Damages in Tort Law

Tort I (LAWS2131) - Week 11: Damages

Class Overview

  • Lecture 1: An Overview of Damages (20 mins.)

  • Lecture 2: Damages in Personal Injury: The Basics (20 mins.)

  • Break: (10 min.)

  • Lecture 3: Loss of Future Earnings (20 mins.)

  • Lecture 4: Damages After Death (20 mins.)

  • Questions and Answers: (10 mins.)

Lecture 1 - An Overview of Damages

Remedies in Tort

  • Types of Damages:

    • Compensatory Damages

    • Aggravated Damages

    • Nominal Damages (including contemptuous damages)

    • Restitutionary Damages

    • Exemplary Damages

  • Other Remedies:

    • Injunctions: Legal orders requiring or forbidding specific conduct.

    • Declarations: Official statements declaring wrongdoing.

Damage vs. Damages

  • Damage:

    • Definition: Actual harm or loss suffered by the plaintiff due to the infringement of rights.

  • Damages:

    • Definition: Monetary sum awarded by the court to compensate the plaintiff for the violation of their rights.

Compensatory Damages

  • Standard Approach: Based on Livingstone v Rawyards Coal Co (1880) 5 AppCas 25.

  • Lord Blackburn's Statement:

    • Aim: To restore the injured party's position as if the wrong had not occurred.

    • Quote: "…where any injury is to be compensated by damages…you should as nearly as possible get at that sum of money which will put the party who has been injured…in the same position as he would have been if he had not sustained the wrong…"

Restoration or Compensation?

  • Concept of Restoration: True restoration of the plaintiff is often impossible (e.g., irreparable physical injury).

  • Tort Law's Aim: To provide full compensation, putting the plaintiff back in their prior position, as far as money allows.

  • Scott Hershovitz Quote:

    • "…we can never get back where we started…when one person wrongs another, the wrong is part of our history…"

Basic Distinctions: General and Special Damages

  • General Damages:

    • Characteristics: Awarded for non-pecuniary losses, future pecuniary losses; cannot be precisely proven.

    • Includes compensation for injury to feelings and loss of dignity.

  • Special Damages:

    • Definition: Awarded for losses expressed in monetary terms; can be precisely proven.

    • Examples: Medical expenses, loss of income until verdict.

Aggravated Damages

  • Definition: Awarded for additional hurt and loss of dignity due to the defendant's conduct.

  • Applicable Situations:

    • Intentional torts like battery, assault, or false imprisonment.

    • Examples from case law:

    • Chung Lai Ha v Ching Mei Yee [2014] HKEC 96: Awarded for public humiliation.

    • Rowlands v CC of Merseyside [2006] EWCA Civ 1773: Awarded for unlawful arrest and false police testimony.

  • Not Common in Negligence: Aggravated damages are unusual in negligence actions due to their punitive nature.

Exemplary Damages

  • Legal Framework: Follow the English approach per Rookes v Barnard [1964] AC 1129.

  • Conditions for Exemplary Damages:

    • Oppressive or unconstitutional actions by government servants.

    • Cases where profit from wrongdoing exceeds compensation.

    • Instances where statutory provisions explicitly allow such damages.

  • Characteristics:

    • Considered a last resort and calculated with moderation, rarely pledged in negligence cases.

Aggravated and Exemplary Damages

  • Distinction: Clear in theory but blurred in practice due to:

    1. Both depend on exceptional conduct by the defendant.

    2. Assessment considers conduct from both parties.

  • Scholarly Views: Some argue aggravated damages are punitive rather than compensatory; Law Commission suggests amalgamation with compensatory damages.

Nominal Damages

  • Circumstances for Award:

    • Available when the tort is actionable per se (e.g., trespass, defamation).

    • Awarded if the plaintiff wins but suffered no compensable loss.

  • Purpose: To vindicate the plaintiff's rights—akin to a declaration of wrongdoing.

  • Limitations in Negligence: Not available in negligence actions due to the need for a compensable loss.

Special Damages

  • Pleading Requirements: Must be pleaded and proven.

  • Applicable Rules: Causation (factual and legal) and remoteness apply to each claim of special damages.

  • Common in: Tort actions, especially negligence claims.

