Nov. 19791 NOTES OF CASES 72 1

Professor Guest’s approach by differentiating between material and and non-material changes in the reply.a’ A material change evokes the traditional approach whilst a non-material alteration is subjected to Professor Guest’s analysis. In Butler Bridge L.J. left open 28 the question of whether Article 7 reflected the present law. It is suggested that arguments analogous to Article 7 should be resisted. For they would raise a similar problem of categorisation to that considered in relation to Lord Denning’s analysis. Indeed present indications are that developments akin to Article 7 would do little to solve Battles of Forms. For the scope of non-material terms in Article 7 appears to be extremely limited. Thus it probably does not encompass conditionsa9 nor, for two members of the Court of Appeal, the differences apparent in Butler.

In conclusion it seems that the real strength or weakness of the traditional approach to the Battle of Forms will only be known when more research has been done into the attitudes and expectations of the belligerents involved. It is submitted that meanwhile the traditional analysis should be retained. Although that analysis suffers from certain drawbacks, it is suggested that the deficiencies of alternative solutions should preclude those solutions from adoption by the courts.

RICK RAWLINGS

DAMAGES FOR SERIOUS PERSONAL INJURlES

IN Lirn Poh Choo v. Caniden and Islington A.H.A.’ Lord Scarman advocated a radical re-appraisal of the law of damages for personal injuries. although he felt that the social, financial, economic and administrative repercussions of such a reform meant it was a task better suited to the legislature than the courts. Before the House of Lords a challenge was made to almost every element (as well as the total) of the award made to Dr. Lim, the victim of catastrophic brain injuries suffered following a routine operation for which the defendant authority admitted vicarious liability. This meant that, in spite of Lord Scarman’s caution, a number of important points arose for thorough consideration.

27 Article 7 provides: 1. An acceptance containing additions, limitations o r other modifications shall

be a rejection of the offer and shall constitute a counter-offer. 2. However, a reply to an offer which purports to be an acceptance but which

contains additional or different terms which d o not materially alter the terms of the offer shall constitute an acceptance unless the offeror promptly objects to the discrepancy: if he does not so object, the terms of the contract shall be the terms of the offer with the modifications contained in the acceptance.

2s ri979i 1 W.L.R. 401.407. 29 Graveson, Cohn and Graveson, The Uniforttr Laws on International Sales

Act 1967 (1968) a t p. 117. 3O [1979] 1 W.L.R. 401, 406 per Lawton L.J.; at pp. 407-408 per Bridge L.J. 1 [I9791 3 W.L.R. 44.

722 THE MODERN LAW REVIEW I.Vol. 42

Lord Denning M.R., dissenting in the Court of Appeal,’ had advocated that no damages be awarded for loss of future earnings. His Lordship had felt that in cases where the victim is unconscious or insensible an award of damages for loss of earnings would mean over-compensation, though he did feel that in appropriate cases there should be included “an item for pecuniary loss suffered by the dependants. . . .7’3 This view was inconsistent with the (later) decision of the House of Lords in Pickett v. British Rail Engineering Ltd.4 where it was held that damages are recoverable for loss of earnings in the “ lost years ” in cases where there is a reduction in the victim’s expected working life. In such cases too it might be felt that the real loss falls on the dependants, but their Lordships had decided that the victim himself suffered a pecuniary 1 0 ~ s . ~ The condemnation of Lord Denning M.R.3 view was therefore to be anticipated. The existing law does have the merit of making shortfall a virtual impossibility, even though there is clearly room for debate as to whether it provides the most logically sound basis for ensuring proper compensation. Given Lord Denning M.R.’s reform of the law. shortfall would become a real possibility (though, in his Lordship’s view, a remote one). Indeed Lord Denning had sought to obviate this problem by treating the award as an interim one which, in the event that it ran out, could be supplemented on application to the court.‘ The House of Lords rejected his Lordship’s contention that this was pos- sible under Order 29, Part I1 of the Rules of the Supreme Court. This rule merely allows interim payment of damages to be made before final judgment: provisional awards, as advocated by the Master of the Rolls (and the Law Commission l ) , allow for changes after the conclusion of the trial of the action. As the Law Commission recognised, the availability of such machinery depends on legislative changes. Thcre is a clear need for a thorough legislative review of the whole basis of awards to cover future loss and needs in cases like the present. The strength of the arguments put forward by the Master of the Rolls shows this need; the weaknesses of his suggestions demonstrate that the solution must come from Parliament as part of a wide-ranging revision.

