No Win, No Fee

Television advertisements featuring solicitors offering ‘no win, no fee’ services are extremely hard to miss. On any one day, a viewer is likely to watch several commercials from lawyers enticing customers into supposedly free litigation. These no win, no fee services have become increasingly controversial as a result of their complexity and punitive consequences for losing parties.

This article examines what ‘no win, no fee’ really means in practice and identifies the changing nature of litigation funding in light of recent reforms.

What Happens After Judgment?

A number of matters must be decided once a civil case comes to an end. Clients often remark that they are unconcerned by anything other than the principle of litigation, i.e. which person ‘wins’ or, in legal terms, receives judgment. In actual fact, the additional matters that follow judgment are incredibly significant.

The first of these matters is damages (or in personal injury terminology, quantum). Damages refer to the money that will be paid to the claimant, if successful, that reflect the loss suffered. For example, in a personal injury case a successful claimant will potentially receive money for pain and suffering, loss of earnings, and any disadvantage on the labour market. Of course, if the claimant loses the case, no damages will be awarded.

The second matter to be decided is costs. Costs cover the amount spent by the parties in bringing a case to trial. The largest expense within costs will inevitably be the lawyers’ fees. It is not unusual for costs to exceed damages in certain cases, making the issue of costs highly important in practical terms.

Costs – General Principles

 When the court turns to the issue of costs it will start by applying the general rule. This is that the losing party must pay the winner’s costs in addition to their own costs. The court may depart from the general rule in cases where the winner’s costs were unreasonable or where the winner behaved in a way that would make it unfair for the loser to have to pay. Despite this, the general rule is the starting point in most cases.

Obviously, applying the general rule has the potential to cause serious injustice to the losing party. The consequence of a single judge ruling in the claimant’s favour may mean that the defendant not only has to pay damages and their own costs but the claimant’s costs as well.

As a result of this, alternative funding methods have been developed. In the absence of public funding (which is now highly restricted in civil cases), lawyers have devised various schemes to try and improve the affordability of litigation. The two main mechanisms are explained below.

Conditional Fee Agreements

 Conditional Fee Agreements (CFAs) have been the main form of ‘no win, no fee’ funding structure used in the last ten years. The basic premise of CFAs is that an unsuccessful party will not have to pay anything to his lawyer following defeat in the case.

The consequences of a CFA are highlighted in this table:

Client Wins Client Loses
Client able to recover their lawyer’s base costs from the losing party.

Client able to recover their lawyer’s ‘success fee’ (a percentage of base costs) from the losing party.

Client able to recover costs of ATE premium from losing party.

Client must pay winning party’s base costs, success fee, and ATE premium.

Client does not have to pay their own lawyer’s costs.

In practice, litigants who use a CFA will be covered by After The Event (ATE) insurance, which will cover their costs to the other party in the event that they lose the case.

As a result, the term ‘no win, no fee’ is somewhat misleading. What it really means is ‘no win, no fees to your own lawyer’. The client will of course have to pay the significant fees incurred by the other party’s legal team.

CFAs are a good idea for parties who have an extremely strong case. This is because they will have to pay minimal costs if they are successful at trial. For parties who have weaker cases, however, CFAs can prove to be expensive arrangements.

Perhaps unsurprisingly, CFAs have encountered a lot of criticism in recent years. In one case involving libel it was held that the huge costs facing an unsuccessful defendant under a CFA amounted to a breach of freedom of expression. The 2011 Jackson Review of civil litigation funding proposed abolishing CFAs on the basis of the unfair costs to losing parties. Instead, the review proposed taking a larger share from the winner’s damages.

Damages Based Agreements

Rather than making the losing party pay the entirety of the successful party’s costs, one alternative is to take the money from the successful party’s damages. This is known as a Damages Based Agreement (DBA) and it is the approach that will be taken following the implementation of the Jackson Review proposals in 2013.

The way this works is that the success fee charged by lawyers will now be recoverable as a percentage of damages obtained after trial. Furthermore, successful parties will no longer be able to claim back the costs of the ATE insurance premium from the losing party. In personal injury cases, the success fee will be capped at 25% of the claimant’s damages.

