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Judgments - Cantwell v. Criminal Injuries Compensation Board (Scotland)


Lord Bingham of Cornhill Lord Steyn Lord Hope of Craighead Lord Hobhouse of Wood-borough Lord Scott of Foscote









ON 5 JULY 2001

[2001] UKHL 36


My Lords,

    1. I have had the advantage of reading in draft the opinion of my noble and learned friend Lord Hope of Craighead. I gratefully adopt, and need not repeat, his most helpful review of the facts and issues in this appeal.

    2. The Criminal Injuries Compensation Scheme 1990 was an extra-statutory scheme for compensating victims of crimes of violence. Its object was to put qualifying victims in the same position financially as they would have been in had they not been injured but not to make them better off. Paragraph 12 of the scheme provided for the assessment of compensation on the basis of common law damages (subject to the other provisions of the scheme), and common law damages for personal injuries are intended to compensate, not enrich. On this short ground the decision under appeal appears anomalous. From his normal date of retirement Mr Cantwell lost the retirement pension which (but for his injury) he would have drawn; he gained an ill-health pension which (but for his injury) he would not have drawn. If, as the First Division held, he is to be compensated for loss of his retirement pension after his normal retirement date without giving credit for his ill-health pension received during that period, there being only £1,500 per annum difference between the two, he will be much better off financially than if he had never been injured. This anomaly was fully recognised by the First Division, which described its decision as "inequitable", but the court felt constrained to decide as it did by section 10(a) of the Administration of Justice Act 1982, which Lord Hope has quoted and which, in the court's view, needed amendment.

    3. On a straightforward application of the approach indicated in Parry v Cleaver [1970] AC 1, Mr Cantwell would have been required to give credit for his ill-health pension received after his normal retirement date, since this would have involved an appropriate comparison of pension with pension, like with like. This was the approach adopted by a majority of the Criminal Injuries Compensation Board and upheld by the Lord Ordinary. Since Parry v Cleaver was treated as authoritative in England and Wales and was, as I understand, regarded in Scotland as an accurate reflection of Scots legal principles, this ruling would appear to have been sound in principle and just in its practical outcome.

    4. The issue in Parry v Cleaver, however, concerned the proper treatment of a police officer's ill-health pension received before his normal date of retirement, and it was ruled that no account should be taken of this in calculating his loss up to that date. That is not a result for which either party to this appeal contends. The Board ruled in the present case that in calculating Mr Cantwell's loss until his date of normal retirement there should be deducted one half of the value of the ill-health pension he had received up to that time. That decision was not challenged by either party before the Lord Ordinary, the First Division or the House. It was plainly based on paragraph 20 of the scheme, which Lord Hope has quoted. That paragraph did indeed provide for the deduction of half of any taxable "pension accruing as a result of the injury". The parties are agreed that this description covered Mr Cantwell's ill-health pension received up to his normal retirement date. It might be thought to cover Mr Cantwell's ill-health pension received after his date of normal retirement also since paragraph 20 drew no distinction between pensions received before and after the applicant's date of normal retirement. The contention that paragraph 20 governed Mr Cantwell's entitlement after as well as before his date of normal retirement was however rejected by a majority of the Board, the Lord Ordinary and the First Division, and has not been repeated in the House. It is accordingly not open to review. But one can understand why a minority of the Board saw logical force in this contention.

    5. Although the First Division reluctantly treated section 10 of the 1982 Act as determinative of the appeal to it, this section was not mentioned by the Board in its judgment and the Lord Ordinary agreed with the submission on behalf of the Board that

    "there is no sound reason whatsoever for concluding that the effect of Section 10 of the 1982 Act is to alter the common law position in Scotland to the effect contended for by [Mr Cantwell]."

If, as I understand, Parry v Cleaver was or would have been accepted as accurately reflecting the principles of the Scots common law, and if section 10(a) did not alter the Scots common law, one is bound to wonder why the provision was enacted at all and why it was enacted in terms which led the First Division to put upon it the construction which, not to my mind surprisingly, it did. The best efforts of counsel have done little to dispel this mystery. The report of the Scottish Law Commission to which Lord Hope refers gives no hint of an intention to depart from Parry v Cleaver, but nor does it identify any omission or anomaly which section 10(a) could have been intended to address. If section 10(a) was enacted for the avoidance of doubt it has not proved notably successful.

