February 8, 2023

The calculation of compensation in Tort Case

Personal injury may cause non-pecuniary as well as pecuniary loss to the plaintiff. Non-pecuniary loss includes damages on the heads of,

(i) pain and suffering;

(ii) loss of amenities and

(iii) loss of expectation of life.

Pecuniary loss may cover damages calculable on the heads of,

(i) consequential expenses,

(ii) cost of care and

iii) loss of earnings.

Amount of compensation

Pain and suffering consequential to an injury inflicted on the plaintiff would include pain attributable to medical treatment for the injury. The amount of compensation will vary with the intensity of pain and suffering of the plaintiff. Loss of amenities has a separate head of injuries and covers deprivation of ordinary experience and enjoyment of life. It is customary to award a lump sum as damages covering both the heads. Loss of expectation of life has a separate head of damages when a normal expectation of life is shortened as a result of injury.

However, suffering experienced by the plaintiff from the awareness that his life expectancy has been shortened will fall under the head pain and suffering and not under the head loss of expectation of life. Quantification of damages for non-pecuniary damages such as pain and suffering and loss of amenities presents great difficulties.

The Court cannot restore a person to the state of health which he enjoyed before he suffered a serious injury to his body or brain. The Court can award only reasonable compensation to the plaintiff for his suffering the assessment of which is essentially a guess work. The rules which have developed by the judicial traditions are-

(i) amount of compensation awarded must be reasonable and must be assessed with moderation;

(ii) regard must be had to awards made in comparable cases; and

(iii) the sums awarded must to a considerable extent be conventional.

In Rehana vs, Ahemdabad Municipal Transport Service, the High Court of Gujarat has held that in cases of personal suffering the general damages can be given under three heads:

(i) personal injury and loss of enjoyment of life;

(ii) actual pecuniary loss resulting in any expenses reasonably incurred by the plaintiff; and

(iii) the probable future loss of income by reason of incapacity or diminishing capacity of work.

In Vinod Kumar Srivastava vs Ved Mitra, a Division Bench of Madhya Pradesh High Court has held damages for loss of expectation of life are awarded when the expectation of life is shortened as a result of the injuries and are to be assessed by putting a money value on the prospective balance of happiness in the years that the injured might have otherwise lived.

On the other hand, damages for loss of amenities of life, which is a separate head of damages, are to be awarded when the injured is deprived for the period he lives of ordinary experiences and enjoyment of life.

Several observations on impact of curtailment of expectation of life made by the House of Lords in Rose vs Ford 1937(3) All England Reports 359 are illuminating. Lord Atkin observed (at page 362):

“Aman is injured in the prime of life. Evidence is given that he is not likely to live more than two or three years. The tribunal estimating damages will take this fact into account, not only in estimating actual money loss, for he may not be in a position to earn, or be capable of earning anything, but also as an item of personal damage. It does not seem to me necessary to say that a man has a personal right, of the nature of property, in his life, so that, when it is diminished he loose something, I do not say that this is not so, but I am satisfied that the injured person is damnified by having cut short the period during which he had a normal expectation of enjoying life and that the loss damnum, is capable of being estimated in terms of money, and that the calculation should be made”

“Lord Russell of Killowen observed at pp.365- 366: I am of opinion that, if a person’s expectation of life is curtailed, he is necessarily deprived of something of value, and that, if that loss to him is occasioned by the negligence of another, that other is liable to him in damages for the loss.”

Lord Wright Observed at pp. 371, 372 : “Aman has a legal right in his own life, I think he has a legal interest entitling him to complain if the integrity of his life is impaired by tortious acts not only in regard to pain, suffering, and disability, but also in regard to the continuance of life for its normal expectancy. A man has a legal right that his life should not be shortened by tortious act of another. His normal expectancy of life is a thing of temporal value, so that its impairment is something for which damages should be given.”

Actual and prospective loss

According to Charlesworth and Percy (ibid, para 4:117 to 4:121, pp. 346-348), the injured party is entitled to damages for his loss both actual and prospective. The actual financial loss may consist of loss of earning, medical, nursing expenses, additional cost of buying invalid diet, damage to cloth, employment of extra household or other assistance and any other loss which is the direct consequence of the injury, including the cost of convalescence after an injury necessitating a change of air in some place away from the injured party’s home.

Future pecuniary loss as estimated form of financial loss which is likely to be supplied by the injured party, after the date of trial, and necessarily, will include such matters as his prospective loss of earning, any loss of his future earning capacity, any extra expenses, including the cost of special accommodation, where the plaintiff has suffered catastrophic injuries.