Lecture 2 - Damages for Personal Injury: The Basics

Basic Principles of Personal Injury Damages

  • Indemnity Principle: Full compensation principle—the aim is to restore the plaintiff as closely to their position prior to the injury as possible.

  • Lump Sum Award: Damages are assessed and awarded as a one-time payment, not subject to future adjustment.

  • Relevance of Usage: The way a plaintiff uses the award is irrelevant in determining the amount awarded.

  • Burden of Proof: On the plaintiff to establish the extent of loss suffered.

  • Itemization of Damages: Award components ('heads of damage') should be clearly itemized in pleadings to avoid disputes.

Pecuniary vs. Non-Pecuniary Damage

  • Pecuniary Losses: Financial losses resulting from the tort, including diminished earning capacity and increased medical care needs.

  • Non-Pecuniary Losses: Non-financial losses, such as pain and suffering, loss of amenity, and loss of expectation of life.

Items of Loss in Personal Injury Claims

  • Common Items Include:

    • Medical and other expenses

    • Loss of earnings until the judgment date

    • Loss of future earnings

    • Property damage

    • Pain, suffering, and loss of enjoyment of life.

Losing the ‘Lost Years’

  • Common Law Position: Previously, plaintiffs could claim damages for 'loss of expectation of life'.

  • Current Hong Kong Law: Section 20A of the Law Amendment and Reform (Consolidation) Ordinance abolishes this head of damages, although awards for loss of earnings during 'lost years' remain for dependents.

The Lump Sum Principle

  • One-Time Assessment: Damages for personal injury are irrevocably assessed as a lump sum.

  • Present Value Consideration: Award must reflect present value of prospective losses, including future earnings and expenses.

  • Law Reform Commission Recommendation: Suggested 'periodic payment orders' for personal injury cases, but not yet adopted by the Legislative Council (LegCo).

Medical and Other Expenses

  • Scope: Includes costs for doctors, hospitals, medication, rehabilitation, care, and assisted accommodation.

  • Recoverability Condition: Recoverable if necessary for treating injuries or coping with disabilities.

  • Reasonability Test: Costs must be reasonable relative to health benefits produced (Chan Ka Lim v Chow Wai Kin [2008] 5 HKLRD 881).

Interlude: Lai Chi-Wai's Story
Case: Lai Chi Wai v Tong Hung Kwok [2020] HKCFI 628

  • Background: After an accident, the plaintiff successfully claimed 25% reduction for contributory negligence, for a powered exoskeleton costing HK$993,800.

  • Court Ruling: Award aimed to restore mobility beyond a powered wheelchair, reflecting the principle of maximizing plaintiff’s post-injury quality of life.

Future Medical and Care Expenses

  • Substantial Impacts: Especially in cases of permanent injuries.

  • Multiplier-Multiplicand Approach:

    1. Multiplicand: Expected annual expenses.

    2. Multiplier: Number of years for expected expenses.

    3. Discount Factor: Adjusts for likely investment returns on the award.

Example: Ta Xuong v IOC of Sun Hing Building [1997] 4 HKC 171

  • Case Details: Plaintiff required extensive medical treatment for life due to injury sustained from negligence.

  • Court Decision: Adopted a multiplier of 18 years, granting a total of HK$17 million.

Child Plaintiffs

  • Case: Soh v Inc Owners of Palm Court [2020] HKCFI 2980

  • Judge Ng J's Note: The unique nature of child plaintiffs means evidence for future damages can differ significantly from adults.

    • Children lack a stable background to predict future needs accurately.

    • Courts require expert testimony, even for long-term consequences from judgments.

  • Comparison with Adults: Adult loss assessments are generally less complex due to more stable life patterns.

Break - 10 Minutes

Lecture 3 - Loss of Future Earnings

Overview of Loss of Future Earnings

  • Significance: Often represents the largest claim component in personal injury cases.

  • Calculation Method: Utilizes the same multiplier-multiplicand approach.

    • Estimated Future Loss of Earnings: Multiplied by estimated number of years (minus a discount factor).

  • Considerations for Calculation:

    • Likely promotions for employees.

    • Business developments for self-employed persons.

    • Remaining earning capacity, tax, and MPF investments.

    • Adjusted for 'vicissitudes of life'.