    6. It seems clear from references which Lord Hope has given that in the period of nearly twenty years since section 10(a) was enacted it has not been understood to have the effect which the First Division has given to it in this case. Yet many claims relating to pension loss after the date of normal retirement must have been disposed of during that period, presumably according to conventional Parry v Cleaver principles. Lord Hope has shown how section 10(a) may be read conformably with those principles. Since those principles, when applied to the post-normal retirement period, yield what is to my mind a just result, and since no reason has been shown why section 10(a) should have been intended to yield a different result in a case such as this, I am happy to concur in making the order which Lord Hope proposes.


My Lords,

    7. I have had the advantage of reading in draft the speeches of my noble and learned friends Lord Bingham of Cornhill, Lord Hope of Craighead and Lord Hobhouse of Woodborough. For the reasons they have given I would also make the order which is proposed.


My Lords,

    8. This case raises a short but important point relating to the calculation of the amount of damages for personal injury. Although it takes the form of a dispute between the injured party and the Criminal Injuries Compensation Board as to whether compensation is available to the injured party under a scheme for compensation which is administered by the Board, the case is of much wider interest. This is because the decision which your Lordships are being asked to take will affect the calculation of damages for personal injury in all cases on similar facts in the ordinary courts in Scotland.

    9. On 21 May 1992 the respondent Ian Cantwell was assaulted in the course of his duty as a police officer. The injuries which he sustained were such that on 1 June 1993 he had to retire on medical grounds from the police force. In normal course he would not have retired until 16 April 1996. On taking early retirement he became entitled to an ill-health pension under the Police Pensions Regulations 1987 (SI 1987/257), as amended by further regulations in 1990 (SI 1990/805) and 1996 (SI 1996/867). He commuted part of that pension into a lump sum. The remainder took the form of a continuing annual pension, which is taxable. But he lost his entitlement under the 1987 Regulations to a retirement pension on reaching his normal retirement age. Their Lordships were told that in round figures the sum which the respondent has received since his retirement date by way of ill-health pension is £13,700 per annum. If he had continued in service to his normal retirement age he would have received a retirement pension of £15,200. It should be noted that, although the two pensions are distinguished from each other in the 1987 Regulations by means of a different adjective, they are both pensions and they are both products of the same scheme.

    10. The respondent applied for compensation to the Criminal Injuries Compensation Board. The function of the Board is to decide what compensation should be paid to the victims of crimes of violence under a scheme known as the Criminal Injuries Compensation Scheme. The Scheme has now been superseded by new arrangements, and it is in the course of being wound up. But the Board continues to deal with applications which were lodged under the Scheme, and the respondent's application falls into that category. Paragraph 5 of the Scheme provides that compensation will not be payable unless the Board are satisfied that the injury was one for which the total amount of compensation payable after deduction of social security benefits, but before any other deductions under the Scheme, would not be less that the minimum amount of compensation, which shall be £1,000. Paragraph 12 states that, subject to the other provisions of the Scheme, compensation will be assessed on the basis of common law damages.

    11. The respondent's application for compensation was refused by a single member of the Board, Mr Crawford Lindsay QC, on 28 September 1995 on the ground that, taking account of the benefits, past and future, which would have to be deducted under the Scheme, the sum which the respondent would be awarded was below £1,000. The respondent applied for a hearing, which took place in Glasgow before five members under the chairmanship of the Chairman of the Board, Lord Carlisle of Bucklow QC. On 17 July 1997 the Board issued a judgment in which the decision of the single member was confirmed.

