HOUSE OF LORDS SESSION 2006–07
[2007] UKHL 10
on appeal from: [2004] EWCA Civ 1035
OPINIONS
OF THE LORDS OF APPEAL
FOR JUDGMENT IN THE CAUSE
O’Brien and others (FC) (Appellants)
v.
Independent Assessor (Respondent)
Appellate Committee
Lord Bingham of Cornhill
Lord Scott of Foscote
Lord Rodger of Earlsferry
Lord Carswell
Lord Brown of Eaton-under-Heywood
Counsel
Appellants:
Philip Engelman
(Instructed by Hodge Jones & Allen)
Respondents:
Ian Burnett QC
Robin Tam QC
(Instructed by Treasury Solicitor)
Hearing dates:
29 and 30 January 2007
ON
WEDNESDAY 14 MARCH 2007
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HOUSE OF LORDS
OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT
IN THE CAUSE
O’Brien and others (FC) (Appellants) v. Independent Assessor
(Respondent)
[2007] UKHL 10
LORD BINGHAM OF CORNHILL
My Lords,
1. This appeal by Mr Vincent Hickey and Mr Michael Hickey raises
two questions of law relating to the assessment of compensation payable
to them by the Secretary of State for the Home Department under
section 133 of the Criminal Justice Act 1988 as amended. This section
provides for payment of compensation to those who (like the appellants)
have suffered punishment following a conviction which involved a
miscarriage of justice. When, as here, the Secretary of State has
determined that victims have a right to compensation under the section,
an independent assessor (in the appellants’ case, Lord Brennan QC)
assesses the amount of the compensation payable, which must cover
heads of loss not susceptible to precise arithmetical calculation (loss of
liberty, loss of family and social life, injury to reputation, emotional
suffering and anguish, mental illness caused by the experience of
imprisonment and such like) and also heads of loss susceptible to such
calculation (loss of past and future earnings, loss of pension rights,
relatives’ visiting expenses, expenses incurred in securing release, legal
expenses and so on). The former heads are conveniently referred to as
non-pecuniary loss, roughly equivalent to general damages recoverable
on proof of an actionable civil wrong, the latter as pecuniary loss,
roughly equivalent to special damages.
2. In calculating the pecuniary loss suffered by each of the
appellants, the assessor considered what sums the appellants would have
earned if they had been at liberty but which they had been unable to earn
because they were in prison. No issue arises on that calculation. But the
assessor further considered that to award the appellants the whole of that
sum would over-compensate them because, had they been at liberty,
they would inevitably have incurred personal living expenses to provide
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the necessities of life which, because they were in prison (although
wrongly and of course involuntarily), they had not incurred. So he
deducted 25% from the appellants’ lost earnings as calculated to achieve
the figure of what, in his judgment, the appellants had actually lost, the
balance which would have been left to them after feeding, clothing and
accommodating themselves if in fact they had earned the sums which it
was calculated they would have earned if at liberty. No issue arises on
the percentage which the assessor used, but the appellants challenge the
principle of making any deduction at all. The Queen’s Bench
Administrative Court (Maurice Kay J) found in their favour on this issue
but the Court of Appeal (Auld and Longmore LJJ and Gage J) upheld
the assessor’s decision [2003] EWHC 855 (Admin); [2004] EWCA Civ
1035. The appellants contend that no deduction should have been made.
This contention raises the first issue for decision by the House.
3. The second question pertains to the assessor’s calculation of the
appellants’ non-pecuniary loss (other than that relating to psychiatric
illness). In making percentage deductions to take account of the
appellants’ other convictions and any punishment resulting from them,
the assessor applied percentages (25% in the case of Vincent Hickey,
20% in the case of Michael). This was a departure from the percentage
(10%) previously applied by a different assessor (the late Sir David
Calcutt QC) in assessing the compensation payable to Mr James
Robinson, an alleged participant in the same crime and a victim of the
same miscarriage of justice as the appellants but a man with a much
worse criminal record. Counsel for the appellants does not criticise the
making of a percentage deduction to take account of the appellants’
other convictions and punishment resulting from them, nor does he
contend that Lord Brennan was obliged to follow the precedent set by
his predecessor by deducting the same or a similar percentage. His
argument, founded on the principle that like cases ought ordinarily to be
treated alike in the absence of good reasons for differentiation, is that if
the assessor chose to depart significantly from the percentage applied by
his predecessor, he should have given reasons to show that there was
justification for doing so. This, it is said, he did not. The Divisional
Court and the Court of Appeal did not accept the appellants’ consistency
argument, then somewhat differently put. Its correctness raises the
second issue now before the House.
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The facts
4. On 9 November 1979 the appellants and Mr Robinson, a codefendant,
were convicted at Stafford Crown Court of murdering Carl
Bridgewater, a 13 year old newspaper-boy, during a burglary at Yew
Tree Farm in the West Midlands.
5. Vincent Hickey was born in 1954 and was aged 25 on conviction.
He had been convicted of some 17 offences, mostly minor, between
1970 and 1978. He had served one short custodial sentence as a juvenile
and had been sentenced to 12 months’ imprisonment suspended for
2 years. Michael (his cousin) was younger, born in 1961 and aged just
under 18 on conviction. He had committed 15 offences, mostly minor,
between 1976 and 1978. He had not served a custodial sentence. James
Robinson was older than either of the appellants, aged 45 on conviction,
and had a much worse criminal record than they did.
6. For the murder of Carl Bridgewater, Vincent Hickey was
sentenced to life imprisonment. He was also sentenced to concurrent
terms of 10 years’ for aggravated burglary at Yew Tree Farm and
12 months’ for an offence of deception. Michael, because of his age,
was sentenced to detention during Her Majesty’s Pleasure for the
murder and 8 years’ detention for the aggravated burglary at Yew Tree
Farm. He was also sentenced to 12 years’ detention concurrently for
each of two armed robberies, at Chapel Hill Farm and a Tesco
supermarket, to which he had earlier pleaded guilty. James Robinson
was sentenced to life imprisonment and 10 years’ imprisonment for the
murder and aggravated burglary at Yew Tree Farm. He was also
sentenced to 15 years’ imprisonment concurrently for each of the Chapel
Hill Farm and Tesco armed robberies, and a short suspended sentence
was activated. The Chapel Hill Farm armed robbery was also charged
against Vincent Hickey. He was never tried for or convicted of that
crime, but it was later accepted that he had been complicit in it.
7. The appellants and Mr Robinson tried to challenge their
convictions of the Yew Tree Farm offences, of which they always
claimed to be innocent, but leave to appeal was refused in December
1981 and, on reference of their cases to the Court of Appeal by the
Secretary of State under section 17(1)(a) of the Criminal Appeal Act
1968, their appeals were dismissed in March 1989. Following a further
reference to the court by the Secretary of State, serious irregularities in
the conduct of the investigation and trial came to light, and the
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prosecution accepted that the trial of the appellants and Mr Robinson
had been fundamentally flawed. They were released on unconditional
bail in February 1997 and their appeals were allowed, and their
convictions quashed, on 30 July 1997. The Secretary of State very
promptly decided that the appellants had a right to compensation.
8. This was a grave miscarriage of justice. Making allowance for
the term of imprisonment which Vincent Hickey would in any event
have served for the Chapel Hill Farm armed robbery, the assessor
calculated that he had been wrongfully detained for 13 years and just
over 8 months for the Yew Tree Farm offences. Making similar
allowance for the period Michael Hickey would in any event have been
detained for the Chapel Hill Farm and Tesco armed robberies, and also
of his standing as a young offender, the assessor treated 12 years,
10 months and 4 days as the period for which he had been wrongfully
detained for the Yew Tree Farm offences.
Compensation for miscarriages of justice
9. The background to the current statutory scheme is described in In
re McFarland [2004] UKHL 17, [2004] 1 WLR 1289, paras 8-9, 22, and
R (Mullen) v Secretary of State for the Home Department [2004] UKHL
18, [2005] 1 AC 1, paras 5-6, 25-29, and it is unnecessary to repeat that
summary. The right to compensation is contained in section 133 of the
Criminal Justice Act 1988 which provides, so far as relevant:
“133.—(1) Subject to subsection (2) below, when a
person has been convicted of a criminal offence and when
subsequently his conviction has been reversed or he has
been pardoned on the ground that a new or newly
discovered fact shows beyond reasonable doubt that there
has been a miscarriage of justice, the Secretary of State
shall pay compensation for the miscarriage of justice to the
person who has suffered punishment as a result of such
conviction or, if he is dead, to his personal representatives,
unless the non-disclosure of the unknown fact was wholly
or partly attributable to the person convicted.
(2) No payment of compensation under this section
shall be made unless an application for such compensation
has been made to the Secretary of State.
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(3) The question whether there is a right to
compensation under this section shall be determined by
the Secretary of State.
(4) If the Secretary of State determines that there is a
right to such compensation, the amount of the
compensation shall be assessed by an assessor appointed
by the Secretary of State.”
The Criminal Appeal Act 1995, by section 28, inserted a new subsection
to follow subsection (4):
“(4A) In assessing so much of any compensation payable
under this section to or in respect of a person as is
attributable to suffering, harm to reputation or similar
damage, the assessor shall have regard in particular to—
(a) the seriousness of the offence of which the person
was convicted and the severity of the punishment
resulting from the conviction;
(b) the conduct of the investigation and prosecution of
the offence; and
(c) any other convictions of the person and any
punishment resulting from them.”
The Home Office routinely issues a “Note for Successful Applicants”
which explains but does not of course purport to modify the terms of the
statute. Paragraphs 5-7 are relevant for present purposes:
“5. In reaching his assessment, the assessor will apply
principles analogous to those governing the assessment of
damages for civil wrongs. The assessment will take
account of both pecuniary and non-pecuniary loss arising
from the wrongful charge or conviction and/or loss of
liberty, and any or all of the following factors may be
relevant according to the circumstances:
5.1 Personal pecuniary loss
(a) loss of earnings as a result of the charge or
conviction (to be supported by best available
documentary evidence, together with details
of any State benefits received during the
same period);
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(b) loss of future earning capacity;
(c) legal costs incurred;
(d) additional expenses incurred, eg for
travelling, in consequence of detention,
including such expenses incurred by the
claimant’s immediate family.
5.2 Non-pecuniary loss
Damage to character or reputation; hardship,
including mental suffering; injury to feelings, and
inconvenience.
6. When making his assessment, the assessor will take
into account any expenses, legal or otherwise, incurred by
the claimant in reversing his conviction, or pursuing the
claim for compensation. In submitting their observations
solicitors should state, as well as any other expenses
incurred by the claimant, what their own itemised costs
are, to enable them to be included in the assessment.
7. In considering the circumstances leading to the
wrongful charge or conviction the assessor will also have
regard, where appropriate, to the extent to which the
situation might be attributable to any action, or failure to
act, by the police or other public authority, or might have
been contributed to by the claimant’s own conduct.
Although the amount awarded will take account of this
factor, it will not include any element analogous to
exemplary or punitive damages. The assessor will also
have regard to any other convictions of the claimant and
any punishment resulting from them.”
10. Section 133 was enacted to give domestic effect to article 14(6)
of the International Covenant on Civil and Political Rights, which the
United Kingdom is bound in international law to observe. It provides:
“When a person has by a final decision been convicted of
a criminal offence and when subsequently his conviction
has been reversed or he has been pardoned on the ground
that a new or newly discovered fact shows conclusively
that there has been a miscarriage of justice, the person who
has suffered punishment as a result of such conviction
shall be compensated according to law, unless it is proved
that the non-disclosure of the unknown fact in time is
wholly or partly attributable to him.”
