The Law Commission (LAW COM No 262) DAMAGES FOR PERSONAL INJURY: MEDICAL, NURSING AND OTHER EXPENSES; COLLATERAL BENEFITS Item 1 of the Seventh Programme of Law Reform: Damages November 1999 The Law Commission was set up by the Law Commissions Act 1965 for the purpose of promoting the reform of the law. The Law Commissioners are: The Honourable Mr Justice Carnwath CVO, Chairman Miss Diana Faber Mr Charles Harpum Mr Stephen Silber, QC The Secretary of the Law Commission is Mr Michael Sayers and its offices are at Conquest House, 37-38 John Street, Theobalds Road, London WC1N 2BQ. When the terms of this report were agreed on 8 September 1999, Professor Andrew Burrows was also a Commissioner. The text of this report is available on the Internet at: http://www.open.gov.uk/lawcomm/ ii GENERAL INTRODUCTION This report draws together our conclusions on the subject-matter of two consultation papers concerned with damages for personal injury. The first was Damages for Personal Injury: Medical, Nursing and Other Expenses.1 The second was Damages for Personal Injury: Collateral Benefits.2 Together with our report on Claims for Wrongful Death,3 they conclude the Law Commission’s Programme of Work on Damages. The decision to publish a single report covering both expenses and collateral benefits has been taken for two main reasons.4 First, the subject-matter of the two consultation papers is closely linked. For example, on one approach (which in the event we reject: see paragraph 9.5 below) the gratuitous provision of services by a third party should be treated in the same way as the provision of (other) collateral benefits. Secondly, we have ultimately made only one set of linked recommendations for legislation (dealing with the House of Lords’ decision and reasoning in Hunt v Severs5) arising out of these two consultation papers. With only one relatively limited Bill being in mind, it has been possible to deal with some issues in less detail than would have been necessary if wide-ranging legislation were being recommended. The lay-out of this report flows from the fact that two separate consultation papers were issued. It is divided into two sections. The first (Section A) deals with medical, nursing and other expenses and comprises Parts I-VIII. The second (Section B) deals with collateral benefits and comprises Parts IX-XIII.6 The draft Bill dealing with Hunt v Severs is to be found in Appendix A. Appendix B lists consultees who responded to the two consultation papers. We have been helped by a large number of people in our work on this report. In particular, Harvey McGregor QC has given us the benefit of his unrivalled expertise on many issues and, having been leading Counsel in a number of the important cases, has given us insights that we would not otherwise have gleaned. 1 (1996) Consultation Paper No 144. 2 (1997) Consultation Paper No 147. 3 (1999) Law Com No 263. 4 An incidental advantage of our recommendations in these two areas being merged in a single report is that readers, interested in the general approach to legislation of the Law Commission, have the opportunity of seeing a wide range of reasons why the Law Commission may not favour legislation. In the area of damages, the interplay between common law development by the courts and legislation is an intriguing and difficult one. It will be seen that we have adopted a minimalist approach to legislation in this area, as in several others relating to reform of the common law. See A Burrows, Understanding the Law of Obligations (1998) p 166. 5 [1994] 2 AC 350. 6 As we are concerned that the point might otherwise be lost, we refer readers (especially Government officials) now to para 9.10 below: we there draw attention to the contention that wide-ranging deduction of collateral benefits is an acceptable way (which does not unduly prejudice claimants) of cutting the costs of the tort system. iii [This page is intentionally blank] iv THE LAW COMMISSION DAMAGES FOR PERSONAL INJURY: MEDICAL, NURSING AND OTHER EXPENSES; COLLATERAL BENEFITS CONTENTS Paragraphs Page SECTION A: DAMAGES FOR PERSONAL 1.1-8.24 1 INJURY: MEDICAL, NURSING AND OTHER EXPENSES PART I: INTRODUCTION TO MEDICAL, NURSING 1.1-1.18 1 AND OTHER EXPENSES PART II: THE PRESENT LAW ON MEDICAL, 2.1-2.69 7 NURSING AND OTHER EXPENSES 1. MEDICAL NURSING AND OTHER EXPENSES 2.1-2.36 7 (1) The general position 2.1-2.2 7 (2) Section 2(4) of the Law Reform (Personal Injuries) Act 1948 2.3-2.7 7 (3) Recoupment of costs by the National Health Service 2.8-2.14 9 (4) Care provided free of charge to the claimant by relatives or 2.15-2.33 11 other private parties (a) The general position 2.15-2.25 11 (b) Care provided by the defendant 2.26-2.30 15 (c) The quantum of damages 2.31-2.33 16 (5) Loss of the claimant’s ability to do work in the home 2.34-2.35 17 (6) Hospital visits 2.36 18 2. ACCOMMODATION COSTS 2.37-2.46 18 (1) Introduction 2.37 18 (2) Purchase of new property 2.38-2.44 18 (3) Adaption of property 2.45-2.46 21 3. THE MANAGEMENT OF THE CLAIMANT’S AFFAIRS 2.47-2.54 22 (1) Court of Protection 2.47-2.52 22 (2) Financial advice 2.53-2.54 24 4. LOSSES ARISING OUT OF THE CLAIMANT’S DIVORCE 2.55-2.62 25 5. INTEREST ON DAMAGES FOR PECUNIARY LOSS 2.63-2.69 27 v PART III: REFORM I: MEDICAL EXPENSES 3.1-3.100 30 1. SECTION 2(4) OF THE LAW REFORM (PERSONAL 3.1-3.18 30 INJURIES) ACT 1948 (1) Generally 3.1-3.4 30 (2) Claimants using NHS facilities having obtained damages for 3.5-3.10 31 private expenses (3) The duty to mitigate 3.11-3.13 32 (4) Suggestions for reform 3.14-3.18 34 2. RECOUPMENT OF COSTS BY THE NATIONAL HEALTH 3.19-3.43 35 SERVICE (1) The argument from legal principle 3.22-3.25 36 (2) Policy and practical objections to recoupment 3.26-3.32 37 (3) The form of a recoupment claim 3.33-3.37 39 (4) Administrative arrangements 3.38-3.40 40 (5) Concluding remarks on NHS recoupment 3.41-3.43 41 3. CARE PROVIDED FREE OF CHARGE BY RELATIVES OR 3.44-3.86 42 OTHER PRIVATE PARTIES (1) The general position 3.44-3.66 42 (a) A direct right for carers? 3.51-3.53 44 (b) Compensating the carer through the claimant’s claim 3.54-3.66 45 (2) Care provided by the defendant 3.67-3.76 50 (3) The quantum of damages 3.77-3.86 53 4. LOSS OF THE CLAIMANT’S ABILITY TO DO WORK IN 3.87-3.93 56 THE HOME 5. HOSPITAL VISITS 3.94-3.100 58 (1) Generally 3.94-3.98 58 (2) Visits by the defendant 3.99-3.100 59 PART IV: REFORM II: ACCOMMODATION 4.1-4.33 61 EXPENSES 1. INTRODUCTION 4.1 61 2. PURCHASING ACCOMMODATION 4.2-4.23 61 (1) The general approach 4.2-4.17 61 (2) Where the property has been paid for by a third party 4.18-4.21 66 (3) Miscellaneous associated costs 4.22-4.23 68 3. ALTERATIONS TO PROPERTY 4.24-4.33 68 (1) Alterations increasing value 4.25-4.29 68 (2) Alterations not increasing value 4.30-4.33 69 vi PART V: REFORM III: THE MANAGEMENT OF 5.1-5.15 71 THE CLAIMANT’S AFFAIRS 1. THE COURT OF PROTECTION 5.1-5.10 71 (1) Generally 5.1-5.3 71 (2) Contributory negligence 5.4-5.10 72 2. FINANCIAL ADVICE 5.11-5.15 74 PART VI: REFORM IV: LOSSES ARISING OUT OF 6.1-6.34 76 DIVORCE 1. INTRODUCTION 6.1-6.2 76 2. REDISTRIBUTION OR LOSS? 6.3-6.10 76 3. INFINITE REGRESS 6.11-6.12 79 4. PROCEDURAL ISSUES 6.13-6.14 80 5. CAUSATION AND REMOTENESS 6.15-6.16 80 6. FAMILY LAW ACT 1996 6.17-6.22 81 7. OTHER RELATIONSHIPS 6.23-6.25 82 8. LOSS CONSEQUENT ON A FUTURE DIVORCE 6.26 83 9. LOSS SUFFERED BY THE UNINJURED SPOUSE 6.27-6.29 83 10. NON-PECUNIARY LOSS 6.30-6.33 84 11. CONCLUSION 6.34 85 PART VII: REFORM V: INTEREST ON DAMAGES 7.1-7.16 86 FOR PECUNIARY LOSS 1. GENERALLY 7.1-7.4 86 2. HALF-RATE INTEREST 7.5-7.16 86 PART VIII: SUMMARY OF RECOMMENDATIONS 8.1-8.24 91 ON MEDICAL, NURSING AND OTHER EXPENSES 1. MEDICAL AND NURSING EXPENSES 8.1-8.12 91 (1) Section 2(4) of the Law Reform (Personal Injuries) Act 1948 8.1 91 (2) Recoupment of costs by the NHS 8.2 91 (3) Care provided free of charge to the claimant by relations or 8.3-8.8 91 other private parties (4) Loss of the claimant’s ability to do work in the home 8.9-8.10 92 (5) Hospital visits 8.11-8.12 93 2. ACCOMMODATION EXPENSES 8.13-8.18 93 (1) Purchasing accommodation 8.13-8.16 93 (2) Alterations to property 8.17-8.18 94 vii 3.