As a result, the responsibility for funding litigation is spread between the parties more evenly than under CFAs. Claimants may find this scheme to be somewhat unfair, however. Damages should reflect money the claimant is entitled to following the injury they have suffered through no fault of their own. To have this money reduced to pay for lawyers they would not have needed but for the defendant’s wrongdoing might seem unjust.

Whatever the merits of the DBA funding structure, it is clear that the new approach will become the norm in future years. Claimants should think whether they could afford to lose up to 25% of their damages as costs before undertaking litigation in this way.

Summary and Key Points

After judgment, the complex issues of damages and costs need to be resolved.

The general rule for costs is that the loser pays both their own costs and the costs of the successful party.

This may cause hardship to the losing party, which has given rise to ‘no win, no fee’ arrangements.

Conditional Fee Agreements ensure that the successful party does not have to pay any costs; the losing party pays all of these but no fees to their own lawyers. Parties will often take out insurance to protect themselves – the premium is recoverable from the losing party after trial.

New Damages Based Agreements replaced CFAs from 2013. This type of structure allows the winning party’s lawyers to claim their success fee from the claimant’s damages rather than the losing party.

Breaking the Shackles – ‘Tesco law’ and the Transformation of Legal Services

There is no better graphic representation of the history of legal services in England and Wales than the barrister’s wig. The fact that in order to be heard in a senior court a person must first place a 16th century horse hair wig on their head demonstrates the historic exclusivity that accompanied legal services provision.

For much of the last few hundred years the rules regarding who can deliver legal advice have been fixed. In the event of a legal problem arising, one would have to consult an appropriately qualified solicitor who would then recruit a specialist barrister should representation be required in court. As a result, other ways of resolving issues were largely unavailable to the average person.

Recent Reforms

This strict and particular model remained unchallenged for centuries. In the last decade, however, steps have been taken to open up the legal services market.

Firstly, the traditional distinction between barristers and solicitors has been eroded with the creation of ‘solicitor-advocates’ able to act in the senior courts. This was complemented by the introduction of changes which have allowed barristers to advise clients directly without the need for a solicitor. These are major reforms which have broken down divisions which have existed for centuries.

Secondly, the introduction of Alternative Dispute Resolution has changed the way in which legal disputes are resolved. In the past, it was only truly possible to resolve issues by going to court with a lawyer. Now the position is much more complex. In many areas, such as family law, it is a requirement for litigants to attempt mediation before they can enter a courtroom. These changes have significantly reduced the need for lawyers to become involved in the process. Other parties, such as mediators, arbitrators, and the voluntary sector have become more important in helping people to resolve disputes.

Most importantly, however, the Legal Services Act, passed in 2007, has broken down the barriers preventing new models of delivering legal services. Following this legislation, it is now possible for legal services to be provided by ‘Alternative Business Structures’. This has enabled new entrants to the market to compete with established solicitors and barristers. Advantages of these reforms include greater choice, specialisation, and clarity. It is now open to a wider number of bodies, such as supermarkets, co-operatives and online companies, to offer and promote legal services to the market.

Birth of Online Document Retailers

One development that has arisen as a result of the changing market is the advent of online legal document retailers such as Netlawman. These are websites that offer standard legal documents to consumers in exchange for a fixed price. Whereas before customers may have had to visit an expensive solicitor to obtain a draft contract or terms and conditions, these are now available at the click of a mouse via the internet.

Online legal document retailers offer significant benefits to service users. The first and most obvious is cost. Customers can now significantly reduce their expenses by making use of new websites. Other bonuses include simplicity, by enabling customers to obtain documents written in plain English, and efficiency, by facilitating quicker and faster business deals. It is now possible to obtain a vast range of legal templates online such as:

  • Contracts for the Sale of Goods
  • Agreements governing share ownership
  • Tenancy agreements
  • Contracts of employment
  • Confidentiality and non-disclosure agreements
  • Pre-nuptial agreements in marriage cases
  • Agreements concerning power of attorney
  • Intellectual property agreements

Some document retailers provide a post-editing review service as well, further bridging the gap between writing your own contract and having a solicitor draw one for you.