    12. The proper treatment of the respondent's claim for loss of pension was the critical issue which the Board had to decide. Paragraph 20 of the Scheme provides:

    "Where the victim is alive compensation will be reduced to take account of any pension accruing as a result of the injury. Where the victim has died in consequence of the injury, and any pension is payable for the benefit of the person to whom the award is made as a result of the death of the victim, the compensation will similarly be reduced to take account of the value of that pension. Where such pensions are taxable, one-half of their value will be deducted; where they are not taxable, eg where a lump sum payment not subject to income tax is made, they will be deducted in full. For the purposes of this paragraph 'pension' means any payment payable as a result of the injury or death, in pursuance of pension or other rights whatsoever connected with the victim's employment, and includes any gratuity of that kind and similar benefits payable under insurance policies paid for by employers. Pension rights accruing solely as a result of payments by the victim or a dependent will be disregarded."

    13. It was common ground that the respondent's ill-health pension under the Police Pensions Regulations is a "pension" within the meaning of paragraph 20 of the Scheme. It appears that under these Regulations there is no pension fund as such. But was accepted that the pension payments to which police officers are entitled under the Regulations are not of such a kind that they were to be regarded as accruing solely as a result of payments by the victim. It was agreed that the case is to be treated in the same way as if there had been a fund to which the respondent contributed and the remainder necessary to pay the benefits had been paid by the police authority. So the ill-health pension is not excluded from the ambit of the Scheme by the last sentence of paragraph 20. The respondent paid weekly contributions to the police authority. The amount of the pension which he received was related to the total amount of the contributions paid by him during his period of service.

    14. The decision of 17 July 1997 was a majority decision, as appears from the last three paragraphs of the judgment in which the Board said:

    "For the reasons that we have given, we believe the policy followed by the Criminal Injuries Compensation Board of deducting half of any ill-health pension up to the date of occupational retirement and thereafter deducting the net amount of pension in full from the net amount of pension otherwise payable is correct. It follows, therefore, that any application for a hearing against the decision of Mr Crawford Lindsay in this case should proceed on the basis that the benefits should be deducted from any award of compensation in accordance with the principles of this judgement.

    Since this is an important matter of interpretation of the Scheme, it is right to note that the five member Board was not unanimous on the matter of the deduction of the full value of the pension during the post-retirement period.

    The minority were of the view that on a proper construction of paragraph 20 of the Scheme the deduction of only one half of the ill-health pension is not restricted to the pre-retirement period but applies also to the post-retirement period."

    15. It is not disputed that, if the majority view is correct, the sum which the respondent would have been awarded under the Scheme would have been less than the minimum award of £1,000. But the respondent was not content with this decision. He presented a petition for judicial review to the Court of Session in which he sought reduction of the decision of the single member and the decision of the Board by which the decision of the single member was confirmed. On 28 July 1998 the Lord Ordinary (Lord Milligan) refused the prayer of the petition. On 9 February the First Division (the Lord President (Rodger), Lord Coulsfield and Lord Cowie) allowed the respondent's reclaiming motion, reduced the decision of the Board and remitted the respondent's application to the Board for reconsideration: 2000 SC 407.

The issue

    16. As Mr Campbell QC for the appellants said in his opening remarks, the question in this appeal relates to the characterisation of a claim for loss of pension. The respondent's claim for compensation included as one of its elements a claim that he had been denied the opportunity of increasing his pension entitlement by continuing to work until he reached the normal retirement age. The question is whether, in assessing the amount to be paid for this part of his claim of damages, account should be taken of the amount of the ill-health pension payments which he has received and will continue to receive after reaching that age.

    17. The Lord Ordinary said that in his view there was much to be said for the view that, taking the words of paragraph 20 of the Scheme according to their plain and ordinary meaning, any deduction in respect of the respondent's pension benefits for the period following normal retirement age should be in respect only of one half of the value of those benefits. But he found what he considered to be sound reasons for construing the relevant sentence of that paragraph as applying only where the common law basis of assessment did not already provide for deduction of those benefits in full. He also rejected an argument which had not been put to the Board that the effect of section 10(a) of the Administration of Justice Act 1982 was that the ill-health pension should be left out of account altogether in assessing the amount of the respondent's claim.