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This paragraph bears a very close affinity to article 3 of the 7th Protocol
to the European Convention on Human Rights, by which the United
Kingdom is not bound. Counsel for the appellants made submissions on
the meaning of “according to law” in article 14(6), but in my opinion
these words are plainly directed to ensuring that the right to
compensation is governed by law and not discretion: UN Human Rights
Committee, General Comment No 13, 13 April 1984. This is achieved
by section 133 since, although the question whether there is a right to
compensation is to be determined by the Secretary of State, a
determination adverse to an applicant will be challengeable on familiar
public law grounds.
11. The award of compensation under section 133 does not prevent
an applicant pursuing any civil claim which he may have as a result of
his wrongful conviction and punishment (although double recovery will
be prevented), but nor does the right to compensation in any way depend
on the existence or proof of any delictual wrong recognised by the law.
Wrongful conviction and punishment may and often are the result of
delinquency on the part of public officials or others, but this is not
necessarily so. The Secretary of State makes payment out of public
funds to victims of miscarriages of justice not because he or his officials
are or are treated as being wrongdoers, but because such victims are
recognised as having suffered what may (as here) be a great injury at the
hands of the state and it is accepted as just that the state, representing the
public at large, should make fair recompense.
12. It is for the assessor to judge, in any given case, what recompense
is fair. Those appointed by the Secretary of State to carry out this task
have, at least in recent years, been senior and distinguished legal
practitioners with particular expertise in the calculation of damages for
personal injuries. Some heads of loss under section 133 will not
ordinarily be found in a personal injuries action, although they may
feature in other tortious claims, but a number of them will and a broadly
similar approach must be appropriate providing proper account is taken
of factors peculiarly attributable to wrongful imprisonment and
punishment. It is noteworthy that section 133 gives the assessor a very
broadly-defined remit. It makes no provision for the sort of scrutiny to
which a court would subject a contested claim involving hundreds of
thousands of pounds. Assessments are made relatively infrequently, and
are not published. I do not think section 133 was intended to encourage
undue legalism.
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The first question: the deduction from notional earnings
13. Mr Engelman’s argument for the appellants, strongly put and
with much citation of authority, was in essence very simple. The
appellants were victims of a serious miscarriage of justice which led to
their wrongful imprisonment for long years by the state. They are
entitled to be compensated. Such compensation should, in accordance
with familiar principles, be on a basis which is fair, just, reasonable and
in accordance with public policy. It is unfair, unjust, unreasonable and
contrary to public policy to reduce earnings lost as a result of wrongful
imprisonment to reflect the free board, clothing and accommodation
afforded to the prisoner. That is not a benefit, it is the very detriment on
which the victim’s claim to compensation depends. He should not be in
effect charged for being wrongfully imprisoned, a procedure revolting to
ordinary notions of fairness.
14. The assessor’s response was also in essence simple. The trauma
and suffering inherent in wrongful conviction and punishment are
compensated by the award of compensation for non-pecuniary loss. The
loss of which loss of earnings is an ingredient has a different object: to
calculate as exactly as possible what in money terms the victim has
actually lost. This calculation depends on a hypothetical assumption,
that the victim had not been in prison at the relevant time, because if he
had been he could not have earned wages in the market. So it must be
assumed for purposes of this calculation that he was not in prison at the
relevant time. On that assumption he would have had earnings, net of
tax, of (let us say) x. But he would not have enjoyed x as a fund
available for spending because if he had not been in prison he would
have had to provide the necessities of life, which must be deducted to
establish what he has actually lost. This is not to charge him for being
in prison, nor is it to treat his wrongful imprisonment as a benefit. It is
to recognise the reality (which authority enjoins decision-makers to do)
that the sums could not have been earned had the earner not paid to
procure the basic necessities of life. It is fair, just and reasonable to
award the victim what he has notionally lost but no more, a course
supported by legal authority and public policy expressed in statute.
15. I am not aware of any decided case in which the present issue has
been contested. It might have been in the unusual case of Meah v
McCreamer [1985] 1 All ER 367, but it appears to have been accepted
in that case (see p 383) that the plaintiff had suffered no financial loss as
a result of going to prison, since the money he had been saved as a result
of being boarded in prison was regarded as exceeding any sum he might
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have earned. So, in choosing between these conflicting submissions, the
House must be guided by principle and analogy. Both parties referred to
authority on the calculation of claims for special damages made by
plaintiffs suing for damages for personal injuries. In Shearman v
Folland [1950] 2 KB 43 the injured plaintiff had lived before the
accident in hotels to which she paid seven guineas a week for board and
lodging. After the accident she spent just over a year in nursing homes
at a cost of twelve guineas a week exclusive of medical expenses. The
judge, in awarding damages, deducted the smaller figure from the larger,
treating the difference as her loss. The Court of Appeal held this
deduction to be excessive, but accepted the principle that a deduction
should be made for the cost of food and lodging which would have had
to be incurred even if the plaintiff had not been injured.
16. The important case of British Transport Commission v Gourlay
[1956] AC 185, established the principle that a plaintiff cannot recover
more than he has lost, that the law must have regard to realities rather
than technicalities and that where a claim lay for the loss of income
which, if earned, would have been taxed, what the plaintiff really lost
was what would have remained to him after payment of tax: see Parry v
Cleaver [1970] AC 1, 13. It was this latter case which identified justice,
reasonableness and public policy as the guiding principle of the common
law in this area.
17. In Daish v Wauton [1972] 2 QB 262 a young child was very
seriously injured and the trial judge, in calculating his loss of future
earnings, made a substantial reduction to reflect the cost of maintaining
himself which the child would have incurred if uninjured but which, in
the event, he would not incur because he would be supported in a state
institution free of cost. The Court of Appeal disapproved of that
approach, holding that benefits received under the National Health
Service should be ignored. But the effect of the Court of Appeal’s
decision was reversed by section 5 of the Administration of Justice Act
1982, which provided:
“In an action under the law of England and Wales or the
law of Northern Ireland for damages for personal injuries
(including any such action arising out of a contract) any
saving to the injured person which is attributable to his
maintenance wholly or partly at public expense in a
hospital, nursing home or other institution shall be set off
against any income lost by him as a result of his injuries.”
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This is the only explicit, non-judicial, expression of public policy in this
field. Its meaning is clear. In assessing the compensation due to an
injured person for loss of earnings caused by his injuries allowance must
be made for savings attributable to his maintenance at public expense.
Such allowance was plainly seen as necessary if the injured person was
not to be over-compensated.
18. After the Court of Appeal decision in Daish v Wauton, but before
the enactment of section 5, the House made two important decisions.
The first of these was Pickett v British Rail Engineering Ltd [1980] AC
136, in which the problem was to assess the earnings of a plaintiff
during years lost to him (and his estate) as a result of the injury of which
he complained. Should allowance be made for the living costs he would
have incurred had he lived? The House held that it should. Lim Poh
Choo v Camden and Islington Area Health Authority [1980] AC 174
concerned a catastrophically injured plaintiff whose expectation of life
was not significantly reduced. She had large claims for loss of earnings
and the cost of future care. The House held that deductions must be
made from the damages awarded to reflect the cost of earning the lost
future income and also the basic living expenses which the injured party
would have incurred in any event.
19. Brief mention may be made of two decisions of the House since
the enactment of section 5, neither of which concerned the permissibility
of deducting living expenses from claims for loss of earnings. Dews v
National Coal Board [1988] AC 1 concerned a claim by an injured
miner to recover pension contributions which he would have made if
uninjured but had not made because of his injury. The non-payment did
not affect his pension rights. The House acknowledged (p 12) the
“fundamental principle of English law that damages for personal injury
are compensatory, and intended so far as money can to put the plaintiff
in the same financial position as if the accident had never happened”.
The object (p 14) is to determine “what the plaintiff has really lost” and
so,
“When a plaintiff is injured and as a result is paid no
wages his immediate real loss is that part of his net
earnings that were available for current expenditure.”
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In Hussain v New Taplow Paper Mills Ltd [1988] 1 AC 514 the issue
was whether, in calculating the injured plaintiff’s claim for loss of
earnings, credit should be given for sums he had received under his
employers’ insurance scheme. The rule was held to be (p 527)
“that prima facie the only recoverable loss is the net loss.
Financial gains accruing to the plaintiff which he would
not have received but for the event which constitutes the
plaintiff’s cause of action are prima facie to be taken into
account in mitigation of losses which that event occasions
to him. In many, perhaps most cases, both losses and
gains will come into the calculation.”
20. In Toneguzzo-Norvell v Burnaby Hospital [1994] 1 SCR 114 the
Supreme Court of Canada considered the case of a catastrophically
injured plaintiff who claimed for loss of earnings both during the period
she would live (as in Lim Poh Choo) and during the period in which, as
result of the injury complained of, she would not live. The court held it
to be “established that a deduction for personal living expenses must be
made from the award for lost earning capacity for the years she will
actually live” and continued:
“A number of considerations suggest that a deduction for
personal living expenses should be made from the award
for lost earning capacity during the ‘lost years’. The first
is the fact that the projected earnings could not have been
earned except on the supposition that the plaintiff would
have been alive to earn them. There can be no capacity to
earn without a life. The maintenance of that life requires
expenditure for personal living expenses. Hence the
earnings which the award represents are conditional on
personal living expenses having been incurred. It follows
that such expenses may appropriately be deducted from
the award. Against this, it is argued that if Jessica had
been born a millionaire, her personal living expenses
during the ‘lost years’ would have been met from other
sources. But this does not negate the fact that in order to
earn income one must live and incur the attendant
expenses.
It can be argued that not to make a deduction for personal
living expenses is to introduce into the award for lost
earning capacity for the ‘lost years’ a measure of
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overcompensation akin to the duplication which the law
avoids in the case of an award for lost earnings during the
plaintiff’s actual lifespan. This deduction has been
justified for the years before the plaintiff’s actual projected
death, on the ground that it avoids duplication between the
award for cost of care and the award for lost earning
capacity. But in fact, the ‘lived years’ and the ‘lost years’
cannot be so easily distinguished. The same reasoning
applies to both: had the plaintiff been in a position to earn
the monies represented by the award for lost earning
capacity, she would have had to spend a portion of them
for livi ng expenses. Not to recognize this is to introduce
an element of duplication and to put the plaintiff in a better
position than she would have been in had she actually
earned the monies in question.”
21. The assessor held, at para 13 of both assessments, that saved
living expenses should be taken into account in computing the
appellants’ loss of earnings claims for a number of reasons, of which the
first was:
“Common law principles require that there should be no
double compensation. Past and future loss of earnings
compensation embraces living expenses that will be paid
for out of such earnings. In fact, because he was
imprisoned, the applicant did not incur such living
expenses. That provides a financial benefit for which
credit must be given. The principle accords with the
common law approach. See for example Hodgson v Trapp
[1989] AC 807 in which, before the later statutory change,
the court felt that past and future benefits must be
deducted so as to avoid double compensation.”
The assessor went on to refer to Meah v McCreamer [1985] 1 All ER
367, and section 5 of the 1982 Act. When his assessment was
challenged the assessor in para 25(c) of the addendum to his assessment,
adhered to his earlier approach:
“The true analysis is that by reason of a miscarriage of
justice, he has suffered a loss of earnings. Had he not
been the victim of a miscarriage of justice, part of those
earnings would have been spent on his own living
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expenses. 25%, as deducted here, probably represents a
modest sum for such living expenses. Having dealt with
the question of what he has lost by reason of his
imprisonment, there is a requirement to consider any setoff
against that loss for any expense which has not been
occasioned by reason of his being in prison. It is in that
context that the deduction from loss of earnings arises in
relation to saved living expenses.”
22. In quashing the assessor’s decision on this issue the judge held
that he had misunderstood the relevant common law principle and
misunderstood or placed undue weight on certain authorities he had
relied on. The judge mentioned section 5 of the 1982 Act, to which he
said he would return, but he does not appear to have done so. In the
Court of Appeal, Auld LJ reviewed this issue in paras 87-104 of his
comprehensive judgment, substantially endorsing the assessor’s
approach. Longmore LJ agreed (paras 126-135), basing his judgment
primarily on the “lost years” approach upheld in Pickett v. British Rail
Engineering Ltd [1980] AC 136. Gage J agreed.
