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Damages, 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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marriage of the two ?

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

England

(1962), pp.

162-163.

1

[1963]

2 W.L.R. 52;

[1962] 3 All E.R.

1089

(C.A.).

2 Lord Denning M.R.

and

Diplock

L.J.;

Donovan L.J. dissenting.

3

[1956]

A.C. 185.

 

 

 

 

 

316

 

 

 

 

 

 

 

 

 

THE MODERN LAW REVIEW

 

 

 

 

 

 

 

 

VOL. 26

body

 

of

policy

 

holders-the

 

 

whipping

 

boys

of

the

 

twentieth

century.

'

4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The

principle

of

simple compensation,

 

however,

 

is

not

the

com-

plete answer when the plaintiff receives

collateral

benefits.

 

In

many

cases

he is

entitled

to

 

full

damages

 

from

the

defendant

 

without

taking

 

into

account

these

benefits.

 

This

has

legislative

 

recognition,

for

example,

in

 

the

Fatal

Accidents

Acts,

 

1846

to

 

1959,

where

insurance

moneys,

benefits

and

pensions

are ignored

when

awarding

compensation

to dependants

of the

deceased

victim;

 

and

the

courts,

too,

have

 

recognised

this,

for

example,

 

by

holding

 

that

 

money

received

by a plaintiff

under

an

accident

insurance

policy

 

cannot

be

applied

 

in

reduction

of

the damages

 

awarded

to

him.5

 

These

rules

for

disregarding

collateral

benefits

 

have

been

criticised,6

 

but

they

are too

 

firmly

entrenched

 

to be removed

easily.

 

 

 

 

 

 

 

 

 

 

 

 

 

When

can one

tell,

 

then,

whether collateral

 

benefits

must

be

taken

into

account

 

or ignored?

 

The

cases

provide

no clear

answer;

decisions

have

been

based

on

rules

of

remoteness,

 

the

difficult

distinction

 

between causa causans and causa sine

qua

non,

 

the

nature

of damages

generally,

and the source from which

the

benefit

has

come.

 

Lord

Denning's

test

is

 

simple,

yet

difficult

to

apply

in

practice.

In

his

opinion,

all

collateral

 

benefits

should

be

taken

into

account,

except

in

so

far

as

it

would

not

be fair

or

just

to

require

the

plaintiff

to do

so, and

the decided

cases

where collateral

benefits

have

been

 

disregarded

 

illustrate

this.

Thus,

a

plaintiff

 

need

 

not

bring

into

account

charitable

gifts made to him, or insurance

bene-

fits,

or

 

sums

advanced

 

to

him

 

which

 

he

is

under

an

obligation

to

repay.

 

 

On

the

other

hand,

wages

 

paid

during disability,

 

sick

pay

and

disability

pensions

 

were

all

essentially

similar

and

must

be

brought

 

into

account.

 

Bbth

Lord

Denning

and

Diplock

L.J.

 

were

satisfied

about this.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

However,

the Court of Appeal did not

have

an entirely

 

free hand

because

 

it

 

was

confronted

with

a

highly

relevant

 

precedent.

 

In

Payne

 

v.

Railway

Executive

7 the

 

plaintiff

was

a

sailor

serving

in

the

Royal

Navy

when

he

was

 

injured

as

the

result

of

the

defen-

dants'

 

tort.

 

He,

too,

received

a disability

pension,

and

the

defen-

dants claimed that this pension

should

be brought

into

 

account

to

reduce

 

 

the

damages.

The

Court of

Appeal

refused

to

allow

this.

Cohen

L.J.'s

reason

for

 

his decision

was

that

one

could

 

not

 

distin-

guish

between

insurance

 

moneys paid to

a

plaintiff

when

he

was

injured

 

and

a pension

given

by

employers

when

he

suffers

injury.

In the former case the plaintiff

 

pays

for

his

benefit

by

a

premium,

and

in

the

latter

case

by

working,

possibly

for

less

money,

 

because

4 Cf. the refusal to look at the realities of insurance by the majoritv of the

 

House of Lords in Lister

v.

Romford

Ice

and Cold

Storage

Co. [1957W

 

A.C.

555.

 

 

 

 

 

 

 

s Bradburn v. Gt. Western Ry.

(1874) L.R. 10 Ex. 1.

 

 

6

e.g.,

G.

Ganz,

"Mitigation

of

Damages

by

Benefits

Received"

(1962) 25

7

M.L.R.

559.

 

 

 

 

 

 

 

[1952] 1

K.B.

26 (C.A.)

 

 

 

 

 

 

Thus Lord Denning
award of damages.

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-

van L.J.,

as a matter of principle, was in favour of ignoring the

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

9

of the Law of Damages (1962), pp. 81-82; Jolowicz [1960] C.L.J. 214, 221.

[1944]

K.B. 718 (C.A.).

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.