Teething Problems

 Critics of the reforms to legal services have claimed that the changes will lead to ‘Tesco law’. It is suggested that opening up the market will create a new sector of unqualified, unreliable players, which will inevitably be to the detriment of consumer welfare.

Much of this criticism comes from existing legal practitioners. Legal practitioners have to train for a number of years and pass several exams and apprenticeship tests in order to become qualified. There is no such guarantee with the authors of online legal documents, for example. Online documents can be written by anyone, anywhere. As a result, there is a degree of risk that accompanies online retailers, which is also found with other new legal service providers, such as supermarkets and co-operatives.

While there may be issues with quality assurance amongst some new entrants, the net effect of greater competition and choice will in all probability be an increase in standards. The threat presented by Alternative Business Structures innovations will force established providers to offer greater value to consumers. Better ‘niche’ area service will result as providers compete to deliver a wider range of specialist products. These consequences can only be to the benefit of the consumer’s needs and requirements.

Unlike the legal professions, online document retailers require no prior consultation before documents can be obtained. There is no delay as a result of excessive administration or compliance issues. A small business owner can now log on to the internet and select a contract if they intend to employ a new member of staff without having to check the process with a solicitor. The advantages for the whole economy in terms of productivity and growth of this efficiency are plain to see. Furthermore, being able to obtain accurate documents online will encourage businesses and individuals to avoid using lawyers wherever they can. One hopeful consequence of this is that economic actors may become more legally self-reliant, sidestepping the trauma and expense of going through the official litigation process with solicitors and barristers.

Conclusion

 Whenever wholesale reform is introduced, there will be those who resist it. This is no different with changes to legal services, which have been unpopular with a section of the established professional market.

It seems, however, that the title ‘Tesco law’ is both misleading and inaccurate. Alternative Business Structures, particularly online legal document retailers, can offer such choice and variety that standards and quality will surely improve in the long-run. Rather than harming consumer welfare, therefore, there is every chance that ‘Tesco law’ and other developments will create substantial gains for the legal services market heading into the future.

Being Your Own Lawyer

In order to qualify as a barrister or solicitor in England and Wales one must sit several tough legal examinations, undergo intensive professional training and then prove one’s self during a long period of apprenticeship. Aspiring lawyers are not permitted to speak in court until they have passed through all of these challenging stages over a period spanning at least five years.

In spite of these exacting requirements, the courts are quite prepared to allow unqualified people to represent themselves in court. Indeed, this is becoming increasingly common as a direct result of government policy. This article looks at the problems facing litigants in person and the steps that could be taken to reduce these problems, benefiting both the litigant and the system as a whole.

The Rise of Unrepresented Litigants

Litigants-in-person are becoming increasingly common in the courts. In 2011, for example, research from the Personal Support Unit, a group set up to help unrepresented litigants, reported a 19% increase on the previous year. These figures are guaranteed to increase in the near future.

The main reason for this is the recent reforms to legal aid funding. Fewer types of cases will be eligible for legal aid support as a result of changes introduced in the Legal Aid (Sentencing and Punishment of Offenders) 2012. For example, people with housing, welfare, and education cases will now all be broadly ineligible for legal aid support. Furthermore, reductions in legal aid fees will make lawyers less willing to take on as many cases as before.

As a result, people will have no choice but to take control of their cases themselves. It is therefore wise for potential litigants in person to be aware of what this means in practice.

What are Litigants in Person Required To Do?

