Even if you prove duty, breach, and causation, the claimant can only recover damage that is not too remote. This topic covers what counts as recoverable damage, how personal injury and fatal claims are assessed, when psychiatric harm is compensable, and how damages are calculated. It is one of the most practically important areas of tort law.
Remoteness questions often combine with causation. Make sure you can distinguish the two: causation asks "did the defendant's act cause the harm?" while remoteness asks "is it fair to hold the defendant liable for this type of harm?" The Wagon Mound test is the key tool for remoteness.
A defendant is only liable for damage of a type that was reasonably foreseeable at the time of their negligent act. If the type of damage was not foreseeable, it is too remote and cannot be recovered, regardless of how closely it was actually caused by the defendant's act.
The defendant's ship leaked furnace oil into Sydney Harbour. The oil accumulated around the claimant's wharf. Some cotton waste fell into the water and was set alight by a spark from welding work, causing a fire that destroyed the wharf. The Privy Council held that the defendant was not liable for the fire damage because oil on water was not, at that time, known to be capable of catching fire. Only oil pollution damage was foreseeable, so only that was recoverable. The old "direct consequence" test from Re Polemis was overruled.
This was a later case involving the same facts, but with more evidence about the risk of fire. The Privy Council held that once the type of damage is foreseeable, the defendant is liable for the full extent of that damage, even if the actual damage turns out to be more severe than expected. So if fire was foreseeable as a type of damage, the defendant is liable for the entire fire loss, even if the wharf burned more fiercely than anyone predicted.
The defendants left a manhole covered by a tent and surrounded by paraffin lamps. A child climbed in and was burned when one of the lamps fell. The House of Lords held that personal injury from falling into the hole was foreseeable, even though burn injuries from a lamp were not specifically foreseeable. The damage was foreseeable in a general sense, and that was sufficient. You do not need to predict the exact mechanism of injury.
| Case | Facts | Holding |
|---|---|---|
| The Wagon Mound (No 1) [1961] | Oil leaked from ship; wharf destroyed by fire from oil on water | Fire damage not foreseeable; only pollution damage recoverable. Overruled Re Polemis. |
| The Wagon Mound (No 2) [1967] | Same facts with evidence fire was foreseeable | Once type is foreseeable, full extent recoverable regardless of severity. |
| Hughes v Lord Advocate [1963] | Child fell into unattended manhole and was burned by lamp | Damage foreseeable in general sense; exact mechanism need not be foreseen. |
| Jolley v Sutton LBC [2000] | Boy injured trying to dismantle abandoned boat | Injury to children playing on boat was foreseeable; defendant liable. |
In an exam answer, work through it in two steps. First, ask: was this type of damage reasonably foreseeable? Second, if yes, is there any reason the damage is still too remote? Usually, if the type is foreseeable, the claim succeeds. The eggshell skull rule (from Topic 3) also interacts here — you take the claimant as you find them, even if their injuries are unusually severe.
Causation and remoteness are separate hurdles. The "but for" test asks whether the defendant's act caused the harm. Remoteness asks whether it is fair to hold the defendant liable for that type of harm. You can pass the causation test but fail on remoteness (as in Wagon Mound No 1).
The aim of damages in tort is to compensate the claimant, not to punish the defendant. You are putting the claimant back in the position they would have been in had the tort not occurred, as far as money can do that. This is the compensatory principle. Exemplary (punitive) damages are only available in very limited circumstances.
Non-pecuniary losses compensate for things that cannot be measured in money: the physical pain, emotional distress, and reduced quality of life caused by the injury. In practice, these are grouped together as "pain, suffering and loss of amenity" (PSLA). Loss of amenity covers the reduction in the claimant's ability to enjoy life — for example, no longer being able to play sport or pursue hobbies.
For the SQE1, you do not need to memorise specific PSLA figures, but you should know that courts use the Judicial College Guidelines as a reference. These set out bracket figures for different types of injury (e.g., paralysis, amputation, fractures) and help ensure consistency across cases.
Pecuniary losses are the financial consequences of the injury. These include past losses (like lost earnings and medical expenses already incurred) and future losses (like loss of earning capacity and the cost of future care). The claimant must prove these losses on the balance of probabilities.
Future financial losses are calculated using the Ogden Tables (officially called the Actuarial Tables for the Calculation of Damages). These tables help you work out the present value of a stream of future payments. The key idea is that a lump sum received today is worth more than the same amount spread over many years, because of inflation and investment returns.
The discount rate is used to reduce future losses to their present value. It reflects the return the claimant could expect from investing a lump sum award. The rate is set by the Lord Chancellor under the Damages Act 1996. In 2017 it was reduced from 2.5% to -0.75%, significantly increasing lump sum awards (because money invested at a negative real return does not grow). The multiplicand is the annual loss figure that you multiply by the Ogden Tables multiplier to arrive at the lump sum.
A change of just 0.5% in the discount rate can alter a lump sum award by tens of thousands of pounds. The 2017 reduction from 2.5% to -0.75% had a massive impact on the insurance industry and NHS litigation budgets. In 2019 the rate was raised slightly to -0.25%. Always check the current rate — it is reviewed periodically.