23. It is in my opinion inapt and understandably offensive to the
appellants to regard or treat their imprisonment as a benefit conferred on
them by the state. A Prison Service Instruction (09/1999) on which they
relied forbids deductions for board and lodging from the wages of
prisoners working on enhanced wages schemes in prison or on prerelease
schemes outside prison, accepting that prisoners cannot be
required to pay for their own imprisonment and cannot consent to do so.
I have no doubt that this is a salutary principle. But recognition of that
principle does not in my opinion resolve the issue in this appeal. The
assessor’s task, in relation to the appellants’ loss of earnings claim, was
to assess what they had really lost. That, and that only, was the loss for
which they were to be compensated. The assessment has necessarily to
be hypothetical, but must be as realistic as possible. If the appellants
were awarded the full sum of their notional lost earnings with no
deduction save tax, they would in reality be better off than if they had
earned the money as free men since as free men they would have had to
spend the minimum necessary to keep themselves alive. The deduction
puts the appellants in the position in which they would in reality have
been had they earned the money as free men and so compensates them
for their actual loss. In my opinion, the assessor and the Court of
Appeal reached the correct conclusion, and I would reject this ground of
appeal.
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The second question: the deduction under section 133(4A)(c)
24. The thrust of the appellants’ argument is summarised in para 3
above, from which its restricted focus is apparent. The appellants were
younger men and had much less serious criminal records than
Mr Robinson, and therefore one would have expected any deduction
made under section 133(4A)(c) in their cases to have been smaller, or at
any rate not greater, than that made in the case of Mr Robinson. But, as
already noted, the deductions of 25% and 20% made by the assessor in
their cases substantially exceeded the 10% deduction made by Sir David
Calcutt QC in the case of Mr Robinson. That (it is argued) was a
departure from the principle that like cases should be treated alike and
unlike cases differently, a departure which called for justification, which
has not been given. Mr Engelman relies by analogy on authorities
relating to disparity in sentencing and contends that the appellants have
a justified sense of grievance such that the House should interfere.
25. Mr Burnett QC, for the assessor, replies that his decision on this
point can be disturbed only if it is shown to be unlawful on one of the
recognised public law grounds. In this case it must be shown to be
irrational or, perhaps, vitiated by lack of reasoning. It is neither. The
authorities on disparity in sentencing do not assist.
26. It is convenient to touch first on this disparity argument. In some
cases (of which R v Fawcett (1983) 5 Cr App R(S) 158 is an example)
an appeal against sentence has succeeded because right-thinking
members of the public, learning of a lenient sentence imposed on a codefendant,
would think something had gone wrong with the
administration of justice on also learning of a disproportionately severe
sentence passed on the appellant. In some of the cases such an appellant
is said to have a justified sense of grievance. If the matter is viewed
through his eyes alone, that may sometimes be so. But the appellate
courts of all three United Kingdom jurisdictions have shown themselves
to be, in varying degrees, resistant to disparity arguments of this kind,
and the reason is not hard to discern. For while the perception of the
sentenced defendant is important, a criminal sentence is imposed in the
interests of the public and for its protection. The “right” sentence in a
given case is that shown by statute, authority and other guidance to be
best fitted to serve those ends. Thus a court will, and generally should,
be very slow to impose what it regards as anything other than the right
sentence simply because it or another court has imposed a “wrong”
sentence on a co-defendant. The more usual approach is that very
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recently articulated by the Court of Appeal (Criminal Division) in R v
Tate [2006] EWCA Crim 2373, para 20:
“The fact that the co-defendant Sheppard appears to have
been extremely fortunate is not in our judgment a good
reason for imposing a sentence on the appellant that would
in our judgment be less than the facts of the case merit.”
27. In the case of Vincent Hickey the assessor, in his assessment,
reviewed his criminal activities and said (para 5):
“Having regard to the seriousness of these matters and in
particular the robbery at Chapel Hill Farm, I firmly
conclude that the non-pecuniary loss award should be
subject to a deduction of 25%. This I regard as the very
least deduction that can reasonably be made, having regard
to his criminal behaviour.”
In Michael Hickey’s case also the assessor summarised his criminal
activity and said, at para 6:
“There is no responsible basis upon which such serious
convictions can be ignored in the assessment of nonpecuniary
loss. In the circumstances, I make a reduction
of 20% in respect of such matters from the total award of
non-pecuniary compensation. This is slightly less than
Vincent Hickey because of age and different record.”
When his assessment was challenged, the assessor did not agree that the
10% reduction in Mr Robinson’s case could not be exceeded because of
a supposed need for or expectation of consistency, and declined to alter
his assessment.
28. On the appellants’ application for judicial review the judge
accepted (para 44) that if the same assessor had determined all three
cases he would not have made such different deductions in the
appellants’ cases and Mr Robinson’s. But he also held that when
considered individually and by reference to each other, but without
reference to Mr Robinson, the deductions made in the appellants’ cases
-16-
could not be said to be irrational or otherwise susceptible to challenge.
This conclusion is not challenged. The judge said (para 48):
“[The assessor] simply disagreed with the 10% reduction
which Sir David Calcutt had made in Robinson. Was he to
make what he believed (and, in my judgment, permissibly
believed) to be the correct deduction or was he bound to
allow himself to be influenced by an award with which he
disagreed? In my judgment it was neither irrational nor
otherwise unlawful for Lord Brennan to apply deductions
of 20-25% which were in all other respects
unobjectionable.”
Any sense of grievance which the appellants had would not in the
judge’s opinion be justified, and accordingly the decision could not be
quashed as Wednesbury unreasonable (Associated Provincial Picture
Houses Ltd v Wednesbury Corpn [1948] 1 KB 223).
29. Auld LJ addressed this issue in paras 114-124 of his judgment,
with which the other members of the court agreed. He held that the
assessor’s reasons for departing from his predecessor’s percentage were
reasonable and adequately explained.
30. It is generally desirable that decision-makers, whether
administrative or judicial, should act in a broadly consistent manner. If
they do, reasonable hopes will not be disappointed. But the assessor’s
task in this case was to assess fair compensation for each of the
appellants. He was not entitled to award more or less than, in his
considered judgment, they deserved. He was not bound, and in my
opinion was not entitled, to follow a previous decision which he
considered erroneous and which would yield what he judged to be an
excessive award. While he did not, in his initial assessments, refer to Sir
David’s 10% deduction, he made plain that he regarded the deductions
he did make as the permissible minimum. In his addendum his
disagreement with Sir David was express. Since the appropriate
deduction is a highly judgmental matter and the assessor’s deductions
are not in themselves impugned, I would reject the appeal on this ground
also.
-17-
31. I have, and may perhaps express, some reservations about the
operation of section 133(4A)(c), although these do not bear on the
disposal of either issue in this appeal. Auld LJ, in para 113 of his
judgment, well described the purpose of the provision:
“The mischief at which the provision is directed – the
reason for enabling a deduction to be made for criminality
from the entirety of the non-pecuniary suffering (save for
personal injury) caused by the miscarriage of justice – is,
in my view, two-fold. First, it enables account to be taken
of the concurrent effect of any punishment for criminal
offences of which the claimant has been rightly convicted
and sentenced. Second, it allows an Independent Assessor
to reflect the fact that an undoubted or hardened criminal
may not suffer so greatly as a person of previous good
character from many of the incidents of wrongful
conviction and loss of liberty, in particular as to harm to
reputation, injury to feelings, inconvenience, separation
from family and other unpleasant aspects of incarceration
…”
The factors referred to are all, in my opinion, likely to be very relevant.
But they are, as it seems to me, factors which can and should be inherent
in any assessment of the non-pecuniary loss suffered by any wronglyimprisoned
claimant: it is of the highest relevance that a claimant would
have been in prison in any event or had a very bad criminal reputation
independently of the offence of which he was unjustly convicted. Thus
I would expect account to be taken of these matters at the first stage of
the assessment rather than to base that assessment on assumed and
fictional facts. But if account is taken of such matters at the first stage
of the assessment, I am unclear what justification there can be for
making a percentage deduction at a later stage. This matter, not raised
by counsel in argument, perhaps merits consideration.
32. For the reasons I have given I would dismiss this appeal and
invite written submissions on costs within 14 days.
-18
My Lords,
33. I have had the advantage of reading in draft the opinion of my
noble and learned friend Lord Bingham of Cornhill and gratefully adopt
his description of the facts that have given rise to this appeal and the
issues for your Lordships’ decision.
34. The appellants, Mr Vincent Hickey and Mr Michael Hickey, have
raised in this appeal two issues regarding the compensation awards in
their favour made by the Independent Assessor. First, each of them
contends that, in assessing the compensation that should be paid to him
on account of his wrongful imprisonment in 1979 for the murder of Carl
Bridgewater, the Independent Assessor, having arrived at the sum
calculated to represent what he would have earned had he not suffered
the wrongful imprisonment, erred in deducting a sum estimated to
represent the cost of the bare necessities of life that the appellant would
have had to incur had he remained at liberty. Secondly, each appellant
challenges the deduction, made on account of his past criminality, from
the compensation for non-pecuniary loss that he would otherwise have
been awarded.
35. I am in complete agreement with the reasons given by Lord
Bingham for his conclusion that on the “living expenses” issue the
appeal should be dismissed. I wish to emphasise, in particular, my
agreement that the deduction from a claimant’s notional earnings for the
period he has suffered wrongf ul imprisonment of a sum calculated to
represent the cost of the bare necessities of life that he would, if at
liberty, have had to incur cannot be justified, and has not been sought to
be justified, as representing the value of a so-called benefit to the
claimant of having been maintained at public expense during that
period. I agree with my noble and learned friend Lord Brown of Eatonunder-
Heywood that wrongful imprisonment cannot sensibly be
characterised in any way as conferring a benefit (para 92 of his opinion).
The justification for the deduction is, to my mind, that compensation is
intended, so far as lost earnings are concerned, to provide the claimant
with the sum that, had he been at liberty he would have had at his
disposal to expend or save as he chose. Expenditure on the bare
necessities of life is an essential, not a choice. So the deduction is
necessary to achieve the object of the lost earnings element of a
compensation award.
-19-
36. On the second issue, the deduction for past criminality, the only
point argued before your Lordships has been based on the comparison
between the 10% deduction for past criminality made by Sir David
Calcutt QC in assessing the non-pecuniary loss element of the
compensation awarded to Mr Robinson, a victim of the same
miscarriage of justice as the Hickeys, and the 25% and 20% deductions
made by Lord Brennan QC in assessing the non-pecuniary loss element
of the compensation awarded to Mr Vincent Hickey and Mr Michael
Hickey. It is accepted that Mr Robinson’s criminal record was
significantly worse than that of either of the Hickeys and the comparison
undermines, it is submitted, the fairness, the propriety and,
consequently, the legality of the greater deductions made in their
respective cases. They seek an order remitting to Lord Brennan for
reconsideration the amount of the criminality deductions proper to be
made.
37. I must return to the comparative unfairness point, which, as I
have said, was the only point regarding the criminality deductions
argued before the House. In my opinion, however, that is not the only
point regarding these deductions that arises in this appeal. There has
throughout been another point taken on behalf of the Hickeys that, in my
opinion, deserves your Lordships’ attention. The point relates to the
manner in which Lord Brennan and, before him, Sir David Calcutt have
applied the requirement spelled out in subsection (4A) of section 133 of
the 1988 Act (added by amendment by section 28 of the 1995 Act: see
para 9 of Lord Bingham’s opinion) that in assessing compensation
“attributable to suffering, harm to reputation or similar damage” the
assessor must have regard to, among other things “any other convictions
of the person and any punishment resulting from them” (para (c) of
subsection (4A)). It appears that the practice of Sir David Calcutt was
and of Lord Brennan is to calculate a non-pecuniary loss figure
attributable to “suffering, harm to reputation or similar damage”, taking
into account “the seriousness of the offence of which the person was
convicted and the severity of the punishment resulting from that
conviction” (para (a) of subsection (4A) and “the conduct of the
investigation and prosecution of the offence” (para (b) of the
subsection”), and then to deduct from that figure a percentage
attributable to the person’s previous criminal record. The deduction is
said to be justified, or perhaps to be required, by para (c) of the
subsection.