Broadly speaking, litigants in person must assume all of the responsibilities of a lawyer working on their case. In practice, these tend to include:

  • Case Preparation – thinking about which witnesses to call, writing questions, making bundles of evidence etc.
  • Negotiation – discussing offers to settle the case with representatives from the other side.
  • Drafting – parties are required to produce formal documents indicating their positions (known as ‘pleadings’). A litigant-in-person would, for example, have to draft their own statement of case or request for information.
  • Administration – litigants will be responsible for helping to arrange the dates of court hearings and for the disclosure of documents.
  • Advocacy – this is perhaps the most onerous requirement for an unrepresented litigant. The litigant will be required to present all of his or her oral submissions in court.
  • Legal Research – while judges will help litigants to understand the law, research may have to be conducted by the litigant into complex areas such as damages and costs in order to satisfy court requirements.

There are consequently a large number of tasks that a litigant-in-person must undertake if they are to represent themselves in court. These skills take years to learn and develop for professional lawyers and it is possible to infer from that just how difficult they must seem to a lay person. It is perhaps unsurprising, therefore, that litigants-in-person tend to create a series of problems in the courts system.

What Are the Challenges Presented by Litigants in Person?

 One reason the recent legal aid reforms were so fiercely opposed by the legal profession is because of the likely rise in unrepresented litigants. The legal community was already aware of the problems that litigants-in-person could create in court and feared the negative impact of any increase.

The most obvious problem presented by unrepresented litigants is the risk of injustice following a person’s failure to put forward their case properly. A lay person may lack the skills to convincingly make submissions on the strength of their evidence or to ask the right questions of key witnesses. This can seriously affect chances of winning in court and may sometimes lead to the wrong outcome.

In addition, litigants-in-person inevitably create delay within the system. Complex matters, such as disclosure, must be explained to an unrepresented litigant in detail that would not be required if they had the services of a lawyer. Extra time must be afforded to ensure compliance with directions. More time is needed in order to narrow the issues in a case. All of this delay leads to greater expense and reduces the efficiency of the justice system as a whole.

What Can Be Done About A Nuisance

The word ‘nuisance’ carries with it almost Victorian connotations. It creates images of young street children being reprimanded by officers of the law. Indeed, it is the type of word that people would think had long vanished from English common law.

Despite its anachronistic appearance, nuisance is a useful tool that allows people to sue for things that may seriously affect their standard of living. As such, it is worth exploring the limits of nuisance and how claims can be brought.

What Is Nuisance?

Nuisance refers to situations where someone unreasonably interferes with another’s enjoyment of land. Examples of nuisance could be loud music being played from a neighbouring property, damage to a garden caused by a neighbour’s dog, or bad smells from nearby factories drifting over to residential areas.

As a result, it is a tort based on property. This is significant because noise pollution and other unwanted emissions can hugely disrupt a person’s health and happiness. It is therefore important that people are able to look to the law if they are faced with a nuisance.

How Is Nuisance Different From Negligence?

 Although claimants are able to sue for nuisance and negligence separately, there is very little difference between the two. Nuisance and negligence both allow people who have suffered problems caused by other people to seek justice through the courts. In many cases, if a person has a valid claim for nuisance they will also be able to sue for negligence.

The main point of difference is probably that negligence places more emphasis on damage and tangible loss. With nuisance cases, the central damage may be less quantifiable – lost sleep, unpleasant smells etc. It is therefore advisable for people to pursue nuisance in these cases as well as negligence.

Who Can Sue For Nuisance?

 Another important difference between nuisance and negligence is that nuisance is only available to those who have a proprietary interest in the land that they are occupying. A ‘proprietary interest’ means essentially that the claimant owns or rents the property. Visitors or those who occupy property under a license are thus prevented from suing.

This is a significant prohibition as it excludes large numbers of potential claimants. Those who do not have a proprietary interest in the land they occupy are therefore only able to rely on negligence, which simply requires there to have been a duty of care on the defendant.

What Must Be Proven?

 The main issue that claimants must prove in nuisance claims is that the defendant’s use of land was unreasonable. There can be no valid claim, for example, against a person who creates small levels of noise in connection with running a business in daytime hours. Most people would regard this as a reasonable use of land.