This case provides a formula for calculating damages for future loss of earnings where the claimant's disability reduces their employability. The court takes the annual loss, multiplies it by the Ogden Tables multiplier, and then applies a further discount (the Smith v Manchester discount) to reflect the additional uncertainty of finding work with a disability. This approach is still used as a starting point, though the discount rate change has affected the calculations significantly.
Under the Damages Act 1996 (as amended by the Courts Act 2003), courts can order damages to be paid periodically (usually annually) instead of as a single lump sum. This avoids the risk that the claimant outlives their lump sum or makes poor investment decisions. Periodical payments are index-linked and tied to appropriate inflation measures, so they maintain their real value over time.
Periodical payments are most suitable for claimants with severe, long-term injuries where future care costs are substantial and uncertain. For smaller claims or where the claimant prefers financial flexibility, a lump sum may still be more appropriate. In practice, many serious personal injury settlements now combine both — a lump sum for immediate needs and periodical payments for ongoing care.
When a person dies as a result of someone else's negligence, there are two distinct legal routes for claiming compensation. The Fatal Accidents Act 1976 allows certain dependants to claim for their own financial losses arising from the death. The Law Reform (Miscellaneous Provisions) Act 1934 allows the deceased's estate to claim for losses the deceased suffered before death. Both can run in parallel.
Under s.1 of the FAA 1976, certain categories of people defined as "dependants" can bring a claim. These include the deceased's spouse or civil partner, children (including adopted children), parents, and cohabitants who lived with the deceased for at least two years. Each category of dependant must show they were, in fact, financially dependent on the deceased.
| Category | Requirements | Notes |
|---|---|---|
| Spouse or civil partner | Married or in a civil partnership at date of death | No need to prove financial dependency. |
| Former spouse or civil partner | Not remarried or formed new civil partnership | Must prove dependency. |
| Child of the deceased | Child, including illegitimate and adopted | Must prove dependency if over 18. |
| Parent of the deceased | Including adoptive parents | Must prove dependency. |
| Cohabitant | Lived with deceased as husband/wife for at least 2 years | Must prove dependency. |
| Other relatives | Brother, sister, aunt, uncle, etc. | Must prove dependency and that they lived with the deceased. |
Dependants can recover loss of dependency (the financial support the deceased would have provided), funeral expenses, and a bereavement award. The bereavement award is a fixed statutory sum — it is not assessed based on the relationship's emotional depth. It was increased to £15,120 in 2020. Only certain categories of dependant are entitled to the bereavement award: the spouse or civil partner, or the parents of an unmarried minor child.
Loss of dependency is calculated by working out what the deceased would have provided to the dependant financially, had they not died. You take the deceased's net income, deduct what they would have spent on themselves, and the remainder is the dependency. This is then multiplied using the Ogden Tables to produce a lump sum. The calculation can become complex where the deceased was self-employed, had variable income, or would have changed career.
The bereavement award is limited to a narrow group. Cohabitants, children over 18, and parents of adult children cannot claim it, even if they were deeply emotionally dependent on the deceased. This has been criticised as discriminatory, and the Law Commission has recommended reform, but the law currently remains as it is.
Under s.2(1) of the Law Reform (Miscellaneous Provisions) Act 1934, the deceased's estate can claim damages for losses the deceased suffered between the negligent act and death. This includes pain and suffering the deceased experienced before dying, loss of earnings between injury and death, and medical expenses incurred before death. The claim is brought by the personal representative (executor or administrator) for the benefit of the estate.
In an SQE1 question about a fatal accident, always address both routes. Identify who the dependants are, check whether they qualify under the FAA 1976, and then consider what the estate can claim under the LR(MP)A 1934. The most common pitfall is forgetting that the estate can recover the deceased's pre-death losses separately from the dependants' loss of dependency.
Courts are cautious about allowing claims for psychiatric harm because the potential for fraud is high, the harm is difficult to verify, and allowing unlimited claims could flood the courts. As a result, the law draws a sharp distinction between primary victims (who were directly involved) and secondary victims (who witnessed events affecting others). The rules are strict and claimants frequently fail.
A primary victim is someone who was directly involved in the incident and was within the zone of physical danger. They can recover for psychiatric harm without needing to satisfy the Alcock control mechanisms. The key question is whether the claimant was actually or potentially at risk of physical injury.
The claimant was driving a horse and cart when the defendant negligently crashed into it. The claimant was physically unhurt but suffered psychiatric harm from the shock. The court held she was a primary victim because she was within the zone of physical danger — she could have been physically injured in the collision. Her psychiatric harm was therefore recoverable.
The defendant negligently drove into the claimant's car. The claimant suffered a minor physical injury but went on to develop a serious psychiatric illness (chronic fatigue syndrome). The House of Lords held that once a duty of care was established for physical injury, that same duty covered psychiatric harm, even if the psychiatric harm was unforeseeable. This is a significant case — it means primary victims do not need to show that psychiatric harm was a foreseeable consequence.
