HL Deb 22 April 1971 vol 317 cc785-98

3.30 p.m.


My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(Lord Balerno.)

On Question, Motion agreed to.

House in Committee accordingly.

[The EARL OF LISTOWIEL in the Chair.]

Clause 1 [Extension of power of courts to grant interest on damages]:

LORD WHEATLEYmoved Amendment No. 1:

Page 1, line 25, after ("appropriate") insert ("even if those damages or such part of them have not been liquidated").

The noble and learned Lord said: I beg to move the first Amendment on the Marshalled List. This Amendment and the following Amendments are designed not to emasculate the Bill but to strengthen it. I approve of the purposes underlying the Bill, but I am doubtful whether it effectively achieves some of those purposes, and it may have overlooked some practical considerations. A problem which arises from time to time is that the courts are constrained to place a construction on an Act of Parliament different from the intendment of Parliament when the Bill was before it. Accordingly, it seems to me axiomatic that, if any doubts can be discerned in a Bill, it is a function of Parliament, so far as possible, to eliminate those doubts before the Bill passes from the legislative Chambers.

Subsection (1) extends the terminus from which interest may be awarded back beyond the former limit imposed by the Act of 1958; namely, the date of the commencement of the action, to the date when the right of action arose. It is a permissive power given to the court, which can award interest on the whole, or only part, of the total sum awarded, for the whole, or any part, of the period starting from the date when the right of action arose, and at such rate, or differing rates, of interest as the court may specify. This subsection applies to all actions for damages; for example, it would extend to actions for breach of contract as well as actions for damages for personal injuries. In view of the permissive and selective power conferred on the court, the test for a discriminatory decision, having regard to the qualifying conditions of the clause, will obviously be appropriateness in the particular circumstances of the individual case.

Subsection (1A) deals only with damages in respect of personal injuries and it first makes the power to award interest on such damages mandatory. But the subsection proceeds to qualify that mandatory provision in two respects. In the first place, it ceases to be mandatory since interest will only be given if the court is of the opinion that it is appropriate that interest should be awarded on the whole, or part, of the damages. Secondly, the award of interest can be withdrawn if the court is satisfied that there are special reasons for so doing.

In such damages there may be broadly four heads: out of pocket expenses; loss of wages, or wage-earning capacity, up to the date of proof or trial; loss of wages, or wage-earning capacity, subsequent to the proof or trial; and what we call "solatium"—that is, compensation for pain and suffering, and loss of amenities. In a jury trial it is virtually impossible to differentiate between these constituent elements because the total sum awarded by a jury does not make such a differentiation, and accordingly the constituent elements are not quantified. The evidence may in some cases give a clue to some of these constituent elements but not all. In particular, the amount attributed to solatium, and the amount attributed to loss of future earnings, or future wage-earning capacity, cannot be identified. On the other hand, in a proof before a judge without a jury, it would be possible for the judge to define the awards in respect of these different constituent elements, even to the extent, if need be, of dividing up solatium where that was appropriate.

It is the use of the qualifying phrase, "as the court considers appropriate", and the other phrase, "unless the court is satisfied that there are special reasons", which give rise, in my mind, to some doubt. "Appropriate" may he appropriate in fact or appropriate in law. Appropriate in fact may mean that it is ascertainable and has been ascertained. It would not, for instance, in my view, be appropriate to grant an award of interest in respect of future wage loss, because that is a loss that, at the date of the decree had not yet been ascertained. But it might be appropriate to make an award of interest on past ascertainable loss of wages on the principle that the pursuer has been out of pocket on sums of money to which he was previously entitled.

On the other side of the coin, appropriate in law may mean that interest should be awarded only on those elements which the principles of law entitle interest to be awarded upon. At common law that was when the element of damages concerned had been ascertained and liquidated. It may be said—and it may well be right—that the provisions of subsection (1) supersede that common law principle. The same might have been said about Section 1(1) of the 1958 Act, which this Bill seeks to amend, because although that subsection was differently phrased, extension anterior to the date of decree when the damages were liquidated was permitted in appropriate cases by that Act. Nevertheless, in the case of Macrae v. Reed and Mallik, decided in 1961 following upon the passing of the 1958 Act, one of the reasons given for not awarding interest on solatium was that solatium was not a surrogatum for monetary loss and money wrongfully withheld—the principle at common law on which interest is normally awarded.