38. Thus, in para 5 of his Assessment of the compensation to be paid
to Mr Vincent Hickey Lord Brennan set out the three paragraphs of
-20-
subsection (4A), expatiated on the seriousness of the claimant’s previous
convictions and concluded by saying -
“Having regard to the seriousness of these matters … I
firmly conclude that the non-pecuniary loss award should
be subject to a deduction of 25%. This I regard as the very
least deduction that can reasonably be made, having regard
to his criminal behaviour.”
Lord Brennan then considered the amount of the award for nonpecuniary
loss that would be appropriate, arrived at the figure of
£190,000 and reduced that sum by applying the 25% deduction (para 10
of the Assessment). The £190,000 included £50,000 for psychiatric
injury to Mr Hickey attributable to his wrongful imprisonment and also
included whatever sum Lord Brennan had decided was appropriate in
respect of “the conduct of the investigation and prosecution of the
offence” (para (b) of section 4(A)).
39. The Assessment of the compensation to be awarded to
Mr Michael Hickey followed much the same lines save that a sum in
respect of aggravated damages was added to the non-pecuniary award.
£140,000 was awarded for “all factors other than psychiatric illness”,
£35,000 for the “aggravating features of the case” and £75,000 for
psychiatric illness, giving a total of £250,000. The £250,000 was then
subjected to the 20% deduction for past criminality (see para 10 of the
Assessment).
40. Lord Brennan later published an Addendum to his two
Assessments. One section of this dealt with “Reduction for previous
offending”. It is plain from the Addendum that Lord Brennan regarded
the “aggravating factors” to which he had referred as falling within the
section 4(A)(b) matters to which the assessor was directed to pay
particular regard. As to the application of the deduction to the whole of
the award for non-pecuniary loss, Lord Brennan explained his thinking
in para 20 of the Addendum.
“Any reduction because of previous convictions, and
imprisonment if it has been served, must apply to all the
non-pecuniary loss award save for one exception. Sir
David [Calcutt] treated that part of an award for personal
injury (physical or mental) as not subject to any reduction.
-21-
I agree. It is fair to treat this as arising independently of
any previous offending.”
Lord Brennan’s agreement that the part of an award relating to a
physical or mental injury should not be reduced on account of any past
criminality led, since he had subjected both the £50,000 he awarded to
Mr Vincent Hickey and the £75,000 he awarded to Mr Michael Hickey
for psychiatric injury to the past criminality deduction, to an amendment
of his original assessment. The deduction was not applied to the £50,000
or to the £75,000.
41. In their respective judicial review applications both appellants
referred to the application of the past criminality deduction to “the entire
sum referable to non-pecuniary loss” as a misdirection (see para 55 of
Mr Vincent Hickey’s Grounds and para 57 of Mr Michael Hickey’s and
both sought, inter alia, an order quashing the decision “to make the …
deduction for previous offending from the sum total for non-pecuniary
loss” (see para 72(a)(iii) of Mr Vincent Hickey’s application and para
74(a)(iii) of Mr Michael Hickey’s).
42. The Summary Grounds of Defence filed on behalf of Lord
Brennan (and on behalf of the Home Secretary) adverted to this issue
and contended that
“The Assessor’s approach is a lawful one which he was
entitled to adopt” (para 4.3)
43. Maurice Kay J, as he then was, dealt with this issue in para 42 of
his judgment. He said he had “… no doubt that sub-section (4A)
permits deduction from the whole of the non-pecuniary award”.
44. The Hickeys (and Mr O’Brien) appealed to the Court of Appeal.
One of the specified grounds of appeal was that Maurice Kay J was in
error in permitting a deduction from the non-pecuniary damages
attributable to “the misconduct by the authorities, the fact of loss and
liberty and aggravated damages” (see paras 4, 5 and 6 of their respective
Section 7 Grounds of Appeal).
-22-
45. Auld LJ dealt with the issue in paras 105 to 113 of his judgment.
He concluded in para 112 of his judgment that:
“… it is plain that sub-section (4A) permits deduction
from the whole of the non-pecuniary award, save any sum
included for personal injury”
and, in para 113, said this:
“The mischief at which the provision [i.e. ss (4A)(c)] is
directed – the reason for enabling a deduction to be made
for criminality from the entirety of the non-pecuniary
suffering (save for personal injury) caused by the
miscarriage of justice – is, in my view, two -fold. First, it
enables account to be taken of the concurrent effect of any
punishment for criminal offences of which the claimant
has been rightly convicted and sentenced. Second, it
allows an Independent Assessor to reflect the fact that an
undoubted or hardened criminal may not suffer so greatly
as a person of previous good character from many of the
incidents of wrongful conviction and loss of liberty, in
particular as to harm to reputation, injury to feelings,
inconvenience, separation from family and other
unpleasant aspects of incarceration.”
Longmore LJ and Gage J both agreed with what Auld LJ had said on
this point and added nothing of their own.
46. My Lords the history in this litigation of the issue whether
section 133 (4A)(c) justifies a past criminality deduction from the whole
of a non-pecuniary award (save such part as relates to physical or mental
injury – see para 20 of Lord Brennan’s Addendum and para 112 of Auld
LJ’s judgment) demonstrates, I respectfully suggest, that the issue has
been alive in these proceedings since their inception and, since the leave
to the appellants to appeal to this House was in no way limited, can be
addressed by your Lordships, whether or not it has been specifically
addressed by counsel.
47. In my opinion the reasoni ng of Auld LJ in para 113 of his
judgment, and of Maurice Kay J in para 42 of his, fail to justify the
-23-
application of a past criminality deduction to compensation awarded to
reflect any improprieties in the conduct of the investigation and
prosecution of the offence (i.e. the subsection (4A)(b) matters). In para
113 Auld LJ noted that a hardened criminal might not suffer so greatly
as a person of previous good character from many of the incidents of
wrongful conviction and loss of liberty. That may well be true, but what
has it to do with improprieties committed by the police or by
prosecuting authorities when investigating and prosecuting an offence?
If a sum is to be awarded by way of compensation for the commission of
those improprieties, why is it to be supposed that a hardened criminal is
not as much aggrieved by them as a person with no criminal record? I
suppose that a hardened criminal might accept prosecution and
imprisonment as a risk inherent in his lifestyle. But would he accept, as
part of that risk, the risk of his conviction for an offence he had not
committed being procured by a false confession extracted from him or
others by violence or other improper persuasion, or by deliberate nondisclosure
of exonerating evidence held by the police or prosecuting
authorities, or by perjured evidence in the giving of which the police
were complicit? I hope he would not, for although a hardened criminal
may live a life of disrespect for the rule of law, he is as entitled as
everyone else to expect justice when he finds himself in a court of law.
To pretend or to assume that a hardened criminal’s feelings and sense of
outrage, when the victim of a miscarriage of justice for which the
conduct of the authorities in the investigation and prosecution of the
offence may be in part responsible, are different in kind from those of a
person with no criminal record who finds himself in a similar position is
to my mind unacceptable. In my opinion, there is no justification
whatever for applying the past criminality deduction to the part of a nonpecuniary
loss award that reflects the subsection (4A)(b) matters. Nor
can I see any logic at all in applying a past criminality deduction to the
incidents of loss of liberty experienced by a person who has never
before been in prison. Why should a record of petty offending that has
not led to a sentence of imprisonment justify any deduction at all? The
misery of imprisonment as a result of a miscarriage of justice might be
less for a person who had had previous experience of justified
imprisonment, but why should it be less for a person who had not?
48. Indeed the whole concept of an indiscriminate deduction on
account of past criminality seems to me to be wrong in principle and not
justified by section 133(4A). The subsection requires the assessor to
assess the compensation attributable to “suffering, harm to reputation or
similar damage” and directs the assessor, in doing so, to have regard in
particular to the para (a), (b) and (c) matters. It says nothing about a
deduction across the board on account of past criminality. Past
convictions may be very relevant to the sum to be awarded for loss of
-24-
reputation. Past imprisonment may be relevant to the degree of
suffering occasioned by being in prison. The sum to be awar ded in
respect of individual types of suffering or harm that go to make up the
total sum to be awarded for non-pecuniary loss may be less because, by
reason of past convictions or past imprisonment, the suffering or harm
can be adjudged to be less.
49. However, in my opinion an approach that treats paragraph (c) as
justifying an indiscriminate deduction across the board not only fails to
reflect what subsection (4A), properly construed, directs but runs the
risk of past criminality being taken into account twice; first when
assessing the value to be placed on the suffering or harm and, secondly,
in the making of the deduction. Thus, an inveterate fraudster who has a
record of convictions for fraud may have a fairly minimal loss of
reputation when he comes to be wrongly convicted for fraud. Why
should the value of his minimal loss of reputation be further reduced on
account of his previous convictions for fraud. These convictions should
be taken into account once and for all when assessing the harm caused
to his reputation by the wrongful conviction. Further, if a person has
been convicted of an offence and punished for it, why should he be
punished again when, as a victim of a miscarriage of justice, he becomes
entitled to section 133 compensation? If his earlier malfeasance is
relevant to the compensation to be given him for the degree of damage
caused by the wrongful conviction to his reputation, or if the period of
his past imprisonment can be taken to have reduced the degree of his
suffering when finding himself, having been wrongly convicted, again
in prison, so be it. But to reduce the amount of compensation simply
because the claimant has previously been convicted and punished is not
required by subsection (4A), is not supported by any logic, and is
inflicting a further punishment for an offence already dealt with by the
criminal justice system. I do not accept that this could possibly have
been Parliament’s intention.
50. For the reasons I have tried to explain I regard the practice of
applying an indiscriminate deduction to non-pecuniary damages as
wrong in principle. However, the appellants’ counsel, Mr Engelmann,
has concentrated his attack on the lack of consistency between the 25%
and 20% deductions made in respect of the appellants and the 10%
deduction made by Sir David Calcutt in respect of Mr Robinson. My
noble and learned friend Lord Bingham has rejected this attack. He has
done so first by analogy with the situation which arises where an appeal
against sentence is based on more lenient sentencing of some other
person or persons who have been convicted of a similar offence
committed in similar circumstances. Lord Bingham has pointed out that
-25-
disparity in sentencing is not usually, without more, a basis for a
successful appeal. Second, my noble and learned friend has posed the
Wednesbury test (Associated Provincial Picture Houses Ltd v.
Wednesbury Corpn [1948] 1 KB 223); were the percentage deductions
within the bracket of judgmental discretion available to the assessor?
He has concluded that they were and a majority of your Lordships are in
agreement with him on both points.
51. My Lords I do not find this issue at all easy but I do not believe,
first, that the analogy with disparity in sentencing is an apt one or,
secondly, that sufficient weight was attributed by Lord Brennan to the
degree of disparity when his 25% and 20% deductions are compared
with the 10% Robinson deduction. As to the disparity in sentencing
analogy, the role of a judge in sentencing is to take account of the nature
of the offence, the nature of the accused’s criminal conduct and what the
public interest requires, as well, no doubt, of other relevant
considerations. In sentencing the judge owes a duty to the public, who
deserve to be protected from criminal conduct, to deal with the accused
in accordance with law and having regard to the circumstances of the
case. If a previous sentence was too lenient, the judge’s duty to the
public may preclude him from allowing that leniency to deflect him
from imposing the proper sentence for comparable criminal conduct in
the case before him.