Rather, nuisance only exists to prevent unreasonable interference. In deciding whether a particular use of land is unreasonable a court will consider:

  • Locality – obviously more noise is to be expected in an urban industrial area than in a quiet corner of the countryside. The courts will therefore be more likely to rule in favour of claimants in the latter rather than the former.
  • Sensitivity of the claimant – the court will judge whether interference with land has been unreasonable according to the standards of the ‘ordinary, reasonable claimant’. A claimant who has a particularly acute sense of hearing, for example, will be less likely to show that noise coming from neighbouring properties is excessive.
  • Public benefits – if the public derives a benefit from the defendant’s use of land, e.g. through the increased housing produced through construction, a court will be more likely to conclude that it was reasonable.
  • Malice – if it is demonstrated that the defendant is creating the disturbance in order to annoy the claimant rather than for any legitimate purpose, the courts will come down strongly in favour of the interference being unreasonable.

The locality point is particularly important where the claimant has recently moved to the area. If a claimant has knowledge of the local area and moves to a place where nuisances are likely he is said to have ‘moved to the nuisance’ and will be unable to prove that the defendant’s use of land was unreasonable.

How Long Must The Nuisance Continue For?

 There is no set period of time a nuisance must continue for in order to allow a person to sue but it is nonetheless clear that the interference with land must take place on at least one occasion. As a result, the nuisance must be continuous even if it does not continue for very long.

Clearly, the longer the nuisance goes on for the more likely it is that a court would consider it to be unreasonable.

Who Can Be Sued?

 Generally, the claimant should sue the creator of the nuisance. In many cases, the creator of the nuisance will be the owner of the land from which the nuisance originates. In other cases, however, especially in the industrial context, the creator of the nuisance will be occupying the land in another capacity, usually as a licensed contractor.

In addition, landlords can be sued for nuisance even if they do not create the nuisance themselves. This is only really possible, however, if it can be proven that the landlord was aware of the nuisance and consented to it continuing over time. One good example of this is if the landlord authorised repairs to their property, which led to noises and fumes being received by neighbouring houses.

Summary and Key Points

  •  The tort of nuisance allows people to sue for unreasonable interference with their enjoyment of land.
  • Nuisance is a property-based tort and is only available to those with a proprietary interest in land.
  • In considering nuisance cases, the court must decide whether the defendant’s use of land was reasonable. The court will take into account the locality, the sensitivity of the claimant, whether any public benefits arose from the defendant’s activities, and whether any malice was involved.
  • Claimants may sue the creator of the nuisance, whether that is a land owner, tenant, or licensee, or, in limited circumstances, the landlord directly.

What Can Be Claimed For Breach Of Contract

When one party breaches a contract the consequences can be severe. If an agreement involving large sums of money has been unlawfully brought to an end by one of the parties, the other party can turn to the law to recover the full range of their losses.

This article examines what happens when a party takes this course of action, in particular the circumstances under which the ‘innocent’ party can terminate the contract following a breach, the damages that can be claimed and how financial issues are resolved.

When is a Contract Breached?

 Using literal terms, a contract is breached whenever one party departs, however slightly, from the exact wording of the contract. For example, if a contract for the sale of goods provides for delivery to take place no later than 5.15 and the delivery is made at 5.16 there will be a breach of the contract.

Despite this technical interpretation, the parties will only look to the law of contract when a more serious failure takes place. In a contract there are two types of terms: conditions and warranties. A condition is a term of such importance that it will entitle the ‘innocent’ party to claim the contract has finished if the condition is breached. A warranty, by contrast, only entitles the innocent party to claim damages if it is breached.

While trivial infringements such as the example above will always entitle the innocent party to sue for damages (which will be nominal in this scenario), only important violations (known as ‘repudiatory breaches’) will allow the innocent party to terminate the agreement or claim significant damages.

When Can A Contract Be Terminated?

 As explained above, if a condition of the contract is broken, the innocent party has the option of terminating the remainder of the agreement. For example, if a contract states that A must supply B with five instalments of bananas and instalment two actually contains apples, B will have a choice as to whether to continue with the contract or hold it as terminated.

