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.pdfDamages, Collateral Benefits and Precedent Author(s): Gerald Dworkin
Source: The Modern Law Review, Vol. 26, No. 3 (May, 1963), pp. 315-318 Published by: Blackwell Publishing on behalf of the Modern Law Review
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MAY 1963 |
NOTES OF CASES |
815 |
could be said that English judgments tend to be stronger on principle and reasoning than they are exhaustive of the authorities, whereas Commonwealth judgments devote more space to the authorities. On this footing, what could be more admirable than a
16
J. H. S. ELLIOTT.
DAMAGES, COLLATERALBENEFITS AND PRECEDENT
Browning v. War Office 1 is an important case on the assessment of
damages and also provides an outstandingly clear example of how judges use the rules of precedent to assist them in reaching the results they desire.
The plaintiff, a United States Air Force serviceman, was injured in a motor accident for which the defendants were responsible. He was discharged as a result of his injuries and became entitled to a veteran's benefit. This was a disability pension, amounting to nearly half his previous pay, which the plaintiff was entitled to under United States legislation, and it could not be withheld or reduced in any circumstances. The plaintiff's pecuniary loss in
respect of future earnings was assessed at ?25,111, but the defendants claimed that the value of the disability pension should be
deducted from this sum, thus reducing this head of damnageby
?18,000 to ?7,111.
By a majority decision 2 the Court of Appeal held that the
disability pension must be brought into account, and the plaintiff was only entitled to the lower sum.
The fundamental principle behind the decision was that reaffirmed by the House of Lords in British Transport Commission
v. Gourley 3: damages in the law of torts are based on compensation and not punishment. The plaintiff should not be able to recover damages from the defendant so as to place himself in a
better position financially than before the accident. To emphasise that the primary object of the law of torts is restitution and not retribution, Diplock L.J. refused to describe the defendant by the
" emotive" labels of " wrongdoer " or even " tortfeasor." No doubt this attitude is too sensitive, but the learned judge went on to refer to the realities of life: ". . . in the great majority of cases the damages awarded are in fact paid by an insurance company, and if damages are to be punitive, the punishment will be inflicted,
not upon the defendant but upon his insurance company, which, if it is to remain in business, will recoup the amount awarded against
the defendant from the premium income obtained from its general
16 |
Lawyer |
and Litigant |
in |
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(1962), pp. |
162-163. |
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1 |
[1963] |
2 W.L.R. 52; |
[1962] 3 All E.R. |
1089 |
(C.A.). |
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2 Lord Denning M.R. |
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Diplock |
L.J.; |
Donovan L.J. dissenting. |
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3 |
[1956] |
A.C. 185. |
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THE MODERN LAW REVIEW |
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VOL. 26 |
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The |
principle |
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simple compensation, |
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however, |
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is |
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plete answer when the plaintiff receives |
collateral |
benefits. |
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In |
many |
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he is |
entitled |
to |
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full |
damages |
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from |
the |
defendant |
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without |
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taking |
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into |
account |
these |
benefits. |
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This |
has |
legislative |
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recognition, |
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for |
example, |
in |
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the |
Fatal |
Accidents |
Acts, |
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1846 |
to |
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1959, |
where |
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insurance |
moneys, |
benefits |
and |
pensions |
are ignored |
when |
awarding |
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compensation |
to dependants |
of the |
deceased |
victim; |
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and |
the |
courts, |
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too, |
have |
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recognised |
this, |
for |
example, |
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by |
holding |
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that |
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money |
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received |
by a plaintiff |
under |
an |
accident |
insurance |
policy |
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cannot |
be |
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applied |
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in |
reduction |
of |
the damages |
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awarded |
to |
him.5 |
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These |
rules |
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for |
disregarding |
collateral |
benefits |
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have |
been |
criticised,6 |
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but |
they |
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are too |
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firmly |
entrenched |
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to be removed |
easily. |
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tell, |
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then, |
whether collateral |
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benefits |
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be |
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taken |
into |
account |
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or ignored? |
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The |
cases |
provide |
no clear |
answer; |
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decisions |
have |
been |
based |
on |
rules |
of |
remoteness, |
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the |
difficult |
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distinction |
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between causa causans and causa sine |
qua |
non, |
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the |
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nature |
of damages |
generally, |
and the source from which |
the |
benefit |
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has |
come. |
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Lord |