The sum awarded for pain, suffering and loss of amenities was challenged on the ground that, in cases where the victim is rendered unconscious or barely sentient, damages under this head should be limited to small conventional sums like those awarded for loss of expectation of life.8 Lord Scarman recognised the different views on

a (19791 Q.B. 196.

4 C19781 3 W.L.R. 955; (1979) 95 L.Q.R. 187; C19791 C.L.J. 47. 5 See, for instance Lord Wilberforce, ibld. at p. 962. 8 Such a system of provisional awards might be an alternative to the system of

index-linked periodic payments advocated by the Pearson Commission (Cmnd. 7504-1, paras. 555-630).

7 Report on Personal Injury Litigation-Assessment of Damages. Law Commission No. 56, paras. 237-244. 8 See Benham v. Gnmblirrg [I9411 A.C. 157.

3 Ibid. pp. 218-219.

Nov. 19791 NOTES 01; CASES 723

the basis of awards for loss of amenities. Without preferring the view that it is the fact (and not the victim’s knowledge) of the deprivation which justifies the award he affirmed the court’s preference for the former. He did this largely on the ground that a change in the law would put future awards out of line with earlier ones. It is difficult to appreciate his Lordship’s refusal to countenance reversal of the decision in West v. Shepherd where the House of Lords, by a majority, had adopted this view. The issue has subsequently divided British and Commonwealth courts.” If the House in this case found convincing the contention that “ a person who is obliged . . . to live with . . . incapacity. fully conscious of the limitations which it imposes upon his enjoyment of life, is entitled to greater compensation than one who . . . is spared, by insensibility, from thc realisation of his loss,” l 1 their Lordships should not have been prevented from amending the law to accommodate it simply because this would have an effect on the level of awards.‘a

Lord Scarman also rejected Dr. Lim’s argument that the figure for non-pecuniary damages should be increased so that it remained abreast of the effects of inflation. He asserted that sums for such loss are “dependent only in the most general way upon the movement in money values.’’13 In Senior v. Barker atid Allen Ltd.I4 Lord Denning M.R. had said, “wages have gone up, money has altered and so the sums which are awarded have gone up,” and the Law Commission also clearly felt that the effect of inflation on money values is regarded when the courts assess damages for non-pecuniary

Such sums should be increased gradually so that they hold their real value: it is no argument that it is enough that they remain substantial (as opposed to nominal) amounts.

Following Pickett, Lord Scarman upheld the award of interest on the damages for non-pecuniary loss as from the date of the service of the writ. It had been made clear in that case that the rationale of such awards of interest is not to make an allowance for the effects of inflation but to compensate victims for loss of the real return they might have obtained from money of which they have been deprived. In times of inflation, however, a real return on capital may be

9 [I9641 A.C. 326. 10 The Court of Session has followed Wesf v. Slteplterd in Dalgleish v. Glmgow

Corporalion [I9761 S.L.T. 157-as has the Ontario Court of Appeal in Jennbtgs v. Cronsberry and R . f n Righf of fhe Province of Onfario (1965) 50 D.L.R.(Zd) 385. Thc High Court of Australia has specifically not followed that case: Skelron v. Collins (1965-66) 115 C.L.R. 94. In England Wesf V. Shepherd, ,itself a majority decision, has naturally been followed, though the Court of Appeal expressed sympathy with the contrary view in Andrew v. Freeborough [I9671 1 Q.B. 1.

11 Per Taylor J. in Skelfon v. Collins, supra, p. 113. l a The Pearson Commission has gone so far as to recommend that in cases

where thc victim is rendered unconscious there should be no damages awarded for non-pecuniary loss : paras. 393-398.

13 [1979] 3 W.L.R. 54. 14 [I9651 1 W.L.R. 429, 432. In Walker v. John McLean and Sons Lid. [I9791

1 W.L.R. 760 the Court of Appeal approved this view. ._ Reports No. 56, para. 275.

724 THE MODERN LAW REVIEW [Vol. 42

virtually unobtainable. This point was not taken. Neither did their Lordships discuss the Pearson Commission’s objection to awarding interest based on the inappropriateness of such calculations in respect of essentially arbitrary sums,l6 nor question why the award of interest should begin to run only from the date of service of the writ.“