The learned authors further say:

“Amongst the loss of the amenities of life, there are to be considered: the injured person’s inability to engage in indoor or outdoor games; his dependence, to a greater or less extent, on the help of others in his daily life; the inability to cope by looking after, caring for and rendering the accustomed services to a dependent; his sexual impotence; the loss of happiness and satisfaction in bringing her pregnancy to a successful conclusion; the premature onset of her menopause; any prejudice to the prospects of marriage; and his inability to lead the life he wants to lead and was able to lead, before his injuries. In this connection, the age of the injured person must be taken into account, since an elderly person or a very young child will not suffer the same loss in this respect as a young adult “. (para 4:107, pp.340-341)

“Wages lost can be recovered, even though they have been paid by the employer if the plaintiff is under a moral obligation to repay them, in the event of his recovering such loss from the defendant.” (para 4:122,p.349)

It is easy to say that the plaintiff is entitled to compensate himself for the loss flowing from the direct consequences resulting from the tort but it is difficult to define the same.

According to Charlesworth & Percy ( para 4:16,page 295,ibid ) a direct consequence means that there is no independent cause intervening between negligence and the damage.

Lost earning capacity

As to `lost earning capacity’ Winfield & Jolowicz on Tort, (13th Edn 1989) state at page 621:

“Loss of earning capacity. In cases of continuing disability the plaintiff may be able to remain in his employment but with the risk that, if he loses that employment at some time in the future, he may then, as a result of his injury, be at a disadvantage in getting another job or an equally well- paid job. This “loss of earning capacity” has always been a compassable head of damage but has come into more prominence in recent years, probably as a result of the growth of the practice of “itemizing” awards.

Assessment of damages under this head may be highly speculative and clearly no mathematical approach is possible; but the court would be satisfied that there is a substantial or “real” risk that the plaintiff will be subject to the disadvantage before the end of his working life. If so satisfied, the judge must then do his best to value the “chance”, taking into account all the facts of the case.”

Loss of expectation of life

Winfield deals with the concept of loss of expectation of life by naming it as theory of lost years. Damages for loss of earning are to be assessed on the plaintiff’s expectation of life before the accident making a deduction in respect of money which the plaintiff would have spent on his own support during the lost years.

In Davies vs. The Mayor Alderman and Burgesses of the Borough of Tenby, 1974(2) Llr 469, Lloyd’s Lw Reports plaintiff having sustained the injuries on account of slip from the end of the diving board because its mountings were loose was held entitled to recovery of damages on the following heads:

“a) Loss of earnings until trial b) Loss of earnings from trial onwards c) Loss of expectation of life d) Pain and suffering and loss of amenities e) Contingency of the wife breaking down and having to employ assistance.”

In R.D. Hattangadi vs. Pest Control India) Pvt Ltd , their Lordships have held: ( vide para 9) :

“Broadly speaking while fixing an amount of compensation payable to a victim of an accident, the damages have to be assessed separately as pecuniary damages and special damages. Pecuniary damages are those which the victim has actually incurred and which are capable of being calculated in terms of money; whereas non-pecuniary damages are those which are incapable of being assessed by arithmetical calculations.

In order to appreciate two concepts pecuniary damages may include expenses incurred by the claimant:

(i) medical attendance;(ii) loss of earning of profit up to the date of trial; (iii) other material loss. So far non- pecuniary damages are concerned, they may include

(i) damages for mental and physical shock, pain and suffering, already suffered or likely to be suffered in future;

(ii) damages to compensate for the loss of amenities of life which may include a variety of matters i.e. on account of injury the claimant may not be able to walk, run or sit;

(iii) damages for the loss of expectation of life, i.e. on account of injury the normal longevity of the person concerned is shortened;

(iv) inconvenience, hardship, discomfort, disappointment, frustration and mental stress in life.”

Concept of exemplary damages by reference to paying capacity of wrongdoer has been recognised in M.C. Mehta vs Uoi, as under:

“The measure of compensation in these kinds of cases must be correlated to the magnitude and capacity of the enterprise because such compensation must have a deterrent effect. The larger and more prosperous the enterprise, the greater must be the amount of compensation payable by it for the harm caused on account of an accident in the carrying on of the hazardous or inherently dangerous activity by the enterprise.”

Reference

Klaus Mittelbachert vs East India Hotels Ltd.: 1999 ACJ 287