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Headnote |
Summary of decision:
The Board had correctly calculated the applicant’s loss of pension by deducting the full amount of his net ill-health pension from his net retirement pension during the period after his normal retirement date. The Board was therefore correct in its decision that the applicant’s loss in this case was below the minimum level of £1,000
Facts:
On 21 May 1992 the applicant, C, was assaulted in the course of his duty as a police officer. The injuries which he sustained were such that on 1 June 1993 he had to retire on medical grounds from the police force. In the normal course of events he would not have retired until 16 April 1996. On taking early retirement he became entitled to an ill-health pension under the Police Pensions Regulations. He commuted part of that pension into a lump sum. The remainder took the form of a continuing annual pension, which was taxable. C lost his rights to the normal retirement pension due to his receipt of the ill-health pension. C had received £13,700 per annum by way of ill-health pension since his retirement date. If he had continued in service to his normal retirement age he would have received a retirement pension of £15,200 per annum. C applied for compensation to the Criminal Injuries Compensation Board (‘the Board’). Paragraph 5 of the Criminal Injuries Compensation Scheme 1990 (‘the 1990 Scheme’) provided that compensation would not be payable unless the Board were satisfied that the injury was one for which the total amount of compensation payable after deduction of social security benefits, but before any other deductions under the Scheme, would not be less than the relevant minimum amount, namely £1,000. The single member of the Board refused C’s application on the ground that the sum which would be awarded was below £1,000. A majority of a five member Board confirmed the view of the single member on the basis that the policy followed by the Board, of deducting half of any ill-health pension up to the date of occupational retirement and thereafter deducting the net amount of pension in full from the net amount of pension otherwise payable, was correct. The Lord Ordinary refused C's application for judicial review of the Board’s decision. The Inner House, First Division (Scotland) allowed C's application and remitted C’s application to the Board for reconsideration. The Board appealed.
Held, allowing the Board’s appeal:
(1) The object of the 1990 Scheme was to put qualifying victims of crimes of violence in the same position financially as they would have been in had they not been injured but not to make them better off.
(2) The effect of section 10 of the Administration of Justice Act 1982, as amended by the Jobseekers Act 1995 and the Employment Rights Act 1996 was to make it clear that the decision in Parry v Cleaver applied also in Scotland. The correct approach was to apply the prohibition or the direction in section 10, as the case may be, only in so far as the nature of the payment or benefit that was in issue was relevant to an assessment of the head of damages claimed. The first step was thus to identify the nature of the loss claimed and then to calculate the amount of that loss. Only when this had been done did the question arise as to whether or not the listed receipts should be taken into account so as to reduce that amount.
(3) The periods before and after normal retirement age were required to be considered separately. Prior to the retirement age the claim was for loss of earnings and pension benefits received during that period should not be set off against the claim for loss of earnings. Like was to be compared with like. After the retirement date the claim was for loss of pension. In order to compare like with like, pension benefits received and to be received after that date must be brought into account. The exclusion in section 10(a) did not therefore apply.
(4) The law of Scotland required the calculation of C’s claim for the loss of his retirement pension to take his ill-health pension into account. This conclusion was inevitable in the present case, as the two pensions were both products of the same pension scheme. The correct view of the facts showed that C’s claim was simply one for diminution in the amount of the pension to which he was entitled under the pension scheme. The amount by which his pension has diminished could not be calculated without setting the amount of the ill-health pension against the amount of the retirement pension.
(6) Paragraph 20 of the 1990 Scheme departed from the common law, because it stated that where the victim is alive compensation would be reduced to take account of any pension accruing as a result of the injury and where the pension was taxable, as it was in the present case, one-half of its value was to be deducted. In the absence of clear language to the contrary, however, paragraph 20 of the Scheme must be read as having no application to the question of how a claim for loss of pension after the normal retirement date was to be calculated. It assumed that the necessary arithmetic had already been done to calculate the loss.
Parts of scheme and other legislation referred to in the speeches:
Criminal Injuries Compensation Scheme 1990, paragraphs 5, 12, 20
Administration of Justice Act 1982 section 10, as amended by Jobseekers Act 1995 and Employment Rights Act 1996
Police Pensions Regulations 1987 (SI 1987/257) as amended by SI 1990/805 and SI 1996/867
Cases referred to in the speeches:
Parry v Cleaver [1970] AC 1
Leebody v Liddle (2000) SCCR 495
Livingstone v Rawyards Coal Co (1880) 7 R (HL) 1
Longden v British Coal Corporation [1998] AC 653
Paff v Speed (1961) 105 CLR 549
Auty v National Coal Board [1985] 1 WLR 784
Wilson v National Coal Board [1981] SC (HL) 9
Mitchell v Glenrothes Development Corporation, 1991 SLT 284
Davidson v Upper Clyde Shipbuilders, 1990 SLT 329
Representation:
Colin M Campbell QC and Laura Dunlop instructed by the Solicitor for the Scottish Executive for C.
John L Mitchell QC and Roddy Dunlop instructed by Balfour & Manson for the Board.
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