Deduction from Interest

Griffiths and Others v British Coal Corporation and Another (CA TLR 13 March)

By s8 of, and Schedule 2 to, the Social Security (Recovery of Benefits) Act 1997, payments by the tortfeasor to the Secretary of State in respect of various specified benefits paid to the claimant, including incapacity benefit, sickness benefit and statutory sick pay, are to be deducted from the compensation for earnings lost during the relevant period due to the claimant. Where the benefit repaid exceeded the total of damages payable in respect of a head of compensation could that excess of benefit be deducted from the interest payable in respect of the past loss represented by that same head of compensation? A second question was whether or not damages for services in the nature of care and domestic assistance gratuitously rendered, fall within the term ‘compensation for cost of care incurred during the relevant period’ in Schedule 2, so as to allow the tortfeasor to set off the benefits he had paid against that compensation? In upholding the decision of the trial judge at the conclusion of eight lead actions to determine the liability of the British Coal Corporation for their employees’ contraction of obstructive airways disease due to the inhalation of mine dust, the Court of Appeal held that an award of interest on damages for past loss of earnings fell within the expression ‘compensation for earnings lost’. It was therefore subject to reduction on account of payments by the tortfeasor to the Secretary of State for Social Security to reimburse benefits paid to the claimant as a result of the tortfeasor’s wrong. Furthermore, services in the nature of care and domestic assistance, gratuitously rendered fell within the term ‘compensation for costs of care incurred during the relevant period’ and therefore could also be deducted. Any other interpretation would result in double recovery from the same source.