THE LAW COMMISSION
DAMAGES FOR PERSONAL INJURY:MEDICAL, NURSING AND OTHER EXPENSES
PART I: INTRODUCTION 1.1-1.7 1
PART II: THE PRESENT LAW 2.1-2.83 4
1. MEDICAL AND NURSING EXPENSES AND OTHERCOSTS OF CARE
(1) The General Position 2.2-2.4 4
(2) Section 2(4) of the Law Reform (Personal Injuries) Act 1948 2.5-2.15 6(a) The statutory wording 2.5 6(b) Legislative history 2.6-2.8 7(c) Empirical evidence 2.9 8(d) The case law 2.10-2.14 8(e) Road Traffic Act 1988, sections 157-158 2.15 10
(3) Care provided free of charge to the plaintiff by relations orother private parties
(a) Who suffers the loss? 2.21-2.29 12(b) Care provided by defendant 2.30-2.32 15(c) The quantum of damages 2.33-2.36 17
(4) Loss of the plaintiffs ability to do work in the home 2.37 19
(5) Hospital visits 2.38 20
2. THE PLAINTIFFS ACCOMMODATION 2.39-2.47 20
3. THE MANAGEMENT OF THE PLAINTIFFS AFFAIRS 2.48-2.52 24
(1) Court of Protection 2.48-2.51 24
(2) Financial advisers fees 2.52 25
4. OTHER EXPENSES 2.53-2.58 26
(1) Aids and appliances 2.54 26
(2) Cost of a car 2.55-2.56 26
(3) Holidays 2.57 27
(4) Other items 2.58 27
5. LOSSES ARISING OUT OF THE PLAINTIFFS DIVORCE 2.59-2.63 28
6. THE MULTIPLIER 2.64-2.74 29
(1) The multiplier approach 2.64-2.65 29
(2) Period of expense 2.66 30
(3) The traditional rate of discount 2.67 31
(4) The multiplier method - our critique 2.68 31
(5) The recent legislation 2.69 32
(6) The Court of Appeals reaffirmation of the traditionalapproach
7. INTEREST ON DAMAGES FOR PECUNIARY LOSS 2.75-2.83 34
PART III: OPTIONS FOR REFORM 3.1-3.118 39
1. MEDICAL AND NURSING EXPENSES AND OTHERCOSTS OF CARE
(1) Section 2(4) of the Law Reform (Personal Injuries) Act 1948 3.2-3.18 39(a) Duty to mitigate 3.7-3.9 40(b) Plaintiff using NHS facilities having obtained damages forprivate medical expenses
(c) Insurance and cost 3.14-3.18 42
(2) Recoupment of costs by the National Health Service 3.19-3.42 44(a) Introduction 3.19-3.20 44(b) The argument of principle 3.21 45(c) Analogies 3.22-3.24 45(d) Some possible policy or practical objections to recoupment 3.25-3.35 46
(i) Taking with one hand to give back with the other? 3.25-3.27 46(ii) Cost of recoupment 3.28-3.30 47(iii) Costing NHS treatment 3.31-3.33 49(iv) Hindering settlements 3.34 50(v) Encouraging unnecessary treatment 3.35 50
(e) What form should the recoupment scheme take? 3.36-3.42 50
(3) Care provided free of charge to the plaintiff by relations orother private individuals
(a) The general position 3.43-3.58 56(b) Care provided by the defendant 3.59-3.68 62(c) The quantum of damages 3.69-3.72 66
(4) Loss of the plaintiffs ability to do work in the home 3.73-3.78 68
(5) Hospital visits 3.79-3.80 70
2. THE PLAINTIFFS ACCOMMODATION 3.81-3.97 71
(1) Purchase of suitable accommodation 3.81-3.91 71(a) The basic approach 3.81-3.84 71(b) The appropriate rate 3.85-3.89 72(c) Accommodation purchased by persons other than the plaintiff 3.90-3.91 74
(2) The cost of alterations 3.92-3.97 76(a) Alterations enhancing value 3.93-3.96 76(b) Alterations not enhancing value 3.97 78
3. THE MANAGEMENT OF THE PLAINTIFFS AFFAIRS 3.98-3.103 78
(1) Court of Protection 3.98-3.100 78
(2) Financial advisers fees 3.101-3.103 79
4. LOSSES ARISING OUT OF THE PLAINTIFFS DIVORCE 3.104-3.111 81
5. INTEREST ON DAMAGES FOR PECUNIARY LOSS 3.112-3.117 84
6. OTHER QUESTIONS 3.118 86
PART IV: SUMMARY OF RECOMMENDATIONSAND CONSULTATION ISSUES
APPENDIX: OTHER JURISDICTIONS A.1-A.85 93
SCOTLAND A.1-A.16 93
IRELAND A.17-A.29 99
AUSTRALIA A.30-A.44 104
NEW ZEALAND A.45-A.56 110
CANADA A.57-A.66 114
THE UNITED STATES A.67-A.77 119
OTHER EUROPEAN JURISDICTIONS A.78-A.85 123
1.1 In this paper we deal with the damages that are awarded, in a personal injuryclaim, for the victims medical, nursing and other expenses. It is a topic thatraises several questions of wide-ranging interest and importance, such as:-
Even if a plaintiff could have avoided expense by using the NationalHealth Service,1 that possibility must be disregarded by the court inawarding the plaintiff damages for the expenses of private medical andnursing care. Should this be changed?2
Where a plaintiff does take advantage of treatment by the NHS, thetreatment is provided free of charge, but there is generally no mechanismwhereby the NHS can recoup its expenses in providing the care from thedefendant. Should such a mechanism be introduced?3
A large proportion of the care of victims of personal injury is carried outby individual carers such as spouses and other family members. Theburden involved is often very great.4 What, then, should the approach beto the award of compensation in respect of the services which areprovided free of charge by carers?5