As I understand the position, one of the purposes of this Bill is to get round such a restrictive interpretation as the court applied to the 1958 Act. It is because I am not certain that subsection (1A) does this that I have tabled this Amendment. And I am not certain that the arguments which prevailed against the wider application of the 1958 Act might not succeed against this Bill, if it became an Act in its present form. If there is a doubt, and it can be removed, then I feel it is our duty at this stage to remove it, and not leave it to the decision of the court, which cannot be forecast. It may be that the terms of my Amendment are not habile to effect this purpose. If there be doubt about this, I shall be quite happy to leave it to the expert draftsmen to see whether there is a way out and whether an appropriate formula can be devised, so that it can be incorporated at a later stage of the Bill. In the meantime, I beg to move.

3.40 p.m.


I have consulted my noble friend the Minister of State and her advisers about this and other Amendments tabled by the noble and learned Lord. We are indeed very conscious of the points which he made on Second Reading, and we most sincerely appreciate his desire to make the Bill a more perfect instrument. For the reasons stated in the Second Reading debate by my noble friend Lady Tweedsmuir of Belhelvie, the Bill is much more definite than the 1958 Act, in that in the normal case the powers given by it are to be exercised by the courts unless there are special reasons to the contrary. What is questioned by the noble and learned Lord in tabling the Amendment is the extent of those powers and, in particular, the discretion which goes with those powers. As a complete layman in regard to the law, my own personal predilection is for a measure of flexibility in the application of the law to the very varied types of human problems arising from an award for damages.

We are dealing here solely with interest on damages, the length of the period for which it should be given and the rate of the interest. I appreciate the fear of the noble and learned Lord, that this discretion may be used to invoke old rules which are now inappropriate as grounds for limiting or excluding the award of interest on certain elements of damages, particularly on the element of solatium, which I was informed yesterday is compensation for pain and suffering. Under the 1958 Act, a judgment was made that solatium should never be awarded from a date earlier than that of decree, as the noble and learned Lord has said. The 1958 Act indicated that only if circumstances warranted should interest be awarded on any element of damages. The present Bill indicates—and, to my mind, indicates beyond peradventure—that interest on solatium must be awarded from the date of the right of action, unless there are good causes to the contrary. Assuming that, despite this Bill, the court might hold it inappropriate in principle to award interest on an element of solatium, I am advised that the present Amendment is not adequate to allow such interest and, further, that as this Amendment is only to subsection (1A) it may, by contrast, restrict undesirably the scope of the powers in subsection (1).

For these reasons, among others, I cannot accept the Amendment now proposed. Bat if the noble and learned Lord will agree to withdraw it, I shall undertake to consider further with my noble friend before the Report stage the problems raised by the Amendment and, if so advised, to table any Amendment which seems appropriate. But in considering the possibility of such an Amendment, I remind the noble Lord that this is a Private Member's Bill supported by all Parties in another place. I am advised that, unless it can return expeditiously to the place from whence it came, it will be in grave jeopardy. It is interesting that your Lordships have before you at the present moment two Private Members' Bills concerning damages. The other is the Law Reform (Miscellaneous Provisions) Bill brought forward by the noble and learned Lord, Lord Stow Hill. That also comes from another place agreed, like this Bill, without a Divison and after thorough discussion.

I should like to draw the attention of the noble and learned Lord, Lord Wheatley, to the words of the noble and learned Lord, Lore Gardiner, speaking in support of that other Bill last Tuesday. He said: Those who wish to see this Bill passed into law this Session would obviously be anxious that any unnecessary Amendment should not be put down and I would with respect ask any noble Lord who is thinking of putting down an Amendment to appreciate that if the basis of this Bill, Part II, were to be changed so that there is a conflict between the two Houses at this point of the Session, it is most unlikely that the Bill would become law at all this Session."—[OFFICIAL REPORT, 20/4/71; col. 541.] Further, in the same debate the noble and learned Lord the Lord Chancellor, referring to the statement of the noble and learned Lord, Lord Gardiner, said that the House, …may have the choice between making a botched jab or losing the Bill altogether owing to the exigencies of the Parliamentary timetable. I trust that the noble and learned Lord, Lord Wheatley, will not consider me either vindictive or unfair if I make a further quotation from the speech of the noble and learned Lord the Lord Chan- cellor. It is one of his obiter dicta which so enliven our debates, and is therefore perhaps worth repeating. He said: What is true is that the law is not of the lawyers' creation. The law affected by Part II is the sole product of the labours of Parliament. It is not judge-made law; it is Parliamentary law."—[col. 556.] Again, I ask the noble and learned Lord, Lord Wheatley, not to press his Amendment.