If B decides to continue with the contract, A will have the opportunity of supplying an additional instalment of bananas in order to compensate for the defective second instalment. B will then be able to claim any consequential losses from the second instalment in the future. By contrast, if B decides to terminate the agreement, A will not have to supply any more bananas and B will simply bring a claim for damages suffered in the past.

It is worth repeating that only breaches of conditions will put the innocent party in a position where this choice can be made. Trivial breaches will only create an action for damages. Whether or not a term is a condition will depend either on the law – certain terms, e.g. the requirement for goods to be of satisfactory quality, are implied into every contract and automatically allow the innocent party to terminate if breached – or the circumstances of the contract. In a contract where time is critically important, for example, it is much more likely for late delivery to be considered a breach of condition.

How Are Damages Calculated?

 When a claim is brought for breach of contract, the remedy the innocent party is seeking is usually monetary compensation, known in the law as ‘damages’. Damages are intended to compensate for the claimant’s losses: the money he would have gained if the contract was performed according to the terms.

The losses that can be claimed, however, cannot be too remote from the consequences that the parties thought might happen when the contract was formed. In other words, the losses must have been ‘in the reasonable contemplation of the parties’ in order to be recoverable.

In addition, the claimant is expected to ‘mitigate his losses’. This means that after the contract is breached, the claimant must take steps to avoid suffering more loss than is necessary. It is not possible, for obvious reasons, for a claimant to stand idly by and endure further damages so he can claim more money from the defendant later on. Examples of mitigating losses include taking out insurance or attempting to sell products rendered defective as a result of the breach.

The main question in calculating damages is whether the ‘expectation’ or ‘reliance’ basis is used. The expectation loss method aims to put the claimant in the position he would have been in had the contract been performed. There are two ways of assessing damages under the expectation loss method:

  • Cost of Cure – where the defendant was supposed to have carried out a certain act, e.g. delivering goods, the cost of cure will be the difference between the market price and the contract price of the goods. This is the measure that is used in most cases.
  • Diminution in Value – where there is a contract for services relating to property, and the value of the property diminishes as a result of the breach, the claimant can recover the lost value.

Whether the cost of cure or diminution in value methods are adopted will largely depend on common sense and the nature of the breach in each case. The reliance measure, by contrast, is less common and simply seeks to compensate the claimant for money spent on the performance of a contract.

Can Damages Be Claimed For Emotional Loss?

 The short answer to this question is not really. The general rule is that damages can only be claimed for the financial losses the claimant has suffered; any emotional or incalculable losses cannot be recovered.

Exceptions to this rule have, however, been developed in recent years. It is now possible to claim damages arising from loss of enjoyment when a key aspect of the contract was happiness. The main example of such an agreement is in the context of holidays or travel arrangements.

The uncertainty inherent in seeking financial compensation for emotional disappointment is reflected in the fact that any damages awarded in this category should always be modest and restrained. The maximum sum of money that can possibly be claimed is £10,000.

Damages for Misrepresentation

 A party can bring a claim for misrepresentation if they are induced to enter into a contract on the basis of false information. The representation must have been a clear statement of fact and reliance on this statement must have been reasonable at the time. False information can be supplied innocently, negligently or fraudulently.

In common with breach of contract cases, claimants for misrepresentation can seek to rescind the contract. Rescission will place both parties in exactly the same position they were in before the contract had been created. This is only possible, however, if the subject-matter of the contract still exists.

Damages for misrepresentation are assessed on the same basis whether the information was provided negligently or fraudulently. Claimants can be entitled to the full range of consequential losses they have suffered as a result of the false statement. As a result if one party lost the ability to perform another contract as a result of defective machinery following misrepresentation, they may be able to sue for the value of the lost contract.

Summary and Key Points

  • When a contract is breached the innocent party may be able to terminate the contract and/or claim damages.
  • Termination is available if the guilty party has breached a condition of the contract. The effect of this is to free both parties from future obligations. The innocent party may still claim damages.
  • When awarding damages, the court will aim to put the parties in the position they would have been in but for the breach of contract.
  • Damages will usually be assessed on the basis of what was reasonably foreseeable and necessary in order to compensate for the cost of cure or diminution in value.
  • Damages cannot ordinarily be claimed for loss of happiness. The exception to this is in leisure or holiday contracts.