Denning's |
test |
is |
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simple, |
yet |
difficult |
to |
apply |
in |
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practice. |
In |
his |
opinion, |
all |
collateral |
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benefits |
should |
be |
taken |
into |
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account, |
except |
in |
so |
far |
as |
it |
would |
not |
be fair |
or |
just |
to |
require |
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the |
plaintiff |
to do |
so, and |
the decided |
cases |
where collateral |
benefits |
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have |
been |
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disregarded |
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illustrate |
this. |
Thus, |
a |
plaintiff |
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need |
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not |
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bring |
into |
account |
charitable |
gifts made to him, or insurance |
bene- |
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fits, |
or |
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sums |
advanced |
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to |
him |
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which |
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he |
is |
under |
an |
obligation |
to |
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repay. |
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On |
the |
other |
hand, |
wages |
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paid |
during disability, |
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sick |
pay |
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and |
disability |
pensions |
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were |
all |
essentially |
similar |
and |
must |
be |
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brought |
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into |
account. |
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Bbth |
Lord |
Denning |
and |
Diplock |
L.J. |
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were |
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satisfied |
about this. |
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However, |
the Court of Appeal did not |
have |
an entirely |
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free hand |
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because |
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it |
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was |
confronted |
with |
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highly |
relevant |
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precedent. |
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In |
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Payne |
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v. |
Railway |
Executive |
7 the |
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plaintiff |
was |
a |
sailor |
serving |
in |
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the |
Royal |
Navy |
when |
he |
was |
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injured |
as |
the |
result |
of |
the |
defen- |
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dants' |
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tort. |
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He, |
too, |
received |
a disability |
pension, |
and |
the |
defen- |
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dants claimed that this pension |
should |
be brought |
into |
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account |
to |
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reduce |
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the |
damages. |
The |
Court of |
Appeal |
refused |
to |
allow |
this. |
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Cohen |
L.J.'s |
reason |
for |
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his decision |
was |
that |
one |
could |
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not |
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distin- |
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guish |
between |
insurance |
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moneys paid to |
a |
plaintiff |
when |
he |
was |
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injured |
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and |
a pension |
given |
by |
employers |
when |
he |
suffers |
injury. |
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In the former case the plaintiff |
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pays |
for |
his |
benefit |
by |
a |
premium, |
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and |
in |
the |
latter |
case |
by |
working, |
possibly |
for |
less |
money, |
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because |
4 Cf. the refusal to look at the realities of insurance by the majoritv of the |
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House of Lords in Lister |
v. |
Romford |
Ice |
and Cold |
Storage |
Co. [1957W |
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A.C. |
555. |
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s Bradburn v. Gt. Western Ry. |
(1874) L.R. 10 Ex. 1. |
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6 |
e.g., |
G. |
Ganz, |
"Mitigation |
of |
Damages |
by |
Benefits |
Received" |
(1962) 25 |
7 |
M.L.R. |
559. |
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[1952] 1 |
K.B. |
26 (C.A.) |
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M.Y 1963 NOTES OF CASES 817
of the fringe benefit contained in the contract of employment.
Singleton L.J. was also prepared to adopt this reasoning. How- ever, he preferred to base his judgment on the ground that the pension was not payable to the plaintiff as of right. The Minister of Pensions could withhold or reduce the pension because of the
(Cohen L.J. regarded this fact as irrelevant, though comforting. He would have reached the same conclusion if the plaintiff had had a legal right to the continuance of the pen-
sion.) The third judge, Birkett L.J., gave the following judgment: " I agree with the two judgments which have just been delivered both in their reasoning and their conclusion."
Faced with this decision, the members of the court in Browning
v. War Office dealt with it to produce their desired result. |
Dono- |
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van L.J., |
as a matter of principle, was in favour of ignoring the |
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disability |
pension.8 He, therefore, felt that |
Payne v. |
Railway |
Executive |
was binding and must be followed. |
The ratio of that |
decision covered the present case, notwithstanding that Singleton L.J. gave and preferred an additional reason for his judgment. He could not accept that Payne's case was impliedly overruled by Gourley's case. Gourley did not refer to Payne's case, and, in any event, there was a distinction between the situations since Gourley
was concerned with bringing into account a liability of the plaintiff (income tax) whereas Payne's case concerned bringing into account
an asset of the plaintiff. This is certainly a fine distinction, but the justification of Donovan L.J. was that " in this field logic is conspicuous by its absence."