3.49 p.m.


I should like to say briefly, on behalf of the Government, that I have listened with the greatest care to the points put forward by the noble and learned Lord, Lord Wheatley, and also to what I felt was a very convincing reply made by my noble friend Lord Balerno. I quite agree with the noble and learned Lord, Lord Wheatley, that we must try as far as possible to remove doubt in legislation, as he put it; and I think those of us who are interested in this Bill all have, in common, the wish to strengthen it and not to emasculate it. But we also wish to see that, in practice, this Bill is interpreted in a less restrictive way than its predecessor, the 1958 Act, which it seeks to amend.

The noble and learned Lord, Lord Wheatley, said that he felt that perhaps the terms of his Amendment might not be quite perfect, but he gave very cogent arguments in support of it. I put it to him, however, that, after having considered this matter with my noble friend Lord Balerno, we feel that, at present, the Bill covers the less restrictive provisions which he has in mind. If, however, he feels able to withdraw the Amendment this afternoon, we will certainly look at it again to see whether it is either possible or necessary to try to strengthen the Bill in the manner which he has in mind.


May I make four brief points in answer to those which have been made in the last two speeches, for which I thank both the noble Baroness and the noble Lord? In the first place, I want to make it clear that I am not against flexibility in the courts of law. It is a great relief to have flexibility. What I was seeking to do was not to curtail flexibility but to remove uncertainty. I think it is the function of Parliament while giving flexibility to remove uncertainty.

Secondly, with respect to the noble Lord, Lord Balerno, he did not, I think, deal with the problem which I raised arising out of the qualification in the word "appropriate". It is that qualification which gives rise to the doubt in my mind as to whether this Bill in its present form will achieve the purpose it is designed to achieve, and that is a point which I should like those advising the noble Lord and the noble Baroness to pay particular attention to.

The third point is that it was said that this Bill had been given a thorough discussion in another place. It was given a thorough discussion on the matters raised in another place, but the subject I have raised to-day, and the other matters which I propose to raise, were never raised in another place. Therefore, the fact that the Bill received universal acceptance on other matters in another place is no argument against the point which I have raised here. The next and last point is this. On the hypothesis that the Bill is deficient—and it is simply on that hypothesis—is it right that that deficiency should be overlooked? If the test in your Lordships' House, to quote the words of the noble and learned Lord, the Lord Chancellor, is whether we have to accept a botched job or lose the Bill, I should like to think that it was in the traditions of this House that we do not pass a botched job. In the circumstances, however, and in view of the undertaking given, which I realise is quite a qualified undertaking and I accept it as such, I am prepared to withdraw the Amendment.

Amendment, by leave, withdrawn.

3.53 p.m.

LORD WHEATLEYmoved Amendment No. 2: Page 2, line 1, leave out ("special reasons") and insert ("reasons special to the case").

The noble and learned Lord said: As subsection (1A) of the Bill is phrased "special reasons" might be interpreted as special reasons in law, with the difficulties which I have already outlined in relation to the previous Amendment. At the Second Reading, the noble Baroness, Lady Tweedsmuir, indicated that "special reasons" meant "reasons special to the particular case". If that is what is intended, then in my submission that is what should be said, and the matter should not be left open to doubt and the perils of adverse judicial interpretation. I recognise that this phrase, "special reasons", is used in the Road Traffic Acts, but that is in a different context and does not provide a suitable or possibly reliable precedent. For that reason I move the Amendment.


I am inclined to think that the use of the word "special" in this context can only mean "special to the particular case", as circumstances which constitute the special reason must be such as are not generally present in the ordinary or the normal case. Nevertheless, I appreciate the force of the argument presented by the noble and learned Lord, and having discussed the matter with my noble friend Lady Tweedsmuir I am prepared, if the noble and learned Lord will withdraw his Amendment, to discuss the matter further with my noble friend. In the light of the advice we receive we could consider introducing an appropriate Amendment at the Report stage.


Subject again to that undertaking, I am prepared to withdraw this Amendment.

Amendment, by leave, withdrawn.

LORD WHEATLEYmoved Amendment No. 3: Page 2, line 2, at end insert "(1B) Where the Court pronounces an interlocutor decerning for payment by any person of a sum of money as damages in terms of minutes of Tender and Acceptance, the Court may award interest on that sum at such rate and for such period as to it seems just and equitable having regard to all the circumstances of the case. ( ) In section 2 of the said Act of 1958 there shall be inserted at the end "having regard to the provisions of the Interest on Damages (Scotland) Acts 1958 and 1971".