In addition, further damages can be claimed for misrepresentation.

What Can Be Claimed In Tort Law

Claimants who successfully negotiate all of the various hurdles in suing on tort law grounds such as negligence or nuisance will then be entitled to seek remedies at the end of the case. The main remedies that are available to claimants in tort law are damages and injunctions.

This article explores the principles behind tort law damages and introduces the notion of seeking injunctions against others.

How Are Damages Calculated?

Where a contract is breached the ‘innocent’ party will be entitled to be put in the position they would have been in had the contract been carried out. As a result, damages in contract law seek to compensate the claimant for disappointed expectations.

In tort law, the award of damages looks to the past rather than the future. Claimants for negligence, for example, will be put in the position they would have been in had the negligent act not occurred. The courts therefore compensate claimants for things they did not expect to happen.

A key principle of both contractual and tortious damages, however, is that the defendant’s acts must have caused the claimant’s losses. In particular, the losses suffered by a claimant must have been reasonably foreseeable to the defendant. This means that a claimant cannot sue for losses that had no conceivable link to the negligent act, e.g. loss of employment following a simple road traffic accident causing whiplash.

In tort cases damages are typically assessed at the date of the act in question. That said, there may be circumstances, usually when the claimant’s condition deteriorates between the act and the trial, when the courts take a different view and assess damages after liability has been established.

What Factors Will The Court Take Into Account?

 There are several principles the court will bear in mind when deciding on the measure of damages in tort cases.

Firstly, if a claimant has suffered property damage, the courts must choose whether or not to compensate the claimant for the cost of repairing the property or the diminution in value before and after the incident. In cases where the property is used, e.g. machinery, the courts will usually compensate for the cost of repair/replacement, whereas in cases where the property is held as an investment, e.g. with art work or classic cars, the courts will tend to award the difference in value.

Secondly, the courts must consider whether any reduction should be made for contributory negligence. This applies where the claimant has contributed to his losses through his own negligence. For example, if a person makes the choice to get into a car with a drunk driver, who then crashes the car and causes personal injury to the passenger, the passenger will be able to sue the driver but his damages may be reduced on account of his clearly negligent decision to get into the car.

Thirdly, as in contract law, claimants are under a duty to mitigate their losses. It is not sufficient for a claimant to artificially suffer more damage in order to claim an increased amount in court. Therefore, they must do what they can to improve their position, e.g. in personal injury cases by seeking prompt medical treatment.

How Are Damages Awarded For Personal Injuries?

 There are huge, voluminous ring binders devoted to the single subject of damages in personal injury cases. It is a highly complex and detailed area of the law. In this part of the article, the basic principles of damages (known as ‘quantum’) will be considered. Those seeking more information should consult specialist textbooks.

Essentially there are two types of damages in personal injury cases:

  • Special damages – these cover actual monetary losses the claimant has suffered from the accident – medical bills, travel expenses to and from hospital, loss of earnings, nursing costs etc.
  • General damages – this category is intended to compensate for the intangible losses of a claimant’s ‘pain, suffering and loss of amenity’. There are precedents for past awards (adjusted for inflation) and formulas that must be followed in this area. General damages also compensate for any disadvantage on the labour market as a consequence of the injury.

It should be noted that claimants are free to seek medical treatment at private institutions rather than the National Health Service; the defendant is required to pay the costs in any event.

Injunctions

 Sometimes, however, damages will simply be an inadequate remedy. If a claimant is desperately requiring something to stop happening, a financial award will not be enough to achieve justice. Where this is the situation, it is open to claimants to seek an injunction.

Injunctions are essentially legal bans on taking a course of action. A prohibitory injunction prevents the defendant from doing something they were doing before the injunction was imposed. Another type of injunctions is mandatory injunctions, where the defendant is ordered by the court to do something they were not doing before the injunction was taken out.