Secondary victims are people who were not themselves in danger but suffered psychiatric harm from witnessing injury or danger to someone else. To recover, they must satisfy all four control mechanisms set out in Alcock v Chief Constable of South Yorkshire [1992]. If they fail any one of these, their claim fails.
This case arose from the Hillsborough disaster. Relatives watching the events unfold on television at the stadium or at home claimed for psychiatric harm. The House of Lords held that most of the claims failed because the claimants had not witnessed the event or its immediate aftermath with their own unaided senses. Those watching on a screen at the ground failed because the screen was not a direct perception of the event. This case established the four control mechanisms and showed how strictly they are applied.
All four criteria must be satisfied. If a mother hears about her child's accident on the phone and rushes to the hospital hours later, she fails on proximity in time and space (she was not at the scene) and witnessing (she did not see the event or immediate aftermath). Even though the close tie of love and affection is obvious, the claim fails. The courts apply these rules strictly.
A different set of principles applies where psychiatric harm results from a gradual build-up of stress at work rather than a single shocking event. The leading cases establish that employers owe a duty to take reasonable steps to prevent foreseeable psychiatric harm to employees from workplace stress.
The Court of Appeal set out a practical framework for stress at work claims. The key questions are: (1) Has the employer taken reasonable steps to address the risk of stress-related illness? (2) Was the harm foreseeable — were there indicators that the employee was at risk (like absences, complaints, or known vulnerabilities)? (3) Would a reasonable employer have done more? An employer is generally entitled to assume the employee can cope with the normal pressures of the job unless they know otherwise.
A teacher suffered a mental breakdown after a period of heavy workload. The House of Lords upheld the claim, finding that the employer knew or should have known the teacher was struggling and failed to take reasonable steps. This case confirmed that employers cannot simply ignore signs of stress. They do not need to guarantee a stress-free workplace, but they must act reasonably when they become aware of a problem.
In an exam question, check whether the psychiatric harm arose from a single event (use the primary/secondary victim framework) or from gradual workplace stress (use the Sutherland v Hatton framework). The two regimes are completely different and examiners will expect you to identify the right one.
| Case | Category | Principle |
|---|---|---|
| McFarlane v Coupland [1940] | Primary victim | Claimant within zone of physical danger can recover for psychiatric harm. |
| Page v Smith [1996] | Primary victim | Duty for physical injury covers psychiatric harm even if unforeseeable. |
| Alcock v Chief Constable of South Yorkshire [1992] | Secondary victim | Four cumulative control mechanisms established for secondary victims. |
| Sutherland v Hatton [2002] | Workplace stress | Employer must take reasonable steps to prevent foreseeable psychiatric harm. |
| Barber v Somerset CC [2004] | Workplace stress | Employer liable where they failed to act on signs of employee stress. |
Special damages are losses that can be precisely quantified in money. They are past losses that the claimant has already incurred by the date of trial. Because they are specific and quantifiable, the claimant must prove them with evidence — receipts, invoices, payslips, and medical records. If you cannot prove the exact figure, you cannot recover it.
General damages compensate for losses that cannot be precisely calculated. They include non-pecuniary losses like PSLA and future pecuniary losses like loss of future earning capacity. Because they involve prediction and estimation, the court assesses them based on the evidence available, using the Judicial College Guidelines and the Ogden Tables as tools.
| Feature | Special Damages | General Damages |
|---|---|---|
| Timing | Past losses (incurred before trial) | Future losses and non-pecuniary losses |
| Quantification | Precisely calculable | Not precisely calculable — estimated |
| Evidence | Must be proved with documents | Assessed by the court based on evidence |
| Examples | Past lost earnings, medical bills, travel costs | PSLA, future loss of earnings, future care costs |
| Pleading | Must be specifically pleaded and itemised | Can be claimed generally, though particulars may be needed |
A claimant who needs money urgently can apply for an interim payment before the case is fully resolved. Under CPR 25.7, the court will order an interim payment if the defendant has admitted liability, or if the claimant has a strong case and the court is satisfied the claimant would obtain judgment for a substantial amount at trial. The payment cannot exceed a reasonable proportion of the likely final award.
Interim payments are most useful where the claimant needs immediate funds for medical treatment, rehabilitation, or accommodation adaptations. They are also common in serious injury cases where the trial may be years away. The court has broad discretion, but the claimant must show a genuine need and a strong prospect of success.
The court can award interest on both special and general damages under the Senior Courts Act 1981 s.35A. For special damages, interest runs from the date the loss was incurred (so the claimant is compensated for being kept out of their money). For general damages, interest runs from the date the proceedings were issued. The rate of interest is set by the court, typically at a rate specified in practice directions.
In a long-running case with significant special damages, the interest alone can add a large amount to the total award. For example, if a claimant lost earnings for five years before trial, interest on those past lost earnings can significantly increase the overall recovery. Always factor interest into your calculations when advising clients on potential recovery.
In an SQE1 damages question, work through it systematically: (1) identify the recoverable heads of damage (PSLA, past losses, future losses), (2) classify each as special or general, (3) apply the remoteness test — is each head of damage a foreseeable type?, (4) consider any reductions for contributory negligence, (5) factor in interest. A structured approach ensures you do not miss any heads of damage.