The noble Lord said: There are two parts to this Amendment. They deal with different circumstances and, with your Lordships' permission, I will deal with each in turn. I must apologise for perhaps wearying your Lordships with matters of rather a technical nature in the judicial and legal field. The first part of the Amendment deals with the position where a decree is pronounced in terms of Minutes of Tender and Acceptance, and I think it fair to explain to your Lordships exactly how that arises. If a pursuer raises his action for damages and it is defended, the defender may at any time during the currency of the case lodge a tender offering to pay a certain sum of money in full of the conclusions of the summons against him; and if the pursuer accepts a tender by a Minute of Acceptance the court is then invited to grant a decree in terms of these Minutes of Tender and Acceptance. In that situation no evidence will have been led and so there will be no evidence on damages.

It could therefore be argued in that situation that this was a special reason why no interest should be awarded on any part of the sum. If that view were taken by the court it might result in two disadvantages to a pursuer. In the first place, he might be in a worse position than a pursuer in like circumstances who went on to have his claim adjudicated either by jury trial or by proof, although the former pursuer, by accepting the tender, 'was saving the expense of a proof or jury trial. Secondly, such a pursuer might be induced not to accept the tender which he might otherwise have accepted because the amount of interest involved, if the matter went to inquiry, might well in certain cases be substantial. In that situation, by refusing the tender in order not to lose the chances of getting interest, he might be incurring the risk of being found liable in expenses if, at the end of the day, the sum awarded did not exceed the tender.

As a tender is a lump sum and does not differentiate the various elements of damages, it might be difficult, I appreciate, for a judge to award appropriate interest on the appropriate elements of damages, but there might be agreed facts or other circumstances which would enable him to do so by wielding a broad axe. I would only mention, in passing, that the explanation given on Second Reading by the noble Baroness, Lady Tweedsmuir of Belhelvie, that the judge will have some guidance from the pleadings, is one that would not apply in many cases. May I briefly explain why?

In many cases, particularly where the injuries are serious, the pursuer in his averments sets out the injuries he has sustained, their duration, the amount of wages he has lost in the past as a result of the accident injuries and the loss he is liable to sustain in the future, either by loss of wages or by loss of wage-earning capacity. The defender, on the other hand, in his pleadings, may often deny the extent of the pursuer's injuries, aver that he had fully recovered from them some considerable time before the action came to be heard and had no future loss at all. Therefore to that extent they are often poles apart, and the pleadings can give no guidance.

It may be said that the other provisions in this Bill would enable a judge, in these circumstances to grant decree on Minutes of Tender and Acceptance, by exercising a discriminatory selection when the circumstances entitled him so to do. What I fear is that it might be decided, as a matter of general principle, that the circumstances attending a decree following upon Minutes of Tender and Acceptance would constitute a "special reason" within the meaning of subsection (1)(a) to avoid awarding interest on damages so granted. It is to avoid that possibility that I am moving this Amendment. I beg to move.

Perhaps I should point out that what I have said refers only to the first part of the Amendment. It may be that I should have dealt at the same time with the second part, since it is all comprehended in the one formal Amendment. May I seek the guidance of the Committee on this matter?


The noble Lord is moving one Amendment. He is entitled to speak to both parts at the same time.


In that situation, perhaps, with your Lordships' indulgence, I may very briefly mention the second part, which is to insert: In section 2 of the said Act of 1958 there shall be inserted at the end 'having regard to the provisions of the Interest on Damages (Scotland) Acts 1958 and 1971'. This deals, of course, with an entirely different point. It is a small point, and it relates to a very uncommon type of action nowadays, namely, a jury trial in the sheriff court, and to the even rarer occurrence of an appeal in such an action to the Court of Session, Now the Interest on Damages (Scotland) Act 1958. by Section 2, makes provision for the Court of Session, on such an appeal, when it relates to the failure of the court below to award interest, or when the interest awarded is said to be inadequate or excessive, to make such order as to interest as to the Court of Session seems just. This is a wide discretionary power, and the question is whether it would be automatically attached to and qualified by the provisions of this Bill. If not, then two different standards would apply, one generally to all other actions of damages and another to this very specialised form. It is to remove any doubt about this that the second part of the Amendment is tabled. I beg to move.

4.3 p.m.