1.2 This is the fifth consultation paper arising from the Law Commissions currentreview of damages. Under item 2 of the Sixth Programme of Law Reform6 we areto examine the principles governing, and the present effectiveness of, damagesfor monetary and non-monetary loss, with particular regard to personal injurylitigation. Certain matters to which specific consideration is to be giveninclude: ... (b) awards to cover medical, nursing and other expenses incurred bythe plaintiff.... We should emphasise from the outset that, in line with our termsof reference,7 our role in this review is not to advocate the replacement of the
1 For the sake of brevity, we shall throughout this paper be referring to the National HealthService as the NHS.
2 Law Reform (Personal Injuries) Act 1948, s 2(4). See paras 2.5-2.14 and 3.2-3.18 below.3 See paras 3.19-3.42 below.4 See our empirical report Personal Injury Compensation: How Much is Enough? (1994)
Law Com No 225, para 3.11, where one carer described his situation to our researchers:
Driving me bloody crackers sometimes, Ill tell you. You know what I mean; itsaffecting me in a way ... having to look after her ... Ive been doing this since she cameout of hospital which is six years ago ... I need a break, and I do need a break, theresno doubt about it.
5 See paras 2.16-2.36 and 3.43-3.72 below.6 Sixth Programme of Law Reform (1995) Law Com No 234, item 2; formerly Fifth
Programme of Law Reform (1991) Law Com No 200, item 11.7 See especially the description of item 11 of the Fifth Programme of Law Reform (1991)
Law Com No 200.
existing tort system but rather, assuming its continued existence, to recommendimprovements to it.
1.3 The four previous consultation papers dealt with structured settlements andinterim and provisional damages;8 aggravated, exemplary and restitutionarydamages;9 liability for psychiatric illness;10 and non-pecuniary loss in personalinjury cases.11 We have published a Report on structured settlements and interimand provisional damages,12 and its recommendations have largely beenimplemented.13 We have also published a report containing a study based on theresults of a large-scale survey of victims of personal injury.14 The data in thatempirical report have been particularly relevant to our work on this paper.
1.4 Damages recoverable for medical, nursing and other expenses can often be verysubstantial when the plaintiff suffers a serious injury.15 The general rule is that theplaintiff can recover medical, nursing and other expenses reasonably incurred, orreasonably to be incurred, as a result of an actionable personal injury.16 Typically,expenses incurred by seriously injured victims range, at one end of the scale, fromthe expenses of surgery and treatment provided by doctors, through the expensesof skilled nursing care, physiotherapy and other forms of therapy, to moreancillary, but still essential, expenses such as the cost of a carer to help withwashing and dressing, laundry and shopping. In addition to these expenses, theplaintiff will be entitled to recover the cost of rehabilitative measures such asspecial appliances needed to cope with physical disability, the cost of newaccommodation or of altering the plaintiffs existing home to take account of theplaintiffs disability, the cost of modifications to the plaintiffs car, and other
8 (1992) Consultation Paper No 125.9 (1993) Consultation Paper No 132.10 (1994) Consultation Paper No 137.11 (1996) Consultation Paper No 140.12 (1994) Law Com No 224. The Report also deals with other aspects of the assessment of
lump sum damages in personal injury actions, such as the use of actuarial tables anddiscounting using the rates of return on Index-Linked Government Securities.
13 The recommendations on the tax treatment of structured settlements were implementedby the Finance Act 1995, s 142, inserting new sections 329A and 329B into the Incomeand Corporation Taxes Act 1988; the recommendation relating to the admissibility, asevidence, of the actuarial tables issued by the Government Actuarys Department (theOgden Tables) was implemented by the Civil Evidence Act, s 10. The remainder of therecommendations have been substantially implemented by the Damages Act 1996, whichreceived Royal Assent on 24 July 1996, and came into force on 24 September 1996.
14 Personal Injury Compensation: How Much is Enough? (1994) Law Com No 225.15 A recent example is Wells v Wells, The Times 24 October 1996, in which the plaintiff, who
suffered brain damage in a road accident, recovered 582,680 for damages for care andother expenses as part of a total award of 700,364, the Court of Appeal substituting thesefigures for an award made at first instance totalling 1,594,040.