Diplock L.J. treated the reasoning of Cohen L.J. as the ratio decidendi of the case, but was able to evade it by showing that this principle was contrary to the later House of Lords decision in British Transport Commission v. Gourley and was, therefore, no longer binding on the Court of Appeal. This is a perfectly orthodox application of one of the rules in Young v. Bristol Aeroplane Co.,9 and calls for no comment.
Lord Denning, however, overcame the difficulties of Payne's case by using his novel approach to precedent. Since there were two grounds to the decision in Payne's case, it was open to the Court of Appeal to overrule one ground and accept the other as of binding force. discarded the reasoning of Cohen L.J. and adopted the reasoning of Singleton L.J. In this way, Payne was distinguishable because there the pension could be withheld or reduced. Lord Denning had introduced this method of
dealing with cases containing more than one ratio decidendi in a series of cases ending with Betty's Cafes, Ltd. v. Phillips Furnish-
ing Stores, Ltd.10 It is an approach which has not been expressly
8 This view is supportedby some academic writers, e.g., Street, Principles |
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9 |
of the Law of Damages (1962), pp. 81-82; Jolowicz [1960] C.L.J. 214, 221. |
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[1944] |
K.B. 718 (C.A.). |
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10 |
[1959] |
A.C. 20 at p. 53. |
318 THE MODERN LAW REVIEW VOL. 26
approved by any other judges, although it appears to have been recognised by Lord Evershed," but if it is accepted, it will become a further major exception to the rule in Young v. Bristol Aeroplane Co. that the Court of Appeal is bound by its own decisions. It is an exception contrary to authority which could well weaken precedent in the Court of Appeal.12 Perhaps a better approach to the problem of dealing with earlier questionable binding authorities is to relax the rule in Young v. Bristol Aeroplane Co. which denies to a full court any greater authority than a court of three judges and allow the Court of Appeal to adjourn a case to be re-argued before a full court of five or more judges.13 This system appears to work well in the Court of Criminal Appeal.
The result of the case, therefore, is that the compensation theme of Gourley continues to spread, the concept of precedent in the Court of Appeal is weakened a little further, and the law relating to collateral benefits remains difficult and illogical.
GERALDDWORKIN.
DOMICILIARY TREATMENT AND DIVORCE FOR INSANITY
THEcase of Dunn v. Dunn,' to which Mr. Samuels makes a brief reference in his' interesting article concerning divorce on the grounds (sic) of incurable unsoundness of mind,2 may prove to be a more important decision than at first sight appears.
In this case a husband petitioned for divorce on the ground of his wife's incurable insanity. The couple were married in 1950 and the only child of the marriage was born in June 1953. During her pregnancy, if not before, the wife had shown signs of mental instability and from the date of the child's birth until January 1957 she was in and out of hospital on this account. On January 26, 1957, she was admitted to a mental hospital as a voluntary patient under the Mental Treatment Act, 1930, and had been there ever since, apart from temporary absences. On two occasions her absence from hospital lasted for more than twenty-eight days; from November 4, 1960, until January 1, 1961, she was living with
her stepmother with the approval of the hospital authorities, the stepmother being entrusted with certain medicines by the hospital and instructed how to administer them; and a second absence in
identical circumstances occurred from August 5, 1961, until September 3, 1961.
11 Craddock v. Hampshire C.C. [1958] 1 W.L.R. 202 at p. 209. 12 See Cross, Precedent in English Law (1961), pp. 86-89.
13 See Megarry (1958) 74 L.Q.R. 37-38, 350. 1 Dunn v. Dunn [1963] 1 All E.R. 440.
2 Alec Samuels, "Problems |
in |
the Law Relating |
to Divorce |
on |
the Grounds |
of Incurable Unsoundness |
of |
Mind " (1963) 26 |
M.L.R. 1. |
The |
reference to |
Dunn v. Dunn is on p. 9, note 20.