52. These considerations have, in my opinion, no counterpart in
section 133 compensation assessments. These are cases where the
claimants for compensation are not wrongdoers from whose activities
the public deserve protection or who must be taught that crime does not
pay. They are victims of miscarriages of justice. They have been
subjected to sentences of imprisonment after convictions procured by
miscarriages of justice. The public, on whose behalf judges impose
sentences on those convicted in cases tried before them, owe a debt to
those who, victims of miscarriages of justice, have been wrongly
convicted, sentenced and imprisoned. Section 133 recognises that debt
and provides a legally enforceable scheme for compensation to be
assessed and paid. The compensation may be regarded as recognising
and intended to settle that debt. If the assessment of the compensation
gives rise to an understandable, and, in that sense, legitimate feeling of
unfairness, it is difficult to see how the payment of the compensation so
assessed can be regarded as ameliorating the claimant’s sense of
grievance arising from the miscarriage of justice. In these
circumstances one of the purposes of section 133 will not be met. In
disparity of sentencing cases the public interest may require that correct
sentences be pronounced. In section 133 compensation cases, by
-26-
contrast, the public interest, in my opinion, requires at least that the
assessment of the compensation should appear to be fair. Where there is
the disparity that here exists between the 10% deduction made in respect
of Mr Robinson’s compensation for non-pecuniary loss and the 20% and
25% deductions made in respect of the Hickeys’ compensation for nonpecuniary
loss, and bearing in mind the accepted greater seriousness of
Mr Robinson’s previous criminality when compared with that of either
of the Hickeys, the assessment of the compensation awarded to them
does not appear to be fair.
53. In my respectful opinion Lord Brennan ought to have attributed
much more weight to the 10% deduction fixed by Sir David Calcutt for
Mr Robinson than he evidently did. The analogy with disparity of
sentencing cases is, in my opinion, an unsound one.
54. For all these reasons I would remit the compensation payable to
the appellants for non-pecuniary loss back to Lord Brennan for
reconsideration. I would allow the appeals on the deduction for past
criminality issue.
LORD RODGER OF EARLSFERRY
My Lords,
55. I agree with my noble and learned friends, Lord Bingham of
Cornhill and Lord Brown of Eaton-under-Heywood, that, for the reasons
which they give, the appeals relating to the second question should be
dismissed. I have, however, formed the view that there is merit in the
appellants’ first ground of appeal.
56. When the Home Secretary accepts that compensation should be
paid for a wrongful charge, conviction or imprisonment, the applicant
receives a “Note for Successful Applicants”. Para 5 tells him that:
“In reaching his assessment, the assessor will apply
principles analogous to those governing the assessment of
damages for civil wrongs. The assessment will take
account of both pecuniary and non-pecuniary loss arising
-27-
from the wrongful charge or conviction and/or loss of
liberty….”
57. Where a defendant has to pay damages for personal injuries
suffered by a claimant, the basic way that a judge assesses his pecuniary
loss is by comparing the claimant’s actual position with his hypothetical
position if the wrong in question had not happened. By analogy, the
assessor has to compare the applicant’s actual position with his
hypothetical position if he had not been wrongly charged, convicted or
imprisoned – whether or not that was due to anyone’s fault.
58. In many cases of damages for personal injuries the claimant will
argue that his financial position has been affected in either or both of
two ways. First, he will say that, as a result of being injured, he has
suffered and will continue to suffer loss by reason of incurring
additional non-profitable expenditure, eg, on making his home more
accessible or on care in a private nursing home. Secondly, he will say
that, because of his injuries, he has been prevented from earning money
which he would otherwise have made, usually by working for a wage or
salary.
59. If a claimant has been so badly injured that he has to receive fulltime
care or treatment in a private nursing home or similar facility and
gives up his house, the defendant may point out that, while in the
nursing home, he is being accommodated and fed. If he had not been
injured, he would still have had to accommodate and feed himself.
Should his claim for damages for the cost of the nursing home be
reduced to take account of the fact that this expenditure saves him the
cost of providing accommodation and food for himself elsewhere?
60. Going further, if, as a result of his injuries, the claimant is housed
and fed in a hospital at public expense, should his claim for damages be
reduced on the basis that he has received a positive be nefit in the shape
of free board and lodging? Similarly, here, on one view it could be
argued that, by providing the appellants with free accommodation, food
and clothing, Her Majesty’s Government actually conferred a benefit on
them – albeit one that they did not want and which ought never to have
been inflicted upon them. In assessing their compensation should an
allowance be made for that benefit? The argument that it should is
inherently very unattractive. But a version is found in the assessor’s
determination of the appellants’ “saved living expenses” in his
Assessments for both appellants.
-28-
61. Before going any further, it is right to recall that, in the words of
Lord Bridge of Harwich in Hussain v New Taplow Paper Mills Ltd
[1988] 1 AC 514, 527, prima facie the only loss which a claimant can
recover is his net loss. But, as Lord Reid observed in Parry v Cleaver
[1970] AC 1, 13, there is no universal rule and the common law treats
the matter as one depending on justice, reasonableness and public
policy.
62. In his Assessments the assessor dealt, at para 13, with “saved
living expenses” in this way:
“Common law principles require that there should be no
double compensation. Past and future loss of earnings
compensation embraces living expenses that will be paid
for out of such earnings. In fact, because he was
imprisoned, the applicant did not incur such living
expenses. That provides a financial benefit for which
credit must be given.”
Under reference to the concession apparently made by Mr David Kemp
QC in Meah v McCreamer [1985] 1 All ER 367, 383e-f, the assessor
commented that “this leading expert clearly considered that the financial
benefit of board in prison was to be regarded as a credit or deduction
against other financial loss of earnings.” He also noticed that “the
experienced judge” (Woolf J) had accepted this approach. Consistently
with that line of argument, in one section of his written case counsel for
the assessor also contended that the gratuitous provision of these
necessities was a collateral benefit that must be deducted from the gross
loss in order to ensure that the appellants were not compensated for
something which had already been provided to them.
63. Not only is that approach inherently unattractive: it also infringes
a major constitutional principle.
64. During the period when the appellants were in prison the relevant
“domestic” duties of the authorities were to be found in the Prison Rules
1964 (SI 1964/388) made under the Prisons Act 1952. By rule 20(2), as
convicted prisoners, the appellants had to be provided with clothing
adequate for warmth and health in accordance with a scale approved by
the Secretary of State. By rule 21(2), as convicted prisoners, they were
not allowed to have any food other than that ordinarily provi ded and, by
-29-
sub-paragraph (4), the food had to be wholesome, nutritious, well
prepared and served, reasonably varied and sufficient in quantity. By
rule 22(1) they were not allowed to have alcohol. Finally, by rule 24
they had to be provided with a separate bed and with separate bedding
adequate for warmth and health.
65. Doubtless, it would be possible to calculate the notional cost to
the Exchequer of keeping the appellants in gaol for 13 years 8 months.
But, any such figure would include the cost of having secure buildings
and the necessary number of staff to maintain discipline, prevent
escapes, provide training and look after the prisoners’ welfare etc. So it
would not be an accurate reflection of any “benefit” which – however
unwillingly – the appellants received in the form of clothing, food and
accommodation. The market value of those elements to a consumer
would clearly be very much less than the cost of providing them in a
prison.
66. Nothing in the Prisons Act or in the 1964 Rules would have
authorised the Home Secretary to charge the appellants for their clothing
or board and lodging. That being so, as a matter of high constitutional
policy, the Home Secretary and those acting on his behalf would have
had no power to levy a charge on the appellants for those items. In
Attorney General v Wilts United Dairies Ltd (1921) 37 TLR 884 the
Food Controller had imposed a charge of 2d per gallon as a condition of
the grant of a licence to purchase milk. The case proceeded on the basis
that the sums were to be paid into the National Exchequer. Referring to
the Bill of Rights, Atkin LJ said, at p 886:
“Though the attention of our ancestors was directed
especially to abuses of the prerogative, there can be no
doubt that this statute declares the law that no money shall
be levied for or to the use of the Crown except by grant of
Parliament. We know how strictly Parliament has
maintained this right – and, in particular, how jealously the
House of Commons has asserted its predominance in the
power of raising money…. In these circumstances, if an
officer of the executive seeks to justify a charge upon the
subject made for the use of the Crown (which includes all
the purposes of the public revenue), he must show, in clear
terms, that Parliament has authorized the particular
charge.”
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He added, at p 887:
“It makes no difference that the obligation to pay the
money is expressed in the form of an agreement. It was
illegal for the Food Controller to require such an
agreement as a condition of any licence. It was illegal for
him to enter into such an agreement. The agreement itself
is not enforceable against the other contracting party; and
if he had paid under it he could, having paid under protest,
recover back the sums paid, as money had and received to
his use.”
The corresponding passages in the judgment of Scrutton LJ are equally
familiar. The decision of the Court of Appeal was affirmed by this
House ((1922) 38 TLR 781) and has been regarded ever since as
embodying a fundamental principle. See, for instance, R v Richmondupon-
Thames London Borough Council, Ex p McCarthy & Stone
Developments Ltd [1992] 2 AC 48.
67. Although no mention was made of these authorities in argument,
Mr Engelman cited a Prison Service Instruction 09/99 which referred to
a previous practice of making deductions in respect of board and
lodging from the wages of prisoners on enhanced earnings schemes.
Four prisoners had brought proceedings for judicial review of the
deductions. The Instruction explained that the Home Office had
conceded the cases in the light of legal advice that the deductions were
unlawful “because prisoners cannot be required to pay for their own
imprisonment, and cannot consent to pay for their own imprisonment”.
The form of the advice (echoing the judgment of At kin LJ) shows that it
was based on the Wilts United Dairies line of authority. The advice was
plainly correct. Equally correctly, in his oral submissions on behalf of
the assessor Mr Burnett QC accepted that the Home Secretary could not
have charged for the clothing, food and accommodation provided to the
appellants while in prison. Departing to this extent from the approach in
his written case, counsel also accepted the corollary that, in assessing
the appellants’ loss, the assessor would not have been entitled to make
any allowance for the cost of these items as a benefit conferred on the
appellants. In my view that is also plainly correct.
68. In para 25(c) of the Addendum to his Assessments, however, the
assessor gave a somewhat different justification for his deduction for
saved living expenses:
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“There is no question here of requiring the applicant to
pay for his board and lodging in prison, nor any question
of treating Mr O’Brien in a way that puts him at a
disadvantage compared to such a convicted prisoner. The
true analysis is that by reason of a miscarriage of justice,
he has suffered a loss of earnings. Had he not been the
victim of a miscarriage of justice, part of those earnings
would have been spent on his own living expenses. 25%,
as deducted here, probably represents a modest sum for
such living expenses. Having dealt with the question of
what he has lost by reason of his imprisonment, there is a
requirement to consider any set-off against that loss for
any expense which has not been occasioned by reason of
his being in prison. It is in that context that the deduction
from loss of earnings arises in relation to saved living
expenses.”
Although at first blush there may seem to be force in this argument, the
authorities show that the policy of the law is considerably more subtle.