16 See, eg, Cunningham v Harrison  QB 942. It is sometimes added that the servicesmust be reasonably necessary in order for their cost to be recoverable. But in our view thisnotion is encompassed by the wider principle that the expenses must be reasonablyincurred.
increased living expenses such as higher fuel bills and the additional costs ofholidays.
1.5 The plaintiffs needs can be met from various sources. Apart from, for example,the possibility of obtaining and paying for nursing privately, nursing care may be,and frequently is, provided free of charge by a spouse or other relation, or byfriends. In addition, free treatment will generally be available through the NHS.As we shall see, the availability of such free treatment and care gives rise to somedifficult issues in determining a victims entitlement to damages.
1.6 Part II of this paper deals with the current law17 relating to the topics underdiscussion;18 in Part III we set out the options for reform; and Part IV contains asummary of our provisional recommendations and of the issues on which weinvite responses. This is followed, in the Appendix, by a brief survey of the law insome other jurisdictions.
1.7 We would like to thank the following for the help they have given us with thispaper: the Association of British Insurers, the Association of Personal InjuryLawyers, the British Medical Association, Mr A Edwards of the Department ofHealth and Mr J W Davies of Brasenose College, Oxford.
17 While we have delayed the publication of this paper to take account of the Court ofAppeals decision in Wells v Wells, Thomas v Brighton HA and Page v Sheerness Steel plc, TheTimes 24 October 1996 (see paras 2.39-2.52, 2.64-2.74 and 3.81-3.97), consultees shouldnote that we have had a very short period of time in which to consider that judgment.
18 This excludes matters of practice and procedure. See, however, the report of Lord Woolfsrecently completed review of civil procedure Access to Justice: Final Report (1996) (and seealso Access to Justice: Interim Report (1995)). In the course of our work on this paper weidentified two areas of procedure in personal injury actions which might particularlybenefit from further examination, namely the standardisation of schedules of expensesclaimed by the plaintiff, and the use of standard tables to quantify certain items of expensesuch as commercially provided nursing care and motoring expenses. We have drawn theseto the attention of the Lord Chancellors Department, which is responsible for theimplementation of the recommendations of Lord Woolfs review.
PART IITHE PRESENT LAW
2.1 We divide our analysis of the present law into seven sections as follows:- 1.Medical and Nursing Expenses and Other Costs of Care;1 2. The Plaintiff sAccommodation;2 3. The Management of the Plaintiff s Affairs;3 4. OtherExpenses;4 5. Losses Arising out of the Plaintiff s Divorce;5 6. The Multiplier;6 7.Interest on Damages for Pecuniary Loss.7
1. MEDICAL AND NURSING EXPENSES AND OTHER COSTS OFCARE
(1) The General Position
2.2 A plaintiff is entitled to recover any medical and nursing expenses, and any othercosts of care (for example, the costs of engaging a housekeeper or paying forhospital visits) that have been reasonably incurred, or will reasonably be incurred,as a result of his or her actionable injuries.8 But if the plaintiff does not incurthese expenses, because he or she makes use of the NHS or services providedfree of charge by a local authority,9 the plaintiff cannot recover what would have
1 See paras 2.2-2.38 below.2 See paras 2.39-2.47 below.3 See paras 2.48-2.52 below.4 See paras 2.53-2.58 below.5 See paras 2.59-2.63 below.6 See paras 2.64-2.74 below.7 See paras 2.75-2.83 below.8 See para 1.4 and n 16 above. See also, generally, J Munkman, Damages for Personal Injuries
and Death (9th ed 1993) p 80 ff; McGregor on Damages (15th ed 1988) p 940 ff. Pastexpenses and an estimate of future expenses should be included in the plaintiffs claim forspecial damages; Rules of the Supreme Court O 18 r 12 (1A-C); County Court Rules O 6r 1(5)-(7). Many other jurisdictions apply a reasonableness criterion: see, eg, paras A.30and A.57 below.
9 Under the Health and Social Services and Social Security Adjudications Act 1983, s 17, alocal authority is entitled to recover such charge (if any) as the authority considersreasonable from the recipient of services provided under various statutory provisions(such as National Assistance Act 1948, s 29). If the recipient satisfies the local authoritythat his or her means are insufficient for it to be reasonably practicable to pay the amountwhich would otherwise have been charged, the authority may not charge more than thesum which is reasonably practicable. (Provisions which are slightly different in detail, butsimilar in terms of the relevance of means, are contained in the Children Act 1989, s 17,in relation to services provided to disabled children and other children in need.) In AvonCC v Hooper (unreported, 22 February 1996) the Court of Appeal held that means forthese purposes includes the existence of a claim for negligence. Therefore, where a chargefor services can be made it is likely that the local authority will charge the plaintiff who hasa personal injury claim for those services, and he or she will have to recover the past andfuture expenses in the same way as the expense...