    18. The opinion of the First Division was delivered by Lord Coulsfield. He dealt first with the relevant provisions of the Scheme. He said that the court were of the opinion that the correct view was that they were designed to regulate the position before normal retirement, and that they agreed with the Board and the Lord Ordinary on this point: p 717B-C. He then proceeded to consider the wording of section 10 of the Administration of Justice Act 1982. He noted what was said in Parry v Cleaver [1970] AC 1 about the proper treatment of pensions for the period of retirement in English law, and the argument that a comparison of an ill-health pension with a retirement pension was a comparison of like with like which showed that a deduction could properly be made in assessing post-retirement loss. But he concluded that section 10(a) of the Act excludes any deduction in respect of a contractual benefit such as the benefit in issue in this case, whether that benefit relates to a period before or after normal retirement date: p 418A-B. He said that the court had considered very carefully whether any other meaning could properly be given to the statutory words which would lead to a different result, but that it had been unable to do so: p 418C.

    19. It is clear from Lord Coulsfield's concluding remarks that the court reached its decision with reluctance, as it was well aware that the result was in conflict with the position in England and that it was inequitable. The issue in this appeal is whether that decision was inevitable. If another solution to the problem of interpretation can be found which produces a result which is equitable and in accordance with principle, it should of course be adopted. It should be noted however that the respondent did not seek to challenge the court's decision that the provisions of paragraph 20 of the Scheme were designed to regulate the position before the retirement date and that they did not relate to the calculation of pension loss after that date.

    20. Section 10 of the Administration of Justice Act 1982, as amended by the Jobseekers Act 1995 and the Employment Rights Act 1996, provides:

    "Subject to any agreement to the contrary, in assessing the amount of damages payable to the injured person in respect of personal injuries there shall not be taken into account so as to reduce that amount -

    (a) any contractual pension or benefit (including any payment by a friendly society or trade union);

    (b) any pension or retirement benefit payable from public funds other than any pension or benefit to which section 2(1) of the Law Reform (Personal Injuries) Act 1948 applies;

    (c) any benefit payable from public funds, in respect of any period after the date of the award of damages, designed to secure to the injured person or any relative of his a minimum level of subsistence;

    (d) any redundancy payment under the Employment Rights Act 1996, or any payment made in circumstances corresponding to those in which a right to a redundancy payment would have accrued if section 135 of that Act had applied;

    (e) any payment made to the injured person or to any relative of his by the injured person's employer following upon the injuries in question where the recipient is under an obligation to reimburse the employer in the event of damages being recovered in respect of those injuries;

    (f) subject to paragraph (iv) below, any payment of a benevolent character made to the injured person or to any relative of his by any person following upon the injuries in question;

    but there shall be taken into account -

    (i) any remuneration or earnings from employment;

    (ii) any contribution-based jobseeker's allowance (payable under the Jobseekers Act 1995);

    (iii) any benefit referred to in paragraph (c) above payable in respect of any period prior to the date of the award of damages;

    (iv) any payment of a benevolent character made to the injured person or to any relative of his by the responsible person following on the injuries in question, where such a payment is made directly and not through a trust or other fund from which the injured person or his relatives have benefited or may benefit."

    21. The 1982 Act followed a report of the Scottish Law Commission on the "Admissibility of Claims for Services and Admissible Deductions" in damages for personal injuries: Scot Law Com No 51 (1978). A draft bill was appended to that report. Part II of the 1982 Act, which deals with damages for personal injuries in Scotland, is based almost entirely on the wording of the draft bill. In paragraph 4 of its report the Scottish Law Commission said that their concern had been to identify what anomalies or uncertainties exist within the present framework of law relating to damages for personal injuries. In paragraph 5 they said that in their review of this branch of the law they had sought, among other things:

    "(a) to take account of the general principles of Scots law relating to delictual liability, and to suggest departures from those principles only where required to meet a practical need;

    (c) to ensure that the compensation will be such that, so far as practicable, the injured person will be placed in the same position as he would have been if he had not sustained the injuries, and not in a position either more or less financially beneficial."

In paragraph 47 they said that in their approach to the problem of deductions they had taken for granted the general principle of the Scots law of reparation that damages are intended to be compensatory. In the light of this background it is appropriate first to consider how the common law stood as regards the question of post-retirement pension loss before dealing with the problem as to how section 10 of the 1982 Act should be interpreted.