Problem of Uncertain Prospects

  • Speculative Nature: The multiplier-multiplicand approach may not always yield accurate results, specifically for children.

  • Global Approach Example: Chu Man Ting v Kwan Kam Kei [2003] 1 HKLRD 404 demonstrates a broader assessment strategy.

    • However, cases like Li Yuet Yee v Ng Chi Hang [2008] HKEC 1868 adopted more traditional methods.

  • Judicial Position: A global approach can prevent precise insistence from undermining just compensation efforts per ASDA Stores Ltd v Mastercard Inc [2017] EWHC 93 (Comm).

Discount Factor

  • Purpose: Lump sum award allows for potential investment growth until funds are needed.

  • Avoiding Over-Compensation: Discount factor prevents exceeding fair compensation.

  • Current Legal Position: Hong Kong employs varying discount rates based on the duration of future needs.

The ‘Chan Tables’

  • Function: Authoritative actuarial tables assisting with damages calculations.

    • Includes inflationary adjustments, wage statistics, and retail price indices.

Mitigation Duty

  • Definition: Plaintiff's responsibility to minimize losses through reasonable actions.

  • Example: Accepting available employment based on remaining capabilities.

  • Defendant's Burden: Must prove plaintiff's failure to mitigate, which can reduce damage awards drastically.

Loss of Earning Capacity

  • Definition: Additional award covering the risk of future employment loss due to ongoing injury.

  • Considerations: May include minors whose earning potential is uncertain.

Loss of Services

  • Include Damages For:

    • Care provided by family members (Lam Mo Bun v HK Aerosol Co [2001] 1 HKLRD 540).

    • Loss of ability to care for family members (Law Amendment and Reform (Consolidation) Ordinance, Section 20C(4)).

    • Loss of society or companionship (Section 20C(3)).

Case: Chan Yuk v Dragages et Travaux Publics [2000] 3 HKLRD 1

  • Court Ruling: Awarded HK$130,000 for loss of society to a severely disabled plaintiff, suffering profound personal changes due to negligence injuries.

  • Maximum Compensation: Equivalent to bereavement compensation under the Fatal Accidents Ordinance (Cap. 22), currently capped at HK$150,000.

Lecture 4 - Damages After Death

Claims for Damages After Death

  • Legal Framework: Personal injury claims survive the deceased; claims are actionable by the estate under the Law Amendment and Reform (Consolidation) Ordinance (LARCO).

  • Separation of Claims: Distinct from dependent claims for loss caused by the deceased's death (Fatal Accidents Ordinance (Cap. 22)).

The Estate's Rights

  • Estate's Role: Acts in place of the deceased, able to claim benefits that the deceased could have pursued.

  • Example Case: Au Kam Han v Au Kam Ming [2001] HKEC 279 illustrates damages for pain and suffering prior to death post-kidnapping.

Defense Applicable After Death

  • Continuity of Defenses: Defenses available against the deceased also apply against their estate (like contributory negligence).

  • Recovery Limitations: No right to exemplary damages claimed posthumously under LARCO, and loss of earnings post-death is non-recoverable.

The Dependents’ Claims

  • Modified Common Law: Fatal Accidents Ordinance allows dependents to claim damages for bereavement and financial loss.

    • Executor's Role: Claims filed by executor/administrator for dependents' benefit.

  • Establishing Dependency: Claimants must prove they were dependents and suffered losses due to the death.

    • Dependency Defined: Considered any individual financially dependent on the deceased (detailed list in the legislation).

Assessing Dependency

  • Calculation Method: Courts utilize the multiplier-multiplicand approach:

    1. Multiplicand: Expected annual/benefit value to dependents.

    2. Multiplier: Duration of benefit considering the deceased's life expectancy and dependent's needs.

    • Exclude benefits arising from estates (like pension payments) under section 7.

Defenses Against Dependency Claims

  • Applicability of Defenses: Defenses applicable against the deceased, such as contributory negligence and possibly illegality (ex turpi causa), may also apply to claims from dependents.

  • Example Case: Leung Tsang Hung v Tse Yiu Pui [2004] HKEW 565 where deceased's illegal earnings were considered valid in assessing dependency.

Conclusion

  • Thank You for Attending!

  • See You Next Lecture.