69. In Shearman v Folland [1950] 2 KB 43 the plaintiff had been in
the habit of living in hotels at an average cost of 7 guineas a week. As a
result of being injured by the negligence of the defendant’s servant, she
was confined for 55 weeks to a nursing home where the fees amounted
to 12 guineas a week. The defendant argued that, on this aspect of the
plaintiff’s claim, he should only have to pay an amount based on a loss
of 5 guineas per week, being the difference between the cost of the
nursing home and the cost of the hotels in which she would have stayed
but for the accident. Giving the judgment of the Court of Appeal,
Asquith LJ rejected that argument on the basis that “The precise style in
which she would probably or might well have lived is, in our view, a
collateral matter, and the two payments are not in pari materia”: [1950]
2 KB 43, 50. He illustrated the hazards of any other approach by
various examples, including this one, at p 47:
“A millionaire, accustomed to live at a palatial hotel,
where his weekly expenses far exceed the charges of the
nursing-home to which, after being injured by the
defendant’s negligence, he is transplanted, would recover
nothing by way of special damage. Could it really lie in
the mouth of the wrongdoer in such a case to say: ‘I am
entitled to go scot-free; I have, by my negligent act, not
merely inflicted no loss but conferred a net financial
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benefit on the plaintiff by saving him from the
consequences of his habitual extravagance’?”
Asquith LJ went on to hold, however, that if the plaintiff in that case had
led evidence to show what proportion of the twelve guineas a week was
attributable to board or lodging in the nursing home, it would have been
open to the judge to make a deduction in respect of that. In the absence
of such evidence the court was not prepared to make its own assessment.
On the other hand, Asquith LJ considered that, even in the absence of
evidence, a jury would have been entitled to estimate the element in the
fees referable to food at £1 per week. So the court made a deduction of
£55 from the sum awarded for the fees which the plaintiff had incurred
for her stay in the nursing home.
70. What is significant for present purposes is that the Court of
Appeal preferred to deduct the elements for accommodation and food,
“the domestic element”, from the plaintiff’s loss in the form of her
outlays on nursing home fees. In this way the court treated the
plaintiff’s normal expenditure on accommodation and food as a
collateral matter which was no concern of the defendant. Indeed, as a
matter of policy – of the kind envisaged by Lord Reid in Parry v
Cleaver [1970] AC 1, 13 – the law proceeds on the basis that the way the
claimant spent his income or would spend his damages is not the
defendant’s business. That policy was reiterated by Lord Griffiths in
Dews v National Coal Board [1988] 1 AC 1. The plaintiff sought
damages for loss of earnings during a period of 31 weeks when he was
off work due to injuries. The claim included a sum representing the
value of contributions which would have been made to a pension
scheme during that period. The plaintiff’s ultimate pension entitlement
was not affected, however, by the absence of these contributions. The
House rejected this aspect of his claim. In the course of his reasoning
Lord Griffiths said, at p 14E-G:
“When a plaintiff is injured and as a result is paid no
wages his immediate real loss is that part of his net
earnings that were available for current expenditure. In
respect of this part of his earnings the object of which is to
provide income available for current expenditure the
tortfeasor is, subject to sums necessarily spent to earn the
income, entitled to no credit for expenditure saved as a
result of the injury; the principle that it is no concern of
the tortfeasor how the plaintiff chooses to spend his
income applies.”
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Lord Mackay of Clashfern also observed, at p 17D-E, that it is
“generally true that a tortfeasor is in no way concerned with how a
plaintiff might have spent the remuneration to which he would have
been entitled had he not been injured.”
71. The policy was seen at work in Shearman v Folland. It also
means that a claimant who is awarded damages for his pre-trial loss of
earnings may be left wi th more capital than he would have had if he had
been earning and spending his money in his usual way. Indeed, as Lord
Brown points out, since the appellants are to be compensated under their
non-pecuniary head of claim for the lost pleasures of a (hypothetical)
fulfilled life outside prison, as a matter of pure logic it might seem
appropriate to make virtually no award for loss of earnings on the view
that they would have had to spend those earnings in order to achieve that
pleasurable existence. But, because of the policy adopted by the law in
personal injuries cases, that approach is not applied in calculating
awards for loss of earnings during the claimant’s lifetime. So it should
not be applied to the appellants – and indeed counsel for the assessor did
not suggest otherwise.
72. Taken at their broadest, the statements by Lord Griffiths and
Lord Mackay suggest that, as a matter of policy, a defendant who has to
pay damages for loss of earnings is entitled to no credit for the
expenditure on board and lodging which a claimant has saved as a result
of his injury. On that approach, the only proper basis for making an
allowance for board and lodging would be as a deduction from any
award for the cost of private nursing home or similar care for the
claimant.
73. In Lim Poh Choo v Camden and Islington Area Health Authority
[1980] AC 174 the plaintiff, Dr Lim, had claims for both loss of
earnings and the cost of private care. By the time of the hearing before
this House, as a result of the catastrophic injuries which she had suffered
in the course of medical treatment, not only was the plaintiff unable to
carry on her career as a psychiatrist, but she was having to be cared for
in a private nursing home in England. In considering how to approach
the question of the plaintiff’s living expenses, Lord Scarman adopted the
approach of the Court of Appeal in Shearman. He said, at p 191D-G:
“This is necessarily a hypothetical figure in the case of a
‘lost years’ claim, since the plaintiff does not survive to
earn the money: and, since there is no cost of care claim
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(the plaintiff being assumed to be dead), it falls to be
deducted from the loss of earnings award. But where, as
in the present case, the expectancy of life is not shortened
but incapacity exists, there wi ll be a cost of care claim as
well as a loss of earnings claim. How should living
expenses be assessed and deducted in such a case? One
approach, analogous to the method necessarily adopted in
‘lost years’ cases, would be to attempt an assessment of
how much the plaintiff would have spent and upon what –
always a most speculative exercise. How, for instance,
could anyone tell how Dr Lim would have ordered her
standard of living, had she been able to pursue her career?
Another approach is, however, available in the case of a
living plaintiff. In Shearman v Folland [1950] 2 KB 43
the Court of Appeal deducted what it described as the
‘domestic element’ from the cost of care. Inevitably, a
surviving plaintiff has to meet her living expenses. This
approach, being on the basis of a future actuality (subject
to the uncertainties of life), is far less hypothetical than the
former (which, ‘faute de mieux’, has to be adopted in ‘lost
years’ cases). It is a simpler, more realistic, calculation
and accords more closely with the general principle of the
law that the courts in assessing compensation for loss are
not concerned either with how the plaintiff would have
used the moneys lost or with how she (or he) will use the
compensation received.”
The trial judge had excluded the domestic element from his calculation
of the cost of pre-trial care in Malaysia. Lord Scarman endorsed that
approach at p 194H and went on, at p 195B and G, to make an
appropriate deduction for the domestic element both in calculating the
cost of pre-trial care in England and in settling the multiplicand to be
used in calculating the cost of future care.
74. As a result of being wrongly convicted and imprisoned the
appellants were provided with accommodation, food and clothing at Her
Majesty’s expense. They have accordingly no claim for sums spent by
them on their care from which a domestic element can be deducted. So
the approach favoured by the Court of Appeal in Shearman and by this
House in Lim Poh Choo – deducting the domestic element from the
award for the cost of care – cannot be applied. Despite this, Mr Burnett
submitted that, in assessing the appellants’ loss of earnings, the assessor
had been right to take account of the sums which they would have had to
pay for basic accommodation and food if they had been out in the world
-35-
earning a living. Given that the appellants had not paid for their keep in
prison, as in “lost years” claims, faute de mieux the sum should be
deducted from the appellants’ compensation for loss of earnings during
the period when they were imprisoned.
75. In Andrews v Grand & Toy Alberta Ltd [1978] 2 SCR 229 the
Supreme Court of Canada had to deal with a case where the plaintiff
was claiming both future loss of earnings and the cost of future care.
Dickson J said, at pp 250-251:
“It is clear that a plaintiff cannot recover for the expense
of providing for basic necessities as part of the cost of
future care while still recovering fully for prospective loss
of earnings. Without the accident, expenses for such items
as food, clothing and accommodation would have been
paid for out of earnings. They are not an additional type
of expense occasioned by the accident.
When calculating the damage award, however, there are
two possible methods of proceeding. One method is to
give the injured party an award for future care which
makes no deduction in respect of the basic necessities for
which he would have had to pay in any event. A
deduction must then be made for the cost of such basic
necessities when computing the award for loss of
prospective earnings: ie the award is on the basis of net
earnings and not gross earnings. The alternative method is
the reverse: ie to deduct the cost of basic necessities when
computing the award for future care and then to compute
the earnings award on the basis of gross earnings.
The trial judge took the first approach, reducing loss of
future earnings by 53 per cent. The Appellate Division
took the second. In my opinion, the approach of the trial
judge is to be preferred. This is in accordance with the
principle which I believe should underlie the whole
consideration of damages for personal injuries: that
proper future care is the paramount goal of such damages.
To determine accurately the needs and costs in respect of
future care, basic living expenses should be included.
The costs of necessaries when in an infirm state may well
be different from those when in a state of health. Thus,
while the types of expenses would have been incurred in
any event, the level of expenses for the vi ctim may be seen
as attributable to the accident. In my opinion, the
-36-
projected cost of necessities should, therefore, be included
in calculating the cost of future care, and a percentage
attributable to the necessities of a person in a normal state
should be reduced from the award for future earnings.”
Unlike the House in Lim Poh Choo, the Supreme Court preferred to
make the deduction from the award for loss of earnings rather than from
the award for the cost of care. It should also be noted that the reason
which the court gave for deducting the cost of basic necessaries applies
only where the plaintiff is awarded damages for both loss of earnings
and nursing home or similar care: the aim is to avoid duplication in the
two awards.
76. In Watkins v Olafson [1989] 2 SCR 750 the plaintiff had been
cared for by the state between the accident and the trial and so had no
claim for the cost of care during that period. The Court of Appeal of
British Columbia held that, in calculating the plaintiff’s pre-trial loss of
income, allowance should be made for the plaintiff’s basic living
expenses. Consistently with the reasoning in Andrews, the Supreme
Court held that this was wrong. McLachlin J said, at p 773:
“In calculating loss of future earning capacity in cases
where an award for future care is made, a deduction is
made from the award for lost earning capacity for living
expenses to avoid duplication between the two heads of
damage. The Court of Appeal in this case applied similar
reasoning to the plaintiff’s pre-trial lost income. However,
the basis for making a deduction on this account –
duplication between two heads of damage – was lacking,
there being no award for pre-trial cost of care. No case
was cited to us in which a deduction for living expenses
has been made from damages for pre-trial loss of earning
capacity and I see no need to introduce such a practice.”
By analogy, it could be argued that, since the appellants have no claim
for the cost of care, no deduction for the cost of necessities need be
made from the compensation for their loss of earnings.
77. In arguing in favour of such a deduction, counsel for the assessor
referred to the passage from Lord Griffiths’ speech in Dews v National
Coal Board which I have already quoted in para 70. There Lord
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Griffiths acknowledged that, when paying damages for the loss of
income, a defendant could take credit for sums which the plaintiff would
necessarily have spent in order to earn the income. There was no
reason, counsel argued, to confine such sums to, for example, the
substantial travel expenses which a self-employed businessman would
have had to incur in order to earn his income. It would have been
equally necessary for the businessman to keep body and soul together in
order to earn the income in question. So the cost of minimum living
expenses should be deducted as a necessary expense from any award for
loss of earnings.
78. In support of this argument Mr Burnett cited the decision of the
Supreme Court of Canada in Toneguzzo-Norvell v Burnaby Hospital
[1994] 1 SCR 114. The plaintiff had suffered horrendous injuries as a
result of which her life expectancy had been reduced. She claimed
damages for loss of earning capacity during her lifetime and during the
“lost years”. The Supreme Court held that a deduction for necessary
living expenses should be made in respect of both elements of her claim
– even though, during the “lost years”, she would ex hypothesi be dead
and so not incurring any care costs. McLachlin J said this:
“There can be no capacity to earn without a life. The
maintenance of that life requires expenditure for personal
living expenses. Hence the earnings which the award
represents are conditional on personal living expenses
having been incurred. It follows that such expenses may
appropriately be deducted from the award…. It can be
argued that not to make a deduction for personal living
expenses is to introduce into the award for lost earning
capacity for the ‘lost years’ a measure of
overcompensation akin to the duplication which the law
avoids in the case of an award for lost earnings during the
plaintiff’s actual lifespan. This deduction has been
justified for the years before the plaintiff’s actual projected
death, on the ground that it avoids duplication between the
award for cost of care and the award for lost earning
capacity. But in fact, the ‘lived years’ and the ‘lost years’
cannot be so easily distinguished. The same reasoning
applies to both: had the plaintiff been in a position to earn
the monies represented by the award for lost earning
capacity, she would have had to spend a portion of them
for living expenses. Not to recognize this is to introduce
an element of duplication and to put the plaintiff in a better
-38-
position than she would have been in had she actually
earned the monies in question.”
79. The desirability of avoiding duplication is, generally speaking,
indisputable. But, so far as the “lost years” are concerned, there is no
risk of duplication from the cumulation of an award for loss of earnings
and an award for care. The reasoning in Watkins v Olafson might
therefore have suggested that no deduction for basic necessities should
be made from the loss of earnings figure for that period. But the court
adopts a significantly different rationale and holds that a deduction for
basic necessities should indeed be made for the “lost years” because the
injured person could not have made the earnings which she claims
without spending some of them on those basic necessities. When
considering the passage, it should, however, be noted that the Supreme
Court envisages the deduction of only basic necessities even in claims
for “lost years”. By contrast, in Lim Poh Choo [1980] AC 174, 191D-F,
Lord Scarman considered that hypothetical discretionary expenditure by
the plaintiff would also have to be deducted in calculating the loss of
earnings during the “lost years”. The thinking underlying the two
approaches is actually very different and the Supreme Court’s reasoning
cannot be easily reconciled with the approach which the House adopted
in Lim Poh Choo.
80. Despite this, Mr Burnett argued that the approach of the Supreme
Court was really just a development of Lord Griffiths’ indication in
Dews that necessary expenses such as substantial travel costs should be
deducted from an award for loss of earnings. There is, of course,
nothing to show that the assessor had this particular rationale in mind.
But, even leaving that aside and also leaving aside the difference in the
measure of the deduction permitted by the two systems in “lost years”
awards, the development appears to me to cross an important line. The
travel costs to which Lord Griffiths was referring are costs which the
self-employed businessman incurs only in order to work and earn his
income. But people eat to live: they don’t eat to work. So, like
everyone else, even such businessmen incur basic living expenses
simply in order to live. When they are not working, they still have to
incur those expenses. For good reason, therefore, by contrast with the
Canadian courts, even in care cases such as Lim Poh Choo, the courts in
this country have respected the important policy that a defendant has no
concern with how a claimant spends his earnings during his lifetime. At
common law they have accordingly deducted basic living costs only as
part of the larger deduction for prospective discretionary expenditure in
the “lost years” when ex hypothesi the claimant is presumed to be dead
-39-
and so the award is regarded as being for the benefit of the claimant’s
estate.
81. Parliament has, however, stepped into the arena by enacting
section 5 of the Administration of Justice Act 1982. The section
provides that:
“any saving to the injured person which is attributable to
his maintenance wholly or partly at public expense in a
hospital, nursing home or other institution shall be set off
against any income lost by him as a result of his injuries.”
This provision – which may, of course, have forestalled a development
in the common law – enshrines a public policy that savings in basic
living expenses attributable to an injured person’s maintenance in a
hospital, nursing home or “other institution” at public expense should be
offset against compensation for loss of income. Mr Burnett did not
suggest that the words “other institution” would be apt, in themselves, to
cover a prison. And indeed both the context and the eiusdem generis
rule would exclude such a construction. His argument was, rather, that
by analogy the savings in basic living costs to the appellants which were
attributable to their maintenance in prison at public expense should be
set off against their compensation for loss of income.
82. In respectful disagreement with your Lordships, I find myself
unable to accept this, or indeed any other, argument in favour of the
deduction. Section 5 is designed to deal with an injured person’s
maintenance while necessarily living in a caring institution for the
purposes of treatment. I am by no means satisfied that Parliament
would ever have envisaged that it would be extended by analogy to
cover a prisoner’s maintenance while unjustifiably detained in a prison
for the purposes of punishment. Indeed, at this point the assessor’s
approach meets what I consider to be an insuperable objection. In the
situation envisaged by Parliament, and indeed in all the situations where
the courts have allowed a deduction for basic living costs, by the time
the supposed saving occurs the defendant has already injured, but is no
longer injuring, the claimant. The wrong is over and done with, even
though its effects remain. Parliament provides that any savings which
then accrue to the injured person, while he is being maintained at public
expense in an institution providing treatment to remove or palliate those
effects, are to be set off against any loss of earnings. By contrast, in the
appellants’ situation the wrong was not over and done with when they
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were being maintained at public expense and the supposed savings
accrued to them. On the contrary, their enforced but unjustified
maintenance in prison at public expense for years on end is the very
worst part of the injury which has been done to them and for which they
are entitled to compensation. The actual infliction of the continuing
wrong and the supposed saving are inextricably linked, just as they
would be in the case of a prolonged kidnapping. That simple fact takes
the appellants’ case beyond the reach of the kinds of policy
considerations which favour offsetting the injured person’s savings
against loss of earnings in the situations envisaged by Parliament and
the courts. To put it no more strongly, justice, reasonableness and
public policy surely dictate that no allowance should be made for socalled
savings which the appellants were supposedly making while they
were actually enduring the appalling wrong for which they are to be
compensated.
83. One further point in conclusion. As I mentioned above at para
67, Mr Burnett accepted that the assessor would not have been entitled
to make a deduction to represent the value of the benefit to the
appellants of being fed, housed and clothed in prison. But he argued, of
course, that this did not mean that the assessor could not set off the
saving to the appellants in the basic living expenses which they would
have had to pay if they had been at liberty and earning an income. Mr
Burnett was right to say that the two approaches are different. In theory.
In reality, they come to much the same thing. If one assumes – which
does not seem unreasonable – that the standard of living of prisoners is
not significantly higher than the minimum standard of living to which
they might aspire if at liberty and working, then the practical effect of
the two approaches is in substance the same. The value of the “benefit”
provided to prisoners such as the appellants would be £y and the saving
to them in not having to provide themselves with the basic necessities of
life outside would also be £y. So it is irrelevant under which of the
heads the assessor deducts £y from the compensation of £x for the
appellants’ loss of earnings. On either approach the appellants receive
£(x-y). It is not hard to see why, either way, the appellants would feel
that in the end they were, in effect, paying for their keep throughout all
those long years when they were wrongly deprived of their liberty and
shut up in prison.
84. For these reasons I would have allowed the appeals on the first
ground.
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LORD CARSWELL
My Lords,
85. I have had the advantage of reading in draft the opinion prepared
by my noble and learned friend Lord Bingham of Cornhill. I entirely
agree with the reasons which he has given on both questions for
dismissing the appeal and wish to add only a very few observations of
my own.
86. The objective of compensation remains the same, whether it be
by way of damages in tort for an injur y sustained by a claimant or
compensation for a loss or deprivation in a case such as the present.
There is, as Lord Reid expressed it in Parry v Cleaver [1970] AC 1, 13
“a universal rule that the plaintiff cannot recover more then he has lost.”
He added the important observation that one must have regard to
realities rather than technicalities. So viewed, the appellants’
proposition in relation to the deduction made for living expenses is
unsustainable and the Court of Appeal were right to affirm the
assessor’s conclusion on this issue. To approach the question as if the
provision of board and lodging in prison should be regarded as a benefit
is inapt and tends to distort consideration of the true issue, which is
determination of the sum properly required to compensate the appellants
for their true loss.
87. On the second question, that of inconsistency between the
percentage deductions from the awards made to the appellants by Lord
Brennan and that made in James Robinson’s case by Sir David Calcutt, I
again agree entirely with the reasons given by Lord Bingham for
rejecting the appellants’ complaint. I would, I think, go further in
questioning the appropriateness of the method of deducting a percentage
across the board to reflect the appellants’ convictions and the
punishment resulting from them. As my noble and learned friend Lord
Scott of Foscote has pointed out, such a deduction is relevant to some
only of the heads of compensation which are properly included in the
sum to be paid. Section 133(4A)(c) of the Criminal Justice Act (inserted
by section 28 of the Criminal Appeal Act 1995) requires the assessor to
have regard to any other convictions of the person and any punishment
resulting from them in assessing “so much of any compensation … as is
attributable to suffering, harm to reputation or similar damage”. I find it
difficult to see how any deduction from non-pecuniary loss can correctly
be made except in respect of those specified heads, to which the factors
-42-
in section 133(4A)(c) are obviously relevant. Indeed, I would expect, as
Lord Bingham said in paragraph 31, that it would be taken into account
at the first stage in assessing the amount to be attributed to those heads,
rather than making a deduction across the board at a later stage. In
supporting the assessor’s decision, accordingly, I do not wish to be
taken to giving my imprimatur to all of his method of calculation.
88. That said, I agree that the inconsistency in the level of deduction
between Robinson’s case and those of the appellants does not vitiate the
assessor’s conclusions. Consistency in the award of damages is a very
desirable feature, just as it is in sentencing criminals – the recognition of
which has produced such valuable works as Kemp & Kemp, The
Quantum of Damages. That is because it is a facet of justice, to both
payer and recipient, that like cases should attract like amounts. But it is
only one facet, and the imperative of consistency may have to yield to
the larger imperative of justice in the particular case, achieving a result
which is proper and fair to the interests of both payer and recipient.
89. I do consider the analogy with disparity in sentences, to which
Lord Bingham and Lord Scott have referred, to be apt and instructive.
As Lord Bingham stated in paragraph 26, a court will, and generally
should, be very slow to impose what it regards as anything other than
the right sentence simply because it or another court has imposed a
“wrong” sentence on a co-defendant. As Hutton LCJ expressed it in the
Northern Ireland Court of Appeal in R v Delaney [1994] NIJB 31, 33-
34:
“The principle served by this approach is that where right
thinking members of the public looking at the respective
sentences would say that something had gone wrong the
court should step in … It should not be supposed,
however, that the court will be prepared to invoke the
principle and make the reduction unless there is a really
marked disparity, for unless that condition is satisfied it
will not regard any sense of grievance felt by an appellant
as having sufficient justification … It is only if a fairminded
and right-thinking person would feel that the
disparity involved some unfairness to the appellant, as
distinct from a possibly rueful feeling that his associate
has been more fortunate in his treatment, that a court
should intervene …”
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Griffiths LJ expressed the principle pithily in R v Large (1981) 3 Cr App
R(S) 80, 83:
“If there be honour among thieves and armed robbers, let
him who has been properly and severely sentenced rejoice
in the good fortune of his companion who has received a
lenient sentence. Let him not complain that he himself has
received a proper sentence.”
90. There was a marked disparity between the deduction made by Sir
David Calcutt in Robinson’s case and those made by Lord Brennan in
respect of the appellants. It is apparent, however, that Lord Brennan
was of the view that the deductions which he made were right and
proper, notwithstanding the disparity, of which he was well aware. It is
equally apparent that he was satisfied that the deductions which he made
were justified and that that made by Sir David was insufficient.
Although Lord Scott considers that that disparity constitutes such
unfairness that the deductions made by Lord Brennan should not stand, I
am unable to share this view. It has not been argued that those
deductions are in themselves excessive, and the focus of the submission
on behalf of the appellants was the disparity with Robinson’s case. In
my opinion it would be wrong for the appellants to be awarde d more
than what the assessor adjudged to be fair and proper amounts and I
would reject this ground of appeal.
LORD BROWN OF EATON-UNDER-HEYWOOD
My Lords,
91. I have had the advantage of reading in draft the opinion of my
noble and learned friend Lord Bingham of Cornhill and gratefully adopt
his exposition of the facts, the legislative framework within which these
disputed assessments were made, and the two issues arising for your
Lordships’ determination on the appeal.
92. Issue 1 concerns the 25% deduction from the appellants’ loss of
earnings claim for “saved living expenses” and it is not difficult to
understand why it has aroused such strong feelings. Here are two men,
incarcerated in prison for many years for crimes they never committed,
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entitled by statute to compensation for that grave miscarriage of justice,
now required, so it is suggested on their behalf, to give credit against
their earning losses for the supposed benefits of being fed, clothed and
housed in prison. If, indeed, this is a correct characterisation of the
deduction—if, in other words, the state is exacting a credit for the cost
of imprisoning them (although not, of course, the full cost, now running
at upwards of £35,000 per annum for each inmate)—their case is
unanswerable and their appeal must succeed. Clearly imprisonment was
no benefit whatever.
93. But is this, on analysis, the true basis of the deduction? Is the
deduction not rather to be explained, as the respondent submits, on a
very different basis? The loss of earnings claims necessarily suppose
that the appellants would have been at liberty to work. Had this been so
they would inevitably have had to keep body and soul together, in short
incur basic living expenses. To award them their loss of earnings
without taking these expenses into account would not reflect that reality
and would, therefore, be to over-compensate them. A claimant’s
expenditure on living expenses is no less a necessary pre-condition of
his ability to earn than his travel expenses in getting to work. The
appellants’ real loss, therefore, can only be their loss of earnings less
any such expenses. So runs the respondent’s argument.
94. How then is this deduction properly to be characterised? Is it a
credit impermissibly claimed by the state as representing the value of
the supposed benefits of being fed, clothed and accommodated in prison
or is it a deduction to reflect the basic expenses of living in freedom?
95. To my mind it is plainly the latter and really there has never been
any question here of attempting to justify the deduction as a credit for
benefits received. But that is not quite the end of the matter. It remains
to decide whether indeed the appellants’ saved living expenses can
properly be deducted from their notional earnings in the calculation of
their real loss—the object being, as Lord Griffiths put it in Dews v
National Coal Board [1988] AC1, 14, to determine “what the plaintiff
has really lost”.
96. The central difficulty in addressing this question is the
artificiality of the concept of a claimant’s real loss. Realistically it could
be argued that the appellants’ loss of earnings claims should be assessed
at nil. They are most unlikely ever to have saved any of their notional
earnings and, in so far as they have been deprived of the benefit of
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having spent them, this loss must be assumed to be reflected in the
award of compensation for their non-pecuniary loss. The non-pecuniary
award is presumably assessed on the basis of the contrast between the
misery of their actual lives in prison and the probable pleasures of their
notional lives at liberty. Life at liberty would not have been much fun
had they not spent their (comparatively modest) putative earnings in
full.
97. The contrary argument, at its most extreme, would be that the
appellants’ real loss is the entirety of their net earning loss. Once tax
had been paid (British Transport Commission v Gourlay [1956] AC
185) and any other direct monetary deductions have been made from the
gross earning figure—most notably any national insurance contributions
(Cooper v Firth Brown Ltd [1963] 1 WLR 418) and any compulsory
pension contributions (Dews v National Coal Board [1988] AC 1)—
the earnings would have been available to spend as the appellants chose.
Of course part of those earnings woul d have been expended on the basic
necessities of life. But the appellants had no less right to determine how
this part should be spent (what to eat, what to wear, where to be housed)
than the rest.
98. The first of those arguments, that the earning loss should be
assessed at nil, is not, let it be clear, one that the respondent advances in
this case. An argument substantially like it, however, appears to have
been advanced (unsuccessfully) in Lim Poh Choo v Camden and
Islington Area Health Authority [1980] AC 174, 177. Logical though it
may appear, it does not reflect the conventional approach taken to
damages assessments. General damages, certainly in personal injury
cases, are simply not designed to compensate for earning losses i.e. to
reflect the benefits to have been expected from spending the lost
earnings.
99. The second argument seems to me to present altogether greater
difficulty. The general principle is that it is of no concern to the
tortfeasor how the claimant might have spent his earnings. That was
why the Court of Appeal in Shearman v Folland [1950] 2 KB 43,
rejected the defendant’s contention that the seven guineas a week paid
by the plaintiff before her accident for board and lodging be set off
against the twelve guineas a week which she spent on post-accident
nursing home fees: “The precise style in which she would probably or
might well have lived is, in our view, a collateral matter, and the two
payments are not in pari materia.” (p 50). The court gave the defendant
credit for only £1 a we ek.
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100. Adopting the same approach in Lim Poh Choo, and setting off the
plaintiff’s living expenses against the future care costs, Lord Scarman
said, at p191:
“It is a simpler, more realistic, calculation and accords
more closely with the general principle of the law that the
courts in assessing compensation for loss are not
concerned either with how the plaintiff would have used
the moneys lost or with how she (or he) will use the
compensation received.”
101. A further statement of the principle is to be found in Lord
Griffiths’ speech in Dews v National Coal Board at p14:
“When a plaintiff is injured and as a result is paid no
wages his immediate real loss is that part of his net
earnings that were available for current expenditure. In
respect of this part of his earnings the object of which is to
provide income available for current expenditure the
tortfeasor is, subject to sums necessarily spent to earn the
income, entitled to no credit for expenditure saved as a
result of the injury; the principle that it is no concern of
the tortfeasor, how the plaintiff chooses to spend his
income applies.”
102. Is the respondent’s contention on the present appeal consistent
with that statement of principle? With some hesitation I have concluded
that it is, provided always that the deduction sought to be made is
confined to the cost of the bare necessities of life. If restricted in this
way (as in Shearman v Folland) to the basic cost of food and shelter, it
seems to me capable of falling within Lord Griffiths’ formulation of
“sums necessarily spent to earn the income”. True, this formulation
appears designed principally to allow for travelling expenses (as
discussed by Lord Griffiths at p 13). To my mind, however, it is apt
also to encompass basic living expenses, the claimant’s ability to earn
being dependent no less on his remaining alive from day to day than on
arriving daily for work.
103. It must be acknowledged that in no other case (except pursuant to
section 5 of the Administration of Justice Act 1982) do saved living
expenses appear ever to have been set off directly against the actual loss
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of earnings claim. In Lim Poh Choo, for example, only the “expenses of
earning the income which has been lost” were set off against the lost
income, the living expenses (“the domestic element”) being set off
against the claim for future cost of care.
104. Lim Poh Choo nevertheless seems to me broadly to support the
approach taken by the assessor in the present case. So too, still more
clearly, does the decision of the Supreme Court of Canada in
Toneguzzo-Norvell v Burnaby Hospital [1994] 1 SCR 114—see
particularly the passages cited from McLachlin J’s judgment under the
heading “The Deduction of 50% for Personal Living Expenses from the
award for Lost Earning Capacity during the ‘lost years’”—at para 20 of
Lord Bingham’s opinion.
105. This approach is consistent too with the public policy which
plainly underlies Parliament’s reversal of the Court of Appeal’s decision
in Daish v Wauton [1972] 2 QB 262 by the enactment of section 5 of
the Administration of Justice Act 1982—the provision that any saving
attributable to an injured person’s maintenance at public expense in a
hospital or similar institution must be set off against his loss of earning
claim. True it is that, to avoid any suggestion here that credit is being
claimed for the appellants’ maintenance at public expense in prison, the
focus of the respondent’s argument is rather upon the appellants’ saving
than their maintenance at public expense. As, however, Lord Bridge of
Harwich observed in Hussain v New Taplow Paper Mills Ltd [1988] 1
AC 514, 527:
“This dichotomy [between the two questions identified by
Lord Reid in Parry v Cleaver [1970] AC 1, 13, namely,
first, what did the plaintiff lose as a result of the accident
i.e. what sums will he no longer receive and, secondly,
what has he in fact received which he would otherwise not
have received], however, must not be allowed to obscure
the rule that prima facie the only recoverable loss is the net
loss.”
106. By the same token that as the result of an accident the claimant
may have received sums for which he must give credit against his
earnings losses, so too he may have been relieved of liabilities for which
likewise he should give credit. Of course, were an injured claimant in
fact to be maintained not at public expense but through the benevolence
of a sympathetic third party, no credit would fall to be given for any
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consequent saving to him. But that is because of the public policy
underlying this particular exception to the basic rule. It cannot avail the
appellants here.
107. In short, I reject both the appellants’ characterisation of this 25%
deduction from their earning losses as the taking of credit for the
supposed benefits of their being fed and housed in prison and I reject too
their contention that it transgresses the principle that it is of no concern
to tortfeasors or to courts assessing damages claims (and by analogy
assessors determining compensation for miscarriages of justice) how the
claimant would have used the moneys lost.
108. Issue 2 concerns the reductions of the (bulk of the) non-pecuniary
loss awards (of 25% in Vincent Hickey’s case, 20% in Michael’s), to
take account of their respective “other convictions . . . and any
punishment resulting from them” as provided for by section 133 (4A)(c)
of the Criminal Appeal Act 1995 as amended.
109. The appellants’ complaint here is again at first blush readily
understandable. These reductions are very substantially greater than the
10% reduction made by the respondent’s predecessor as assessor, Sir
David Calcutt QC, in the case of Mr Robinson, another claimant in the
same miscarriage of justice case, whose record, moreover, was
significantly worse than either of theirs. This looks on the face of it
most unfair and certainly I for my part would have had little hesitation
in striking down the assessment were it not clear, as I believe it is, why
Lord Brennan QC departed from his predecessor’s approach, or, indeed,
if there appeared no good reason for his having done so.
110. The following paragraph (para 5) from the respondent’s
determination in Vincent Hickey’s case is to my mind critical to the
proper understanding of his approach:
“Having regard to the seriousness of these matters and in
particular the robbery at Chapel Hill Farm, I firmly
conclude that the non-pecuniary loss award should be
subject to a deduction of 25%. This I regard as the very
least deduction that can reasonably be made, having regard
to his criminal behaviour.”
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111. There is no question but that the respondent knew full well that
he was applying a far larger percentage deduction than Sir David had
done in Mr Robinson’s case. He was doing so, however, because he did
not think that he could reasonably make any lesser deduction
consistently with his duty under section 133(4A)(c). It necessarily
followed either that he regarded Sir David’s 10% reduction in
Mr Robinson’s case to have been irrationally low or that he was
adopting a different approach from Sir David also with regard to the
initial non-pecuniary loss assessments i.e. the assessments which then
fell to be reduced to take account of the claimants’ criminal records.
112. As Lord Bingham has explained, how precisely the assessor
should approach his task generally under section 133(4A), and more
particularly how he should give effect to para (c), is problematic and
plainly worthy of further consideration. Most sensibly perhaps he
should have regard to the para (c) considerations once and for all when
making the assessment in the first place. But if he chooses to regard
para (c) as a discrete provision requiring a separate, second stage
determination, then logically he should be making his first stage
assessment on the assumption that the claimant had no other convictions
whatever and so was suffering much more both from his wrongful
imprisonment and from loss of reputation. Were such an artificial first
stage assessment to be made in the case of those like these appellants
(let alone Mr Robinson) with significant criminal records, it is hardly
surprising that Lord Brennan brought deductions of at least 20% (in
Michael’s case) and 25% (in Vincent’s) necessary. This seems, I repeat,
a curious and intrinsically unsatisfactory approach to the non-pecuniary
loss assessment. Better far, one might think, that a single overall
assessment be made to take account of all the relevant factors. That,
however, is not presently an issue before the House and the decision is
not impugned on that basis.
113. The fact is that, without knowing precisely how each assessor
approached the first stage of their respective non-pecuniary loss
assessments, it is impossible to say whether or not there is any real
inconsistency between their final awards. The respondent’s deductions
are not in themselves impugned. No basis is accordingly established for
interfering with them.
114. For these reasons together with those given by Lord Bingham I
too would dismiss this appeal.
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