Compensation Awards

How do courts calculate a compensation award?

The amount of money given to someone in a compensation award will vary according to a number of criteria. The first obvious point to state is that compensation awards paid as a result of criminal actions are worked out on a strict tariff and paid by the state. The award will be paid by the Criminal Injury Compensation Authority and will not vary according to circumstance. Compensation awards paid out as a result of civil actions will be much more flexible and will take into account the injured individual’s personal circumstances.

Once the court has decided liability then the question of quantum (quantifying a claim for damages) becomes relevant. The court uses a variety of means of working out how much money to award. Firstly they use Judicial Studies Board Guidelines, which are special tables used by courts across the United Kingdom. They will also look at previously decided cases and see how closely they resemble this case. If the award is a large one then expert witnesses will be called. For example in a head injury case that may be worth $3million then doctors will have to assess the full extent of the injury/recovery time, along with such things as past and future loss of earnings, past and future care and assistance and adaptations to the injured party’s house.

Once the compensation award is decided it is paid in two parts. The first part of a compensation award is for loss/suffering and loss of amenity and deals with the injury/event itself. The second part is for special damages (i.e. financial loss) arising directly from the injury, for example loss of earnings. In addition to the compensation award the winning party will be entitled to their reasonable legal costs. Some compensation awards can be extremely complex; for example several local authorities have been found liable for cases of abuse in care homes that occurred twenty years ago. Calculating the compensation awards in such cases is extremely difficult.

Small compensation awards for under $1000 will be dealt with in the Small Claims Court. Those seeking awards of under $50,000 will have their cases heard in Local Courts whilst any damages above this will be decided in the High Courts. The judges assessing the level of compensation awarded will do so after having heard the evidence from all the parties involved and will take into account all relevant circumstances. This can result in a large difference in awards; a professional footballer whose leg was broken may well receive substantially more than an old man with the same injury.