The hospital authority also argued that that part of the award made for loss of earnings ovcrlapped with the damages for non- pecuniary loss and the sum awarded to cover future nursing expenses.” Lord Scarman held the latter overlap obviated by deducting from the care figure a sum representing the “domestic element ”: “ A capital sum so assessed . . . will not contain any element of duplication or go beyond compensation into surplus.” While there may be no “ overlap ” there is likely to be compensation at a level above the needs of the plaintiff.20 On the other possible overlap Lord Scarman saw no difficulties on the facts of the present case. Nevcrtheless. his Lordship did allude to the possibility of overlap where the damages for loss of amenities are calculated with reference to a loss of capacity to engage in expensive pleasures and pursuits upon which money from earnings would have been spent. The Law Commission’s view a1 was that there should be no reduction in the damages for loss of amenities which are the same whatever the loss of earnings. It also considered that there should be no reduction of pecuniary loss damages because the victim should have the freedom of choice as to expenditure of earnings which he had had prior to the injury. But surely in the cases where compensation is made to cover loss of expensive pastimes it is assumed that a certain choice is made in order to justify the additional non-pecuniary damages. The Pearson Commission’s observation that damages for pecuniary and non-pecuniary loss “ are assessed on different principles

18 paras. 744-748 echoing the view of the Law Commission, Report No. 56, paras. 273-277.

1 7 This must be seen as an illogical compromise: see Law Commission Working Paper No. 66, paras. 261-263.

1’ Lord Scarman made it clear that awards for future expenses should be assessed on the assumed annuity basis, see p. 57. He also discussed s. 2 (4) of the Law Reform (Personal Injuries) Act 1948. Expenses are recoverable only if reasonable. S. 2 (4) provides that in determining the reasonableness of niedical expenses the possibility of avoiding ell or part of them by taking advantage of the N.H.S. is to be disregarded. The Pearson Commission (paras. 339-342) advocated the repeal of the provision since it gives rise to the possibility of over-compensation, e.g. where a victim obtains N.H,S. treatment after an award has been made on the basis that he is likely to incur private treatment or where the expenses of private treatmcnt nre recoverable from a private Insurance scheme. Lord Scarman recognised tho force of such pohts though in the event he upheld the award, on the basis that such expenses were both probable and, given the subsection, reasonable.

19 [I9791 3 W.L.R. 56. 20 Lord Scarman sought only to avoid an award greater than the amount of

money Dr. Lim would have had but for her injury. In the Court of Appeal Lord Denning M.R. expressed concern lest huge parts of awards like the one in this case prove of no value to the victim given his position after the injury.

2 1 Report No. 56, paras. 193-201.

Nov. 19791 NOTES OF CASES 725

and serve different purposes" is hardly a fully articulated argument to the contrary.

Their Lordships had also to discuss the effect of inflation on the sections of the award covering future care and loss of earnings. Lord Scarman approved the " solution " adoptcd by the House of Lords in Cookson v. KnowlesZ3 that the best course in most cases is to make no specific allowance for inflation, leaving its effects to be countered by sound investment. His Lordship felt that predictions of future economic trends were merely speculative, though most experts would. it is submitted, deem continued inflation substantially probable. Inflation-beating investments are not always easily found and it is, with respect, irrelevant to comment that the approach approved of in this case leaves victims " in the same position as others who have to rely on capital for their support. . . . " 2 4 His Lordship agreed that there might be exceplional cases where an increase in the multiplier was justified but felt that this was not such a case. The lower courts had indicated that an increase should be made in the multiplier to take care of the likely high tax liability-just the sort of circumstances which Lord Fraser in Cookson v. Knowles 26 had thought would make for an exceptional case. It is difficult to see, after Lord Scarman's decision on this point, when such a case would arise."

As Lord Scarman noted, there is clearly a need for legislative action which alone can achieve the necessary fundamental overhaul required of this area of law. But while Parliament's intervention is required finally to allay our " doubts and fears " 28 about the law of damages for personal injuries there is room in the meanwhile for initiative in judicial decisions. Lord Scarman stated the court's role to be to deal intelligibly, reasonably and consistently with contested cases so as to provide a sound basis for settlements. But if reform by the legislature proves not to be swift it would be a pity if the courts were to perpetuate illogicalities and sources of unfairness which are capable of judicial remedy.

P. J. DAVIES

22 Para. 759. 23 [I9781 2 W.L.R. 978; (1979) 42 M.L.R. 98. 24 [1979] 3 W.L.R. 58. This argument was rejected by the Court of Appeal in

Walker v. John McLenn [I9791 1 W.L.R. 765-766. 26 This seemed to be the only method of making explicit allowance for inflation

countenanced in Cookson v. Knowles: but sea Doyle V. Nicholls, The Times, May 20. 1978 (Bristow J.).

2 7 The multiplier selected by the judge was retained even though he had erred on the point. After Pickerr multipliers have to bc fixed by reference to the pre-accident expectation of life which is rnorc generous to the victim. This faotor was balanced against the over-generosity of the judge on the inflation issue.

26 119781 2 W.L.R. 990-991.

28 See [1979] 3 W.L.R. 48.