(a) The compensatory principle
Tort damages are compensatory, not punitive (save in the narrow categories recognised in Rookes v Barnard). The touchstone is restitutio in integrum: the claimant should be restored, so far as money can do it, to the position she would have enjoyed had the tort not occurred (Livingstone v Rawyards Coal Co). This distinguishes tort from contract, where damages aim at the expectation measure (the position the claimant would have enjoyed had the contract been performed). In tort, the counterfactual is the status quo ante, not a promised future.
Damages are awarded once and for all, as a lump sum. Provisional damages (s 32A Senior Courts Act 1981) and periodical payment orders (s 2 Damages Act 1996, inserted by Courts Act 2003 s 100) are exceptions, available where there is a risk of future serious deterioration or where future care needs are uncertain.
(b) Pecuniary loss: general and special damages
General damages are those which the law presumes to flow from the tort: future loss of earnings, loss of earning capacity, pain and suffering, loss of amenity. Special damages are quantified losses proved at trial: past medical expenses, past loss of earnings, cost of past care, vehicle repair.
(i) Pre-trial pecuniary loss
Past loss of earnings, net of tax and national insurance but gross of benefits (by virtue of the recoupment regime in the Social Security (Recovery of Benefits) Act 1997), is straightforward in principle. Deductions for avoided living expenses are rare (cf. Saunders v Edwards [1987] 1 WLR 1116 where dishonesty barred a claim).
Past care provided by family or friends is recoverable even if provided gratuitously, provided the carer has given up time and the need is referable to the tort: Donnelly v Joyce [1974] QB 454; Giambrone v JMC Holidays Ltd (t/a Sunworld Holidays) [2002] EWHC 2932 (QB). The rationale is that the claimant has a need, met by another; the claimant holds the award on trust for the carer (Hunt v Severs [1994] 2 AC 350, though Hunt was doubted in Conner v Surrey County Council [2010] EWCA Civ 286 on the trust point).
(ii) Future pecuniary loss: the multiplier/multiplicand method
Future loss of earnings is calculated by (i) identifying the net annual loss (the multiplicand) and (ii) multiplying by a figure (the multiplier) representing the present capitalised value of future payments. The multiplier is derived from the Ogden Tables, which contain actuarial discount factors reflecting mortality, the discount rate, and contingencies other than mortality (e.g. risk of unemployment).
The discount rate, set by the Lord Chancellor under s 1 Damages Act 1996, was 2.5% from 2001 to 2017, −0.75% in March 2017, −0.25% in 2019, and +0.5% from 11 January 2025. A low or negative rate increases the multiplier, raising awards.
Contingencies other than mortality—ill-health, economic recession, job-specific risks—are factored in via percentage reductions (Ogden Tables A–D) or judicial adjustment. In Herring v Ministry of Defence [2004] 1 All ER 44 the Court of Appeal endorsed the structured use of the Ogden factors rather than ad hoc 'jury' discounts.
Loss of earning capacity, distinct from loss of earnings, arises where a claimant returns to work but faces a risk of future unemployment and reduced employability because of disability: Moeliker v A Reyrolle & Co Ltd [1977] 1 WLR 132; Smith v Manchester Corporation (1974) 17 KIR 1. The award is necessarily speculative—often called a 'Smith v Manchester award'—and may be modest (£20,000–£50,000) or, in young claimants with complete incapacity, merge into a full loss-of-earnings claim.
(iii) Cost of care and accommodation
Future care costs are recoverable if reasonable and caused by the tort. Private care is not a 'failure to mitigate' even where NHS care is available: the claimant is entitled to choose (Sowden v Lodge [2004] EWCA Civ 1370). Commercial care at professional rates is recoverable; family care is valued at the commercial cost of a replacement carer (or, more rarely, the carer's lost earnings): Lowe v Guise [2002] EWCA Civ 197.
Accommodation: where a catastrophically injured claimant needs adapted housing, the capital cost is recoverable offset by the capital value of the existing home (Roberts v Johnstone [1989] QB 878, though doubted in Swift v Carpenter [2020] EWCA Civ 1295, which preferred full capital recovery less a rental equivalent). Case management costs and deputy costs are also recoverable: Sowden.
(c) Non-pecuniary loss
Pain, suffering, and loss of amenity (PSLA) are assessed by reference to the Judicial College Guidelines (15th ed., 2019; 16th ed., 2021), which tabulate bracket awards for categories of injury (e.g. £3,000–£10,500 for moderate neck injuries; £290,000–£390,000 for quadriplegia). The brackets reflect Court of Appeal decisions, updated biennially for inflation (since 2013, by indexation).
Loss of amenity is assessed objectively—the claimant need not be conscious of the loss: H West & Son Ltd v Shephard [1964] AC 326; Lim Poh Choo v Camden & Islington Area Health Authority [1980] AC 174. This principle has been criticised (particularly by Lord Scarman dissenting in Lim) but remains law.
Bereavement damages, a fixed statutory sum (currently £15,120: Fatal Accidents Act 1976 s 1A, as amended by SI 2020/316), are payable only to spouses, civil partners, and parents (of unmarried minors). Siblings, cohabitants of under two years, and adult children have no claim—a matter of continuing criticism.
(d) Property damage
The ordinary measure is diminution in value or cost of repair, whichever is less. Where the chattel is destroyed, market value is awarded. The 'betterment' principle prevents a claimant profiting from new-for-old replacement, though in practice insurers settle on a replacement-cost basis.
Loss of use is recoverable if the claimant hires a substitute (hire costs are special damages) or, controversially, at a 'user' rate even without hiring: Giles v Thompson [1994] 1 AC 142 (hire of replacement car recoverable even where provided by a credit-hire company).
(e) Mitigation
The claimant must take reasonable steps to mitigate loss; failure bars recovery for the avoidable increment. Yet the burden of proving failure lies on the defendant, and the standard is lenient—the claimant is not required to undergo risky surgery (Steele v Robert George & Co [1942] AC 497) or to forgo private treatment (Sowden).
(f) Collateral benefits
Some benefits received post-tort are deducted (e.g. sick pay from the tortfeasor-employer); others are not (insurance proceeds, charitable gifts, most social security benefits, though the latter are recouped from the defendant by the state under the 1997 Act). The principled basis is elusive: the House of Lords in Hodgson v Trapp [1989] AC 807 acknowledged the law is pragmatic, not coherent. Deductibility turns on source, characterisation, and policy.
(g) Interest
The court awards interest under s 35A Senior Courts Act 1981: special damages at half the 'appropriate rate' (formerly 2%, now often lower) from date of loss to trial; general damages for PSLA at 2% from service of proceedings to trial; future losses attract no interest (they are already discounted).