretion, is open, in our view, to review by this
court.
[33] In deciding
what disposal in respect of interest is in the circumstances fair to both
parties, it is important to bear in mind two things - first, that the quantum
of the principal sum of past solatium is assessed in money's-worth as at the
time of the interlocutor, not as at the time or times when the injury was
sustained and, second, that two elements may be said to be included in the
giving of interest on damages. In Wright v British Railways Board [1983] 2 A.C. 773 (referred to in McGregor on Damages (17th
ed.) at para.15-109) Lord Diplock at page 781F identified these elements
as "one, a reward for taking a risk of loss or reduction of capital; the other, a reward for foregoing the use of
the capital sum for the time being". The
former element in effect protects against inflationary effects on the value of
money; the latter is concerned with the
obligant having had, over the intervening period, the benefit of the use of the
capital sum. These elements, it may
reasonably be supposed, are both intended to be reflected in the rates of
interest on decrees which have been fixed from time to time - and which
historically have been set at the same rates in Scotland as in England.
[34] Where the
period between the sustaining of the damage and the making of an award is
relatively short, there may not be a serious injustice in interest on past
solatium being awarded which includes both elements; but the position is more problematic where a
long period is involved. As the effects
of past inflation are taken into account in making the award of the capital sum
in terms of current money's-worth, interest should not also be allowed to the
extent of that element of the rate which may be said to represent protection
against inflation. No doubt, some
assessment could be attempted as to what proportion of the judicial interest
rates over the last four decades could be said to have been attributable to the
inflationary as against the other element.
No such assessment was attempted in this case. (Nor was any specific argument advanced about
the incidence of tax.) In its absence, a
fair apportionment might be to treat each element as of equal weight. The result would be that interest would be
payable from the requisite date at half the rate which would otherwise be
awarded.
[35] The reclaimer
seeks interest on the larger part of the principal sum (that is, on the
compensation for the damage done during his stay in the home) from 14 September
1966, when
he left the home, until payment.
Although strictly some interest may be due from an earlier date, that is
not pressed for. All the damage for
which that part of the principal sum is due had been sustained by 14 September
1966. The reclaimer seeks interest on that
principal sum from that date until decree at the full judicial date from time
to time in force. We shall return
shortly to which judicial rate is appropriate;
but for the reasons given above the full judicial rate should not, in our
view, be allowed on that sum but rather half that rate. On the lesser part of the principal sum (that
is, on the compensation for the emotional and social consequences experienced
by the reclaimer after he left the home) the reclaimer claims interest at half
the full judicial rate from 14 September 1966 until decree - to reflect the
circumstance that the damage was suffered over that period. For the reasons given that rate should be
restricted further to one-quarter of that rate.
[36] As to which
judicial rate to adopt, practice has varied.
Sometimes the current judicial rate has been used as the starting point,
sometimes that prevailing from time to time over the period or periods in
question, sometimes (as in Smith v Middleton at page 40) an average of
the rates over that period. Between 1966
and the present time the judicial rate on decrees of the Court of Session has
varied from 5% to 7% to 11% to 12% to 15% and then back down to 8%, the last
having been the prevailing rate since April 1993. Those rates which are in double figures no
doubt contain a significant element of protection against inflation. The simple average of these rates is about
9.67% but, having regard to the assumed significant inflationary elements in
the higher rates, that average appears to us to be in the circumstances too
high. Although the exercise must
necessarily be a broad one and expert testimony might have produced a lower
figure, taking as the starting point the current rate of 8% per annum appears
to us to be reasonable.
[37] In all the
circumstances, accordingly, we shall refuse the reclaiming motion in so far as
directed to the principal sum of damages but to allow it in so far as directed
to interest, to the extent of varying the Lord Ordinary's interlocutor by
substituting for "interest thereon at the rate of 8% per annum from the date of
citation until payment" the words "interest on the sum of £50,000 from
14 September 1966 until decree at the rate of 4% per annum, interest on
the sum of £25,000 from 14 September 1966 until decree at the rate of 2%
per annum and interest on the sum of £75,000 and on the capitalised amounts of
the foregoing interest at the rate of 8% per annum from the date of decree
until payment".
[38] We would add
only two things. First, it was suggested
by Mr Smith that the respondents might have protected themselves from a
substantial award of interest by taking a plea of limitation (or even of
prescription). But the fact that they
chose not to do so (perhaps for policy reasons) does not, in our view, affect
the proper approach to the awarding of interest. Second, the basis on which the reclaimer sued
the respondents was that they were vicariously liable for the conduct of their
employee Murphy - albeit that conduct was criminal as well as giving rise to a
civil wrong. Such vicarious liability
may not have been clear until the decision of the House of Lords in Lister v Hesley Hall Limited [2002] 1 AC 215 - though there was a
suggestion by Mr Smith that the respondents and their predecessors might in
any event have been exposed to liability because as education authority they
should have been aware, from the reclaimer's appearance at school, that he was
being subjected to ill-treatment at the home.
The latter suggestion is speculative, but it does not matter. The theory of the law is that the respondents
and their predecessors were always vicariously liable for the conduct of Murphy
and that the reclaimer was entitled to compensation from them from the time or
times when that conduct caused injury to him.
