Wells v Wells [1996] EWCA Civ 784 (23rd October, 1996)

Wells v Wells [1996] EWCA Civ 784 (23rd October, 1996)

The court held that, while the conventional 4-5% discount rate has been long established, the emergence of ILGS and the recommendations of the Ogden Working Party and Law Commission provide a more precise and just method for assessing future pecuniary loss. The court accepted that damages should be calculated on the basis of the return from ILGS, as this reflects a risk-free investment and better achieves the objective of full compensation without over- or under-compensation. The court rejected the argument that plaintiffs should be assumed to invest in equities and take investment risks.

Citation
[1996] EWCA Civ 784
Parties
Respondent/plaintiff: Margaret Thelma Wells (Suing by her daughter and Next Friend Susan Smith); Appellant/defendant: Derek Sydney Wells; Respondent/plaintiff: James Oliver Thomas; Appellant/defendant: Brighton Health Authority; Respondent/plaintiff: Kelvin Page; Appellant/defendant: Sheerness Steel Company Limited
Jurisdiction
England and Wales
Procedural Posture
Appeal (civil) / Court of Appeal Judgment on Quantum of Damages
Outcome
Appeals dismissed; quantum of damages affirmed using ILGS-based multipliers.
Legal Topics
Assessment of Damages, Future Pecuniary Loss, Multipliers and Discount Rates, Investment of Damages, Index Linked Government Securities (ilgs), Ogden Tables, Law Commission Recommendations
Personal Injury Damages Tort Law Assessment of Damages Future Pecuniary Loss Multipliers and Discount Rates Investment of Damages Index Linked Government Securities (ilgs) +2 more

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Parties

Margaret Thelma Wells (Suing by her daughter and Next Friend Susan Smith)

Respondent/plaintiff

Derek Sydney Wells

Appellant/defendant

James Oliver Thomas

Respondent/plaintiff

Brighton Health Authority

Appellant/defendant

Kelvin Page

Respondent/plaintiff

Sheerness Steel Company Limited

Appellant/defendant

Procedural Posture

Appeal (civil) / Court of Appeal Judgment on Quantum of Damages

Legal Issues

  1. 1 What is the appropriate discount rate/multiplier for assessing damages for future pecuniary loss in personal injury cases?
  2. 2 Should the court depart from the conventional 4-5% discount rate and instead use the rate of return on Index Linked Government Securities (ILGS)?

Ratio Decidendi

The court held that, while the conventional 4-5% discount rate has been long established, the emergence of ILGS and the recommendations of the Ogden Working Party and Law Commission provide a more precise and just method for assessing future pecuniary loss. The court accepted that damages should be calculated on the basis of the return from ILGS, as this reflects a risk-free investment and better achieves the objective of full compensation without over- or under-compensation. The court rejected the argument that plaintiffs should be assumed to invest in equities and take investment risks.

Court Disposition

Appeals dismissed; quantum of damages affirmed using ILGS-based multipliers.

Orders

  • Damages to be assessed using multipliers based on the rate of return from Index Linked Government Securities (ILGS).
  • No adjustment to the quantum of damages awarded by the trial judges.