As explained by the noble Baroness on Second Reading, when the court pronounces an interlocutor following Minutes of Tender and Acceptance the pursuer may move for 'interest since the interlocutor is one decerning for payment of money as damages, and is therefore covered by the present Bill. The purpose of this Amendment is to make express provision for such cases, and to ensure that the court will not in such circumstances decline to award interest on the ground that the absence of information on which to base a calculation of interest constitutes a special reason for withholding such an award. I am not fully convinced of the necessity for such express provision, but having some recollection of how the Bruce came to be crowned on the Stone of Destiny I have some sympathy with those who want to "mak siccar" and I am prepared to discuss the matter further with the Minister.


In view of that undertaking and what might follow thereon, I am prepared to withdraw this part of the Amendment. But the noble Lord has not dealt with the second part, and I am in rather a difficulty.


I fell into the same trap as the noble and learned Lord. With regard to the second part of the Amendment, this is designed to ensure, as the noble and learned Lord has stated, that on an appeal from the sheriff court on the grounds that no interest has been awarded, or that the amount of interest is either too little or too much, the Court of Session shall take into consideration the provisons of this Bill in determining what order should be made. I am happy to include this matter also in my undertaking to consider further before the Report stage, subject of course to the approval of my noble friend.


In these circumstances, I withdraw both parts of the Amendment.

Amendment, by leave, withdrawn.

LORD WHEATLEYmoved Amendment No.4: Page 2, line 5, leave out (""damages" includes solatium, and")

The noble and learned Lord said: I come, I am sure to your Lordships' ultimate relief, to the last of the Amendments that I propose to move. As I understand it, the provision in the clause, "'damages' includes solatium", is to draw the court's attention to the fact that solatium has to be considered in dealing with interest on damages for personal injuries. But solatium is and always has been an element, and a constituent element, of damages in such cases, and with respect I do not think that even Parliament requires to tell the judges or the profession this. Not only is this definition tautological, but it could possibly be mischievous. As it reads at present, the clause says, In this Act, 'damages' includes solatium…

May that not give rise to an argument that, outside this Bill, when it becomes an Act, it does not, contrary to the accepted practice throughout the years? So why invite trouble if it is tautological? I suggest that that trouble ought to be avoided by removing this definition from the Bill. I accordingly beg to move.


Our purpose in including the passage which the noble and learned Lord wishes to delete was to "mak siccar" about what precisely is included in the term "damages". I would assure the noble and learned Lord that I have no desire to be "mischievous" on any aspect of the Bill whatsoever, and I am quite certain that nothing could be further from the mind of my noble friend who sits on the Front Bench. This aim may well be affected by the other Amendments of the noble and learned Lord, and I suggest that we might include reconsideration of it along with the other points which he has made to-day. May I, as a Parthian shot, just say to him something that Cicero said a very long time ago? It is that nothing is harder to find than perfection".


As this is the last Amendment, perhaps this is a suitable moment for me to say to the noble and learned Lord, Lord Wheatley, that I shall certainly be very glad to consider these Amendments with my noble friend Lord Balerno. They have of course been on the Order Paper and printed since the 14th, but I think it true to say that the noble and learned Lord did not have the opportunity to discuss them with the Lord Advocate until this week. Also Amendments on the Marshalled List do not always appear to be quite the same when they are moved, because it is the thinking behind the Amendment which is so important and which one should understand and hear at first hand. As I said earlier, the first Amendment, and the next two, which had the purpose of trying to remove doubt and to make things perhaps a little more restrictive, are in fact the opposite of the last Amendment, which seeks to remove something which we felt made it all doubly clear. However, we shall certainly examine these matters. I must confess that we are not entirely convinced, but in view of the noble and learned Lord's very great personal interest, and of the fact, as I think he will realise, that this is a very difficult subject, we should like to look at this again to see whether it is necessary or indeed possible to amend the Bill.


Then may I take the opportunity of thanking the noble Baroness and also the noble Lord, Lord Balerno, for the patience and understanding they have exercised in listening to these Amendments and also the Committee. I should like to assure the noble Lord that I was not suggesting that those responsible for this Bill were being "mischievous", as they say in the part of Scotland where I was brought up. What I meant was that it might result in a mischief which is not appreciated. So far as the second Amendment is concerned, this idea of "making siccar" is all right but you must draw the line somewhere. It is like putting into a Bill that "issue" includes "son". This is, in effect, being done in this definition. In view of the various undertakings that have been given, particularly in relation to the Amendment under discussion, I ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clasue 1 agreed to.

Remaining clause agreed to.

House resumed: Bill reported without amendment.