The common law prior to the 1982 Act

    22. The guiding principle in Scots Law, as the Scottish Law Commission observed in their report, is that damages for personal injury are intended to be compensatory. The principle is that the compensation which the injured party receives by way of the sum of money as damages should as nearly as possible put him in the same position as he would have been in if he had not sustained the wrong for which he is to be compensated: per Lord Blackburn in Livingstone v Rawyards Coal Co (1880) 7 R (HL) 1, 7. The compensatory approach requires like to be compared with like. The nature of the loss for which the injured party seeks to be compensated must be identified. If it can be shown that he has received, or will receive, a benefit which is of same as that which he has lost, that benefit must be set off against the loss. If this is not done, the injured party will be placed in a better position financially than he was before the accident. As I said in Longden v British Coal Corporation [1998] AC 653, 665A the issue of deductibility where the claim is for loss of pension cannot be properly answered without a clear understanding of the nature of the loss claimed.

    23. In some cases, as Windeyer J in Paff v Speed (1961) 105 CLR 549, 567 explained in a passage which was quoted in Parry v Cleaver [1970] AC 1, 41 by Lord Wilberforce, it will be sufficient for the defender simply to call evidence which contradicts the case the pursuer seeks to establish. He may be able to show, in answer to a claim for loss of pension, that the pursuer has in fact a pension. Or he may be able to show, in answer to a claim for medical expenses, that he received the medical treatment in question free of charge. In other cases the benefit received may be so closely related in kind to that which is lost that the same result must follow if the injured party is not to be overcompensated. The typical case is that of loss of wages. A claim that the injured party has lost wages because his employment was terminated as a result of the accident may be met by evidence that he has returned to employment elsewhere from which he has in fact been receiving wages. In each case, as Windeyer J said, the first consideration is the nature of the loss or damage that the pursuer says he has suffered. On this approach it would seem to be clear that, where the claim is for loss of pension and that it relates to a period during which that lost pension would otherwise have been payable, account should be taken of a pension which is payable to the injured party for the same period.

    24. In Parry v Cleaver [1970] AC 1 the plaintiff, like the respondent in the present case, was in pensionable employment as a police officer. He was disabled from continuing in that employment as a result of the defendant's negligence. He lost the wages which he would actually received until his retirement from the police force. He also lost the opportunity, by continuing to serve and make his contributions under the pension scheme, to obtain his full retirement pension when he reached his retirement age. On the other hand he obtained employment as a clerk from which he gained wages which were admittedly to be set off against the wages which he lost. He also became entitled for the rest of his life to an ill-health pension, but this pension was lower than it would have been if he had continued in the police force until the retirement age.

    25. The main question in the case was whether the ill-health pension was to brought into account in the assessment of his damages. Lord Reid said at p 13 that it was necessary to begin by considering general principles:

    "Two questions can arise. First, what did the plaintiff lose as a result of the accident? What are the sums which he would have received but for the accident but which by reason of the accident he can no longer get? And secondly, what are the sums which he did in fact receive as a result of the accident but which he would not have received if there had been no accident? And then the question arises whether the latter sums must be deducted from the former in assessing the damages."

    26. He then drew a distinction, as regards the ill-health pension, between the position up to the retiring age from the police force and the position after the retiring age. He held that the ill-heath pension had to be left out of account for the period up to the retiring age. But he noted that there was no dispute that the ill-health pension had to be brought into account in order to calculate the loss for the latter period. Lord Reid explained the reason for this difference of treatment at p 20-21:

    "It has been asked why his ill-health pension is to be brought into account at this point if not brought into account for the earlier period. The answer is that in the earlier period we are not comparing like with like. He lost wages but he gained something different in kind, a pension. But with regard to the period after retirement we are comparing like with like. Both the ill-health pension and the full retirement pension are the products of the same insurance scheme; his loss in the later period is caused by his having been deprived of the opportunity to continue in insurance so as to swell the ultimate product of that insurance from an ill-health to a retirement pension. There is no question as regards that period of a loss of one kind and a gain of a different kind."