RECOVERY OF LOST CONTRACTUAL BENEFITS
In Brazier v Wolverhampton City Council [2007] All ER (D) 226 (Dec) the Court of Appeal was asked to consider the thorny issues raised by a claim for lost contractual benefits—such as sick pay, already paid out as a result of the first tort—against a first tort feasor in the event of the claimant suffering a second, and separate, tortuous act.
The claimant was employed by Wolverhampton City Council as a care assistant. On 28 January 2003 the claimant sustained an aggravation of a pre-existing condition in her lumbar spine when she was handling a resident. The medical evidence showed that the claimant suffered a four-and-a-half year acceleration in her symptoms. After the incident the claimant was off work and was in receipt of sick pay for three months. After those three months, sedentary employment as a seamstress was provided for her by the defendant at a similar wage. This job was temporary and on 27 October 2004 she was given three months’ notice of termination of that employment.
During her notice period, the claimant was involved in a road traffic accident (RTA) on 22 November 2004 which rendered her unfit for work of any kind. The claimant’s separate claim in respect of the RTA against the defendant in that action, British Lead Mills Ltd, was still in progress at the date of the hearing.
Acceleration period
Sitting in Birmingham County Court, Judge McKenna decided that that but for the defendant’s tort, Mrs Brazier would have continued to work as a carer for another four and a half years, the period of acceleration caused by the first accident. However, although the first accident had rendered her incapable of working as a carer and led to her retirement, the claimant ought to have been able to find alternative work at no lesser wage by the end of February 2005. It was therefore the second accident which caused the material financial loss of earnings capacity. Although the claimant gave credit in her schedule of damages for the sums paid by the council following the accident at work, the claimant alleged that the defendant was nonetheless liable for an equivalent sum to compensate the claimant for her loss of benefits due under the contract. The claim was put as follows:
“If the accident had not occurred, then the claimant would have received sick pay and pay from the temporary sedentary post in any event but at a date approximately 4½ years later ie by 28 July 2007. Since credit has been given for the sick pay/wages from the sedentary post received immediately following the accident this later non receipt of sick pay/wages from the sedentary post is a loss stemming directly from the accident.”
In allowing the claim, the judge purported to apply the House of Lords’ decision in Baker v [1970] AC 467, [1969] 3 All ER 1528. Baker held that, where damage is concurrently caused by more than one tort, each tortfeasor is liable for the full consequences of his tort, regardless of the extent of its overlap with the consequences of the other(s). Therefore, Judge McKenna reasoned, the effects of the RTA had to be ignored. But for the first accident, the claimant would still have received contractual sick pay and earnings at the end of the four-and-a-half year acceleration period, for which she needed to be compensated. The judge accordingly awarded Mrs Brazier the sum of £19,452 for the “loss of future sick pay and earnings as a seamstress”. On appeal, it was conceded that the judge’s decision had been wrong as, on the judge’s own findings of fact, if the RTA was to be ignored then the claimant would have still been able to earn sums, at least equivalent to those she had received as a care assistant, at the end of the acceleration period as a seamstress.
The claimant maintained, however, that she should still be compensated for the loss of the year’s contractual sick pay entitlement that would have been available to her but for the accident at work as at the date of the RTA. The RTA, it was argued, had nothing to do with that loss of entitlement, since the loss was suffered before the second accident took place.
The Court of Appeal (Lord Justices Tuckey, Lawrence Collins and Rimer) rejected that submission, refusing to recognise a claim for “loss of contractual benefit” in these circumstances. A claim for damages was about money, and the critical question was, “what money has the claimant lost?”
During the period following the RTA, the claimant was not losing any money by reason of the first accident, as she would, but for the second accident, have earned no less than she had in her job as a care assistant. Rather, any loss during that period had to be attributed to the RTA, and the claimant had to look to the defendant in her claim for the RTA to compensate her for that loss.
Comment
This is a helpful clarification of the law. The argument that a claimant should recover for loss of sick pay at the end of an acceleration period is a relatively common one and therefore the legal effect of subsequent events, which may further injure vulnerable claimants and prevent them mitigating their loss, is important. The 6th edition of the Ogden Tables, if applied here, could have given rise to an argument that the defendant was liable to a continuing loss of earnings claim. As the claimant was disabled following the first tort an increased reduction for contingencies would have been applied to her earnings as a seamstress. This may well mean that a subsequent tort which removes a residual ability to earn equivalent sums no longer operates to wipe out a claimant’s claim for damages, as here.
Only very limited guidance is presently available on the application of the 6th edition, with Connor v Bradman [2007] EWHC 2789, [2007] All ER (D) 495 (Nov) the only reported authority at the time of writing to consider the new method of discounting claims for loss of earnings for contingencies other than mortality. It is to be hoped that the Court of Appeal has an opportunity